How Digital Banking Helps Investors Manage Money Efficiently Tomas Navickas

Episode Overview

​Tomas Navickas is a distinguished IT and technology professional with over two decades of experience in developing and optimizing financial technology solutions. Throughout his career, Tomas has been instrumental in planning and constructing large-scale systems and infrastructures for major banks and financial institutions. His expertise encompasses software development, payments, and business strategy, positioning him as a pivotal figure in the digital transformation of the financial sector.

In 2019, Tomas co-founded myTU, a digital banking platform headquartered in Vilnius, Lithuania, where he serves as the Chief Technology Officer (CTO). Under his technical leadership, myTU has embraced cloud-only infrastructure and artificial intelligence, resulting in a highly efficient and secure banking platform. This innovative approach has enabled myTU to operate with remarkable efficiency, maintaining infrastructure costs of less than €1,000 per month while serving a diverse customer base.

Tomas’s vision for myTU focuses on creating accessible and fair banking services, particularly for underserved markets such as families, freelancers, and digital nomads. He emphasizes the importance of financial sustainability and operational efficiency, steering away from the cash-intensive strategies often seen in venture-backed fintechs. By leveraging AI and automation, Tomas aims to provide a customer-centric banking experience that empowers clients to achieve their financial goals, regardless of their background or location. ​

Episode Transcript

Tomas Navickas: Fintechs and any digital bank in general and payment institutions. They are great because they want clients, they are actively seeking clients, and they create easier and easier ways for you to gain access to those services. So, for example, what we do, we actually have application in different languages, like in most popular languages and not so popular languages too. And we allow to onboard.

Kevin Rosenquist: Hey there and welcome to Paypod where we bring you conversations with the trailblazers shaping the future of payments in fintech. My name is Kevin Rosenquist. Thank you for being here. As digital transformation reshapes industries, banking has emerged as a leading frontier of innovation. My guest today is Tomas Navickas, CTO and co-founder of myTU, a platform redefining digital banking with a focus on inclusivity, security, education and simplicity. Thomas and I explore how digital banking is evolving, and we discuss the importance of financial literacy in young people. We also tackle questions about the role of fintech in solving real world challenges like financial inclusion and fraud. myTU is a really cool platform and I’m excited for you to hear this episode, so please welcome Thomas Novickis. Thomas myTU has a pretty unique approach to banking, especially with digital banking. What inspired its creation and how does it align with your vision of the future of financial services?

Tomas Navickas: Hi Kevin, thanks for your question. Inspired. If I start from the Big Bang, probably I should say that I was always an engineer in the heart. Like, uh, even when I was a child, I was already coding something and then I was building systems and so on. So my personal aspiration was that this time I’m building something new, which is consumed by people, but also designed specifically for people, not just for the businesses, because my previous experience before my two was, uh, more about, uh, uh, payments, payment terminals, uh, acquiring, you know, payment cards in the shops and so on. So it builds things that were used by people, but they didn’t really interact with it that much. And,yeah, this is a huge difference because it focuses on quite different goals and, and different objectives and different targets. But that was just my personal. Yeah. So to reflect on the question that I have way more, uh, reasons why we are as we are. By the way, can you tell me what was your first experience with the bank? When did you actually acquire an account for yourself?

Kevin Rosenquist: Oh, boy, you’re gonna test me. All right, so I remember. Yeah, I remember getting a bank account. Probably in the junior high middle school area, probably in like a 12 or 13 years old. I started mowing lawns.

Tomas Navickas: That was very early, actually.

Kevin Rosenquist: Yeah, I started mowing lawns. So like, I mean, it was just a savings account, so everything had to go in a savings account. So those days, like the only way I could get money is I had to go to the bank and fill out a little slip to withdraw funds. And obviously they had to be there. So if I put money in there, they had to wait for it to clear before I could take it out and like so yeah, that would be my first experience, but it was only just a way to put put my money somewhere that I was making the little bit.

Tomas Navickas: Actually, you’re lucky I can consider you lucky. And you should consider yourself lucky because at least in Europe, that’s not what, uh, people have been experienced. This is not the same experience. And, uh, the landscape was changing for quite a while now already. Because with the newcomers, like icebreakers, you know, the big players, the big names, if I can mention them.

