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Becoming a European company: Part II

What we learned one year into hyper-localizing our BaaS platform for European expansion

Florent Tardivel
March 15, 2023

Ever heard the EU Commissioner’s favorite joke? It goes something like this:  

“Europe is a paradise where the English are the policemen, the French are the cooks, the Germans are mechanics, the Italians are lovers, and the Swiss are responsible for organizing it all. European hell, on the other hand, has the Germans policing, the English preparing dinner, the French serving as the mechanics, the Swiss making love, and an Italian organizing it all1”.  

While we believe that the French can absolutely handle machinery, there is a subtler subtextual message: the people of Europe are really different from one another.

Our European ambitions

A year ago, we announced our ambition to become a truly European company. At Swan, we are lucky enough to operate in the payments industry which has been considerably unified by a series of European policies over the past 25 years. Beginning with the establishment of the Euro, reinforced by the creation of SEPA standards, and even more consolidated by numerous EU regulations and directives.

Our thesis was that the European payments industry was already quite unified and that we would be able to expand rapidly and serve partners far and wide. Since then, we’ve onboarded partners from 11 countries — and their own customers span 18 countries overall! Throughout the process, we've had to face the truth: Europe is a collection of countries each with their own particularities. There are dozens of languages, each country has their own unique financial habits, and, while EU legislation has successfully created a shared regulatory framework, each nation has its own quirky laws that need to be understood to be fully compliant.

As Swan began expanding across Europe, we realized that to become a fully European payment infrastructure provider, we’d have to become local. Further, we understood that localization had to be part of our DNA and shouldn’t be handled as a side project or added superficially to each of our new product releases.

To better frame our approach, we identified 3 main pillars for localization: language, country-specific banking features, and an adaptable regulatory framework.

Now you’re speaking my language!

To deliver a five-star experience, it is essential that you speak the language of your customer. We started with the obvious: by translating our white-label web-banking and onboarding pages into seven different languages: French, Spanish, German, Italian, Portuguese, Dutch, and English.

On the human resources and support side, we already have folks who speak French, Spanish, German, and English, and can answer requests of local customers. But it’s not just language that is needed to collaborate effectively. There needs to be knowledge of local compliance processes and required documents. For example, our trained KYC analysts are trained to decipher country-specific laws. Without an orientation towards localization, and the ability to speak your customers’ language, you can not call yourself a European company.  

Increasing trust by localizing banking features

Bank accounts are the fundamental unit that allow clients to firstly store and then move money. Payments and cards, our other two main products, can only exist thanks to accounts.

Swan started by providing French IBANs - that is to say an IBAN starting with the country code "FR". As we expanded throughout Europe, we kept hearing from customers about how important local IBANs are for establishing trust with end customers. Thus, we decided to accelerate this "feature": we are already issuing German IBANs and will create our first Spanish IBANs before the summer. Dutch IBANs will soon follow from there. 

But why are local IBANs so important? The SEPA network doesn’t discriminate by country. Your account number can start with ES, FR, NL or DE, the payment will still be processed. Yet, there are a number of reasons why our partners need local accounts/IBANs.

Let’s take the example of CurryWurst GmBH, a producer of sausage based in Hamburg. Over 95% of their clients are also based in Germany and therefore would expect to send their money to a German bank account starting with DE. Simply put, the end user feels more secure paying for their blood(y) sausage this way!

Besides, CurryWurst GmBH has contracts with electricity and gas suppliers, who often refuse to debit anything other than a German account. The same goes in Spain for tax collection, which has to be done through a local account.

Local accounts are more than a comfort feature: they’re a must!

A flexible compliance regime 

Onboarding processes systematically need to be adapted by country. 

From the three different formats of Spanish ID cards we must recognize, to the preference Dutch customers have for using a driver’s license for ID verification, each market is a bit different.

The same goes for companies. Depending on local laws, firms may need to provide different documents relating to their incorporation that may, or not, be publicly available: Ultimate Beneficiary Owner (UBO) declarations are publicly available in most countries, but not in Portugal or the Netherlands, for instance!

We have had to refine our onboarding processes, for both individuals and companies, as we have progressively localized. But now, we have the knowledge and experience to confidently call ourselves European. 

Our footprint has expanded rapidly; and with that, many learnings!

It all starts with people

We did something last year that we are really proud of: over ⅓ of all new hires at Swan were non-French. Internationalizing our team has already helped us become a more diverse and inclusive company, more effective at serving our customers across different countries and languages. But, to truly be great, we need to try even harder to bring more ‘Europeanity’ into Swan. 

We will also open new offices: operating from the ground with local experts is the only way to capture all the specificities of each market. Besides our existing Paris and Berlin offices, we will soon launch our third location, in Barcelona. And we plan to open further local offices across Europe in the coming months and years.

If you are willing to be part of this truly European adventure, do check out our recruitment website or get in touch with one of our sales experts! We're hiring and open to do business in all our offices…

Just don't apply as a cook if you're British 😉 

[1] For those of you who might not appreciate this joke, or find it offensive as caricatural of each nation’s stereotype: it’s just a joke.

Florent Tardivel
March 15, 2023
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