Rewire focuses on helping migrant workers quickly, simply and safely move transfer their money across borders. We spoke with CEO and Co-Founder Guy Kashtan about how Rewire came to be, his passion for helping Rewire’s demographic, and what is coming in the future of fintech.
When was Rewire set up, and who was involved?
We founded Rewire in Israel in 2015. It was established by myself, together with Saar Yahlom, Or Benoz and Adi Ben Dayan. Personally I’ve always loved working on products that make a difference, that is important to
I was particularly excited when the opportunity came to build a company that is helping both a huge underserved population. And I was lucky enough to start this company with my friends.
Who exactly is your audience?
We are solving financial needs of international working migrants. Especially migrants coming from Asian and African backgrounds who are currently living in the European Union, who have moved there to make a better life for themselves and their families. So we are strictly focused on them. If you look at the profile of our customers, they have left their home countries and their families in order to provide and build a better future for them. If you compare the minimum wage in Germany which is €15,000 a year, it is about 20 times higher than the average salary in Nigeria. If they make minimum wage, they can pay for their life in Germany and send home part of their salary for their family. And it is a huge market — the market of financial services around migrants is estimated at about $1 trillion a year.
Can you share any roadblocks or challenges that you have experienced building Rewire?
Fintech is full of roadblocks. But roadblocks excite me — because once you are over that, the people behind you still need to face it and you are ahead! And after a while you get a skill of handling them and overcoming them successfully.
I think our biggest challenge is trust. It’s learning how to expedite making a group of customers trust you, particularly if they are not familiar with banking services. Getting customers to trust what is most important to them — and I’m not referring to money I am referring to their families — it is very difficult. Our services are used directly to help their families, they trust us with their family’s financial well being. Migrant workers who travel are not very trusting of new financial services, and that is why the world is still very cash based, and based on legacy clients like Western Union etc.
But on the flipside, once those customers do trust you, that trust travels within the community. More than 50% of our customers reach us, rather than us getting them. They hear about us, read about us, are referred to by their friends — that’s just organic growth without us having to pay for advertising.
We learnt that once you provide a very good service, seven days a week support, in their language, with community managers coming from their own communities, then customers start recommending you to their friends, and you become the new standard.
What are you most proud of at Rewire?
I would say that it is consistently providing great service to our customers. And changing their lives for the better. If you read how customers react to our campaigns and our messaging, you can see there is always someone who will complain — we are not protected from that! — but more than that you see how much love and trust our customers have in us. The returning rate of customers month over month shows a 98% retention of our customers. And when I look at this retention and the feedback we get, it makes me really proud to see how significant we are in the lives of our customers.
They say that financial services are not measured in point A to point B, but instead how fast you can handle a problem when there is one, and how you communicate with the customers. That problem solving is a huge part of the value we provide to customers, and we see it also when we ask them about a specific service and how we can improve. Some tell us exactly! But some say how amazing we are and how grateful they are, and it is really heartwarming. Especially when serving migrants. Serving companies is great, but you can’t be life changing for a company. You can for working migrants.
Looking outside of Rewire now, how do you see your industry developing in the coming years?
Generally, all the trends we see right now are all influenced by COVID-19.
The first is globalisation. There are over 270 million migrants worldwide, and the working migrant population is growing faster than the rest of the population. This group is growing significantly. COVID-19 might impact things for a short period of time, but it will lead to overcompensation later down the line. Migrants are the driving workforce of economies, especially in developed countries. In Germany for example, they cannot handle the population without a stream of incoming Filipino nurses, without workers from Thailand, without IT students from India. It may slow down during COVID-19, but it will increase to overcompensate as time goes by and the world begins to move again.
The second one is digitalisation. It may sound trivial in a world where everything is already becoming digitised, but for migrants this is taking longer than for other groups. They are coming from places with less digital technology, and they have less trust in it than other groups. This is happening now, but COVID-19 is really pushing and accelerating that forward.
Most of our customers were depositing cash until the coronavirus hit, and now we are more than 50% digital. The customers really shifted how they behave in relation to our services. These changes are here to stay, because it only accelerated a trend that was happening anyway. So even in a post coronavirus world, I expect everything will move digital in the financial industry. Customers don’t want to go and deposit cash to Western Union now, they are looking for the online solution.
The last one is a trend of change in regulation. So many of the developing countries like Nigeria, India, China, Ukraine, the Philippines, are changing regulations to make financial more accessible, and for digital services to be more available. These changes are enabling us to be able to offer more financial services to their migrant workers as it connects better to their home banking system.
Speaking of COVID-19 and the global pandemic, can you share anything you’ve been doing to help navigate these uncertain times?
It differs from company to company, but the first thing we did was to allow all employees to work from home. Which isn’t necessarily the most efficient solution for companies, but I was actually very surprised to see we are more efficient working from home than the office. For me it was about providing employees and customers the comfort and solution they need to be happy, healthy and effective. That has what driven most of our decisions.
When we look at our customers, many of them are front line workers, so their work is not necessarily diminishing, and their families back home need the money now more than before. We have changed how we have operated to support our customers, to provide them with additional support, and handhold them during the onboarding process.
We have also doubled our support team. We had a huge influx of customers coming in, and they needed more help than ever before. We made the changes we had to make in order to better support our customers, and we saw it as an opportunity to help more and more customers.
Will these changes stick within Rewire after COVID-19 has passed?
My approach to working from home has definitely changed. Before, I was pretty much against it. Now, I can see it can be very effective to work from home as long as employees are also managed from home. This is one change I am going to keep — we will still go back to working in the office but I will make a much more flexible working environment, working with the managers to understand individual preferences.
The other change is that move to digitisation I mentioned before — our customers who have moved to digital will stay with digital in my opinion.
And finally, what do you see as the future of fintech?
On the future of neobanks specifically — I think we will see the some interesting changes.
The first wave of neobanks were serving the general population, like N26, Monzo, Revolut. These neobanks are usually providing some aspects of service better than traditional banks, but in some aspects they are missing a significant business model, because they now have huge customer groups that they need to make profit off.
The second wave, which we are a part of, is companies that already have a large group of customers, but they are very market specific. They focus on a vertical. And now they are expanding to offer these same customers a specific banking service that they need.
The real change here is that the future will be multiple neo banks, solving vertical needs in a way that is not compatible with other solutions. Because if we provide full financial services to migrant workers, there is no need for them to go to a general financial services bank. As the market develops it will be more about vertical specific neobanks. And we are a part of that future.
Head to Rewire’s website for more information on what they offer.
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