Kevin Rosenquist: Of course you can mention.

Tomas Navickas: Them like ten, 26 and then some others. So they kind of broken the ice with a digital banking when the bank was not something that you have next door when it’s like in a neighborhood, but it was somewhere far away, and you actually never met the people that were working there. And you did everything through some remote interfaces, you know, like a mobile app or maybe an app or something like that. And the thing was quite new there at that point in time. And, you know, my two is just like a five years old, more or less. So we also even newer than they are, and we already saw how they did it. I mean, we had the chance to look at their mistakes and what worked, what didn’t work and so on. And, um, one of the things that we kind of noticed is that they were not really efficient at doing this. They were still doing it somehow, like a brute force, like a lot of investment, huge companies. Huge cash burns. Yeah, they did grow. And the investors actually rallied behind this growth. And they like fueled the growth. And we kind of thought that we already led to that party. And it’s not possible to beat them based on their investments and in the marketing and in the growth itself. Most likely we need something else. And uh, uh, the idea was to be competitive with advantage, which we can consider unfair because it’s not possible to copy, you know, you can copy designs, you can copy experiences, you can copy flows.

Tomas Navickas: Everything is quite easy to copy if you have resources. But efficiency is next to impossible to copy because you would have to change everything. It would be like, uh, it would not be you. So we chose a strategy to be efficient at everything we do and do it in-house and build it to the best of the liking of the client. So we focused on the client. We did it super efficiently and we did it today. I mean, like we have like a would you believe that it’s only like 25 employees in the whole company and we are running like 50,000 clients at the moment, and we are growing several thousand clients every month. And given sufficient marketing budget, we can can grow at any speed. Actually, you want it. Just the question of fuel that you put into the market to be noticed. The only problem that the only challenge that we really have at the moment is to be noticed by some people, because once they start using us, it’s pretty much they stick with us. And that’s to my heart like a it’s a good thing. Like I feel like great. So people use us, they are active. That means that we did a good job.

Kevin Rosenquist: Yeah. You’re doing something right. Yeah, yeah.

Tomas Navickas: So, uh.

Kevin Rosenquist: So what are some of the pain points? What are some of the pain points in traditional banking systems that that you guys are seeking to address.

Tomas Navickas: So the struggles this is probably one of the most boring parts of our of our job. I mean, classical banking, it’s it has been around for hundreds of years. And the pain points that they have is, uh, is not the same that we do have we do have here. And for them, it’s probably the accessibility to the client so that the client can access them. Globally, the market is changing significantly. I mean, the like young people, they interact with gadgets, they don’t really like going to the, you know, branches and some other things. So they have to change and adapt to this. It’s a it’s a huge change for the bank because they don’t really understand. Maybe it’s not really like a that strong statement, but they don’t really understand how to maintain the relationship with such client, how to build trust with such client. Because banking is as an industry, it’s a lot about trust. So the client trusts you. He keeps the money with you, he takes loans from you, he uses your services. And you as a bank can use that and grow and earn your own money and so on. But if you have everything remotely and you take out that part of, you know, contact, visibility, human involvement and so on for the banks, that’s probably a big challenge.

Tomas Navickas: So now the big challenge for the banks is efficiency, of course, because, you know, fintechs created this challenge for them because previously it didn’t exist. And now when the industry is changing and there are faster, more agile companies, they kind of feel pressure on the pricing. And uh, when prices are cut, they lose their profits. And this demands more efficiency. Well, actually, the recent years were very profitable for the banking sector. That’s probably because of the. You know, inflation and interest rate growth and so on and so on. So they. Kind of had the chance to earn quite a lot. Yeah. It’s sad that they can do it. I mean I would like to have that that capacity as well. But for us it’s a long game. We just five years on the market. We need the five more to be like really, really big to be on the level that we actually want to be. And I think we are on that trajectory quite, quite well.

Kevin Rosenquist: So you’re kind of speaking to the point that consumer expectations have evolved, right? They’ve changed over the years. People don’t have any desire to go into a branch if they don’t have to, you know, and that’s a big difference the way things were before. Do you feel like I mean, do consumer demands or expectations change so quickly that you guys have to keep changing as well to keep up with them?

