Andrey Korchak is the CTO and co-founder of Monite. The Berlin-based fintech startup secured a €4.4m ($5m) funding round in February. Point72 Ventures led the raise. Angel investors such as founders from Klarna and Mollie as well as Phil Valka, a senior executive at PayPal, also backed the cash injection.

Monite said that it planned to use the capital top-up to expand across the UK and the States. However, the markets have been hurled into chaos in the months since.

Tech stocks have spun into free fall, the cryptocurrency market has crashed and companies that have spent the past decade enjoying explosive growth have found themselves enforcing mass-layoffs.

Things aren’t much better when you look at the fintech industry as a whole. While funding in the industry hasn’t slowed down as badly as market watchers feared, it’s still clear that investors have grown more conscious about where they put their money.

The restraints have meant that companies like one-click checkout Fast, which had relied on easy dosh, have been cut off from their piggy banks and been forced to close up shop.

Despite these clouds on the horizon, the Monite CTO tells us in this Q&A that he is bullish about the startup’s expansion plans.

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“Uncertainties don’t affect our plans because our plan is to identify unknowns and deal with them,” Korchak says.

Monite is part of a growing wave of embedded finance ventures. Embedded finance refers to the ability for non-financial service companies to provide financial services. Online checkouts that offer insurance or buy-now-pay-later services are one example of an embedded finance solution. Another two examples are Uber’s credit cards and instant earning services for its drivers.

Google searches for "embedded finance" has increased over the past five years, suggesting that the industry is catching the eye of more and more businesses.

Interest in embedded finance is growing for good reason. Juniper Research estimates that the market will be worth $138bn by 2026. Just a fraction of that market would go a long way to top up plenty of coffers. Another reason behind the growth is that the pandemic has forced businesses to diversify their offerings, including introducing new fintech solutions.

As the Monite CTO says later on in this interview, embedded finance just makes things easier for business owners to run their companies and add to their bottom line.

Despite these opportunities, the rollout of embedded finance also comes attached to new challenges. These challenges include concerns about data privacy and compliance to regulations. Failing to step up to either of these could end up being a costly affair.

In this latest instalment of our CTO Talks, Korchak reveals how he started out working on the Monite minimum viable product (MVP), but that he decided to get into the management of the company because he got too bored writing code. The Monite CTO also hints at a slight skepticism towards non-fungible tokens (NFT).

Eric Johansson: Tell us a bit about yourself – how did you end up in your current role?

Andrew Korchak: When we started our company, I was just writing code and working on our MVP. But I can’t just write code – it's too boring for me. That’s why I started to involve myself more with management and the business side of the company.

Today I'm mixing business and tech in my schedule. For a couple of hours I'm working on back-end architecture and after that I'm having calls with customers and product managers. It feels awesome.

Where did the idea for Monite come from?

I spoke to some friends who run businesses in Germany and I realised that every year they spent tens and hundreds of human hours on paperwork. For example, they receive bills printed on paper, then they manually enter payment details to their financial software and process payments.

Then they scan these papers and send them to their tax advisor. It’s so inefficient. And that's not the only problem they have — they also have to deal with receipts, expenses, bills and other documents. My co-founder, Ivan, and I decided to free people from this nonsense admin work.

Why are people so excited about embedded finance right now?

By embedding fintech features into your products, you instantly create value for your customers. If you have a bank, you can give your customers the ability to issue invoices and automatically pay their bills right inside of the banking application. If you have HR software, you can set up a payroll inside of it.

If you have a marketplace, you can supply both buyers and sellers with accounting data. You can easily convert your service into a one-stop solution that solves more than one problem, make someone's life easier and make more money out of it.

All of these examples are part of the super-app trend which now dominates the minds of product managers of IT companies.

How do you think the current market uncertainties will affect investment in the fintech industry?

Embedded finance is a relatively new development: investors and market players need to gather more data on this technology and to see more success stories. Right now some companies are a bit scared to play in this field, but that situation also relates to all new technologies. We have to just wait.

How worried are you about how the market will affect Monite?

Compliance standards, laws and regulations are not ready for embedded finance. Many laws were established a long time ago when traditional financial institutions ruled the world. But the market has changed recently and all these outdated rules and regulations are slowing down the evolution of modern technology. Changes in regulations are coming, but the speed of these changes is not fast enough.

When you raised money earlier this year, you said you'd use the money to expand across the UK and the US. How will the market uncertainties affect your expansion plans?

Startups have to deal with uncertainties, by definition. We identify unknown variables, we look for new information, we produce hypotheses and we run experiments that prove our hypotheses. In the other words, we use classical scientific methodologies and they help us to deal with uncertainties. Uncertainties don't affect our plans because our plan is to identify unknowns and deal with them.

Where did your interest in tech come from?

I spent my childhood in Ukraine, on the farm of my granddad. [By the way,] he is still alive and his name is also Andrey Korchak, I was named Andrey in his honour. After World War II, he served as a military radio operator and radio engineer. He taught me how to deal with complex radio electronics and how to solve engineering problems. I inherited a strong passion for tech from him. He always says "Try to learn as many things as you can in your life, knowledge is something that is always with you and always helping you."

How do you separate hype from genuine innovation?

Genuine innovation solves fundamental problems of humanity and hype doesn’t. New meds, spaceships, and robots do – NFTs do not.

What one piece of advice would you offer to other CTOs?

Hire the best, smartest, and most passionate people you can find and make sure they are happy. Hiring people and talking to my engineers – that is where I spend at least 50% of my time.

What’s the most surprising thing about your job?

It was surprising how many things I have to master at the same time. I have to have a decent understanding of finances, software architecture, computer science, psychology, corporate management, cross-cultural communication, product design, DevOps, and some other things. When I was just starting my CTO career, I was thinking that it was enough just to be a good coder and to understand business.

What’s the biggest technological challenge facing humanity?

I would say the biggest challenge we have is coming from a slightly different place — we struggle with bureaucracy and disconnection between different countries. Even when some new brilliant ideas and technologies appear, it takes years, decades sometimes, to adopt those in the scale of countries and geographical regions. And speaking about technological challenges – I think the biggest challenges for us are waste management and recycling. We are scooping resources out of our planet too fast and we throw away too many things.

What’s the strangest thing you’ve ever done for fun?

I’ve recorded an experimental electronic music album and published it in the US on vintage cassettes.

What's the most important thing happening in your field at the moment?

In IT in general I would say the extremely fast evolution of neural nets — they become more powerful and more complex so fast that I don't even have enough time to follow the news about them. In fintech, I think our company is doing the most important thing right now – fintech-as-code product development.

We allow engineers on the side of our customers to describe fintech products via JSON and YAML files and we supply them with infrastructure that does the job for them. It’s like Terraform, but instead of describing servers and networks in YAML, engineers describe services and components and relations between them: invoices, payments, accounting, and document storage. These YAML files can be stored in separate repositories that can be modified and reused. That gives our customers the ability to create and deploy very complex fintech products within days.

In another life you’d be?

I’ll be doing exactly the same thing I’m doing now. May be I’ll be happy to pass some knowledge from this life to another life in order to speed the company of another version of me

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