Tomas Navickas: Everyone has to keep changing. So consumer expectations is not the only thing that changed. Probably next generation. I mean, this is a generational thing. It’s not like a over two years. It changed a lot. The device, the platform changed when the phone came and the phone became like a de facto interface into the client, and it became way more secure, way more capable. And now it’s even more secure than anything like a like ten years ago. Online banking involved the cards with a lot scratch code, but but almost like a single time use code. For example, there was a list of codes which you had to enter to authenticate yourself, and then another code. And another code. Imagine how insecure actually that was. And now the device actually has like a good cryptography sandbox, secure environments, the keys that cannot be accessed even by the application itself. You can only use the key, but you cannot really know the key. And those kind of things make it way, way more secure than previously. The other thing that changed is actually the speed at which people interact with with the with everything we are as a company targeting a lot of different kind of users. We can say that we are for everyone, but we are also for for children. And why for children? Because, well, it’s the next generation. They are growing. They need to be financially educated, they need tools and so on. What I wanted to say is actually that the way they interact is not just this device, the speed at which they communicate, the attention span that they have, they have like a second on the page and they swipe through it and they type faster than I can speak.

Tomas Navickas: And it’s crazy how, you know, those young people like a 12 to 18 range, for example, they consume it, this machine at impossible speeds. I just look at that and it’s amazing. And, you know, applications need to adapt. So if you take like a normal banking app, it’s impossibly slow to load, impossibly slow to log in, and then it shows a fraction of information that that person can consume and should consume. And we were addressing a lot of those issues for them, as well as for children to be able to, even at seven. Age like seven years old. Age to be able to understand the app, to navigate through it and to use it efficiently and such with everyone else. So we focused on the app design, on the on the usability, on the speed performance, on the stability of the app. Another problem for the users is that if the application is unstable, they don’t like it, they don’t consume it, they don’t use this app if it’s crashing, if the login is too complicated and you have to re-authenticate yourself using some external devices which you don’t have at the moment. And this was a problem. So we created that. Everything is like a easy to use as much as possible. You know, like Apple would say, it just works, right. So that was the the goal to present something like that for the consumer. And it took some time to build because we did everything in-house without any external development.

Kevin Rosenquist: Yeah. You know, before we jumped on, we were before I hit record, I talked to you about how one of the things that I thought was really cool about your app was the, the area for kids. You know, I mentioned that my, my wife and I both, you know, I’m not blaming anybody, but we didn’t grow up knowing a lot about money. And, you know, we weren’t educated. Really. I mean, the class we took in high school that I took in in high school was kind of a joke, really, as far as how, you know, they taught me how to balance my checkbook. I think I’m older than you, but, uh, you know, that’s great. Yeah.

Tomas Navickas: It is. You don’t have that, I think.

Kevin Rosenquist: Yeah. Well, yeah, it’s pretty useless now, but, um. Yeah, I feel like it’s. I think it’s cool that you want to educate to through the app. You’re not just providing a platform, but you’re providing education. Can you talk about your guys desire that the desire of my to to help with financial literacy.

Tomas Navickas: Yeah. Like like many businesses actually the my two came out of personal frustrations as well as opportunities of course. So some of the frustrations were inability to have easily to open an account for your children. You had to go to the branch, and both parents had to go to sign a lot of documents on the name. And and in the end, while the account is kind of in the child name, but still you have to be involved a lot into how they use it. So it was too complicated. We didn’t like it, so we wanted this to be more simpler and but still be compliant, still be like legally proper, you know, all the documentations, agreements and capabilities and we don’t you don’t have to go anywhere to, to be able to open an account with us. And that’s great. But let me tell me tell you another story, how this actually affects children, which was like a surprise for us. Uh, children from our perspective were reopening for from age seven, so four is a little bit early. But why H7 is? Because when you start going to school, it’s it’s that point in time where you can have the need for some monetary instruments. But what we noticed is actually not that the child gained the capacity to pay for something. Uh, I don’t know. How about you? We are personally having, let’s say, weak money for having like, a giving week, money for children, whatever the age is, that amount they receive.

Tomas Navickas: If you age eight every week, it’s €8 for you, right? More or less like $8, right? Um, if you like ten, it’s ten. And they were like, if they get that money, they spend it the same day. Like literally if they get it in cash, they buy ice cream, maybe some small toy, insignificant. And that’s it. So they wait for the next week. And, uh, it sounds like not too realistic, but it was true for us. True for our friends and true for anyone I talked to the moment they had this in digital form on the app. They didn’t spend it. They started thinking, wow, this is the number that represents my like a wolf or something like that. And the next time they received money, well, initially maybe they didn’t know how to actually spend it, how to use it because the card was on the way when we ordered it and they had to wait. But the next time they received something, they didn’t spend it as well. After a few weeks, they started thinking that they want to collect a lot of money and even without any specific goals, like for some reason, having a lot of like a bigger number was like a game.

Kevin Rosenquist: Just seeing the number go up was like satisfaction. That was the dopamine hit they needed.

Tomas Navickas: Yeah. And interestingly, it was not even about the goals initially. So then we talked. Okay. So you need to plan. So if you have some ideas that you want to buy some toys or you want to have some fun with friends, you, you can have like a, you know, pockets on the app and in the pockets. You can put my name periodically, let’s say half of what you get, you put there and then you can have that big thing you want and so on. So yeah, it changed completely the mindset of child from spending on the ice cream into the saving. And then after a while, when they grow a little bit bigger, they start asking more interesting questions about what to do with the money that they have. Can I do something with it? And that’s where, because we were telling them that the primary function of money is not to pay for your bills. The primary function of money is to make more money. You have to use it to not like, you know, buy crypto or stocks or something like that. Well, that’s very like an attractive short, like a short term results, possibilities and risks and so on. But you could invest it into the businesses. You could invest it into the your own or maybe your friends or some other. And this would be a way to create value. And the value will grow and your money will grow. And uh, this is another level of questions from them. Yeah. So to educate we also run a blogs. So we are making posts for parents how to speak, what to speak, when to speak to children about money, what to say. Like I said, my personal experience is that the education in schools does not cover that at all. Also, parents don’t do that either. And it depends, of course, on the country. One country to another may be more or less like I said, you were kind of lucky that at age 12 you already had like that capacity and that kind of interaction. Most children don’t. And but we have like 10% of our clients are actually children.

Kevin Rosenquist: Well, to be clear, I had a bank account. Still didn’t know anything about money. Still was totally clueless about the way money worked. But I you know, it was still a good intro. Yeah. Is what is is there do you guys work on on financial literacy just in general or is it more geared towards kids, or do you try to help even adults with their financial literacy as well?

Tomas Navickas: I think whatever, I actually cannot tell that we are targeting that. I think we are targeting more children, but we have, let’s say, educators from this sector who just create a content that people can read. We are not giving out, you know, like a financial advisors, because that’s different kind of activities that you do. We are trying to explain what is what And what are the possibilities and how, let’s say show how, let’s say some very specific group of people, let’s say let’s call them rich people are behaving. What are they thinking? How are they thinking to to gain that kind of wealth? And like I said, the more people see different kind of stories, the more they are interested in that, how it works, and maybe they will change something in their behavior.

Kevin Rosenquist: Financial inclusion is something that we talk about a lot on this show. Um, you know, millions of people remain unbanked globally. How do you feel like fintech innovation can address that gap and create more equitable access to financial services?

Tomas Navickas: Yeah. Great question. Um, just correct me if I’m wrong, but from your perspective, from your understanding, financial inclusion is more about, um, being unbanked, right? So there are like groups which don’t get proper services right from, from that perspective. Fintechs and any digital bank in general and payment institutions. They are great because they want clients, they are actively seeking clients, and they create easier and easier ways for you to gain access to those services. So, for example, what we do, we actually have application in different languages, like in most popular languages and not so popular languages too. And we allow to onboard. Well, we operate in Europe obviously, and we have like a license from Lithuania and we passported it all over the European Economic Area so we can provide services in those countries. And there are people who, let’s say, migrate, come to work to Europe, or maybe they they are traveling, they they are working in Europe, but they are living in, I know, in Philippines and somewhere else and having the remote capabilities to to do identity verification, verification. When you lose your device, you need one you need to access. All of that works in favor of exactly that. So they have this capability. The only problem is that they need to know that they have it. It’s quite difficult to actually to convey that message to them that they can do this kind of thing, that if your passport is from Ukraine and you work in Europe, you can open an account and even in regular banks, probably. But, uh, you just you can’t do this and remotely it’s very easy. It takes just like a five minutes in many cases. And then you have account functional, and then you order a card to push it into the wallet. And you can use it like in five more minutes. And it was never so easy like it is now. And, uh, it’s not only us. I think any digital bank is working towards that.

Kevin Rosenquist: Um, yeah, I would agree.

Tomas Navickas: There is another problem. There is a problem which is created by that ease of use. I think you should be familiar with that story. Some of your guests have been talking about it. It’s a bad actors because of the ease, how easy it is actually to gain access to some financial instruments, the bad actors, they are more prepared to do that even than the regular person, because they they have practiced, they have had access to many different tools. They went through the quick processes. They know what to answer to, what kind of questions, and the general logic, which is regulation, which is applied to everyone, to the to the banks, to the fintechs and so on. It doesn’t really work to prevent that. So you cannot actually really catch someone during the onboarding stage. You can do that only during the monitoring stage when they actually start doing some activities. And you can identify some patterns and you can prevent them from the activities. And of the bad actors, it’s not like they are scamming our clients, for example clients. Again, trust is very important part. And for us, from my personal experience from the traditional banks, I mean we had the well not we had I had personally had experience where you are using some authentication tools, some third party application, which doesn’t really inform you what you are doing. If you log in onto site, they say confirm your action or confirm your login. Great. So that that’s covered.

Tomas Navickas: Then you have to confirm payment and it says pretty much the same. Confirm this login operation. Confirm your action. It does not say that who I’m paying, how much I’m paying and so on. Well this is regulated actually that this has to be conveyed to the client on this page. But not every solution does that today in Europe. Imagine that. And that is how bad actors actually trick some people into making payments to some malicious accounts by saying them that, okay, so we are going to refund you something, just confirm that you want to accept it and they see push notification to confirm. And they do this and that’s it. And next day the account is empty. So we kind of thought that this needs to be like a fool. Proof that the person there would be no way for the person to not understand what he is doing on this app. If you are signing a payment, it’s absolutely clear that you’re doing exactly this and nothing else. So that’s what kind of things that we were solving, trying to make people feel safe so they can safely operate. And when they feel safe, they can give the same tool to their children. Because all children are more vulnerable than adults, they have less experience than anyone else. And with that in mind, we created the whole experience that we have on our application. I think we kind of diverted from your question, right?

Kevin Rosenquist: Oh that’s okay. That’s okay. Yeah. No, but I think no, I think it’s the experience is important and the experience is what people need now. And, uh, no. Yeah. Diverting diverting from my question is totally fine. I encourage it always. Great. So how can people get started with my to.

Tomas Navickas: A very easy just download the app and uh, first thing you will have to do is create like your verify your identity. So once your identity is verified you answer like five questions and that’s it. If you are not, uh, there are certain people, certain group of people who are not allowed to have that account so easily. For example, if you are a politically exposed person, obviously we’ll have to ask more questions. Ask about your source of funds in details like ask for more proofs and so on. If you are a business owner who has a significant stake in some significant businesses, it’s pretty much the same. So anyone who has access to some power or money significant those individuals, they will get more questions. But this is normal and this is what every institution has to do. It is by regulation as well as the institutions like risk appetite as well. If you don’t do that, you might not know where the money is coming from and what it is used for. And this is not good. We have to understand who and how the money is operating.

Kevin Rosenquist: Yeah. Interesting. All right. Well, Thomas, really great having you here on the show. Really appreciate your time. The company’s mine, too. Thanks for all your insight. Appreciate it. Sure.
Tomas Navickas: Thank you for having me here.