27 Apr 10 questions to Robert Bell, the man behind KlickEx
An international award winning financial innovator, Robert is an experienced business leader with a proven track record in the energy, technology, trade, cyber security, economics, banking, and digital financial infrastructure sectors. Robert guides regulatory policy formation and national regulatory operations and is invited to speak regularly on digital financial security and international payments at forums including: The G20, United Nations, Commonwealth Heads of Government, The International Monetary Fund, The World Bank, The Asian Development Bank, and other global financial institutions.
Robert was twice the NZ Hi-Tech Young Achiever of the Year (2012, 2013), twice listed in the Top Banking Executives to Watch (2013, 2014) by Bank Innovation Magazine, and in 2017 won a New Zealander of the Year Medal for services to local communities.
Robert holds degrees in both Finance and Economics, is a graduate of Stanford University’s Advanced Financial & Quantitative Engineering program, studied Cyber Security, Policy and Network Resiliency at M.I.T., and completed Harvard Business School’s Executive Governance program in 2019.
1. Explain your background in detail and tell us your prime goals?
My primary goal is to build a well-diversified business that serves its customers with undisputed diligence. One that looks after the communities in which the customers, employees and other stakeholders live.
I have always wanted to build an organization that people look up to and aspire towards, either to become a part of (as a customer, an employee, a business partner, or someone wanting to build on top of our services in areas we haven’t thought of) – but also – even if it is an inspiration for others to attempt to replicate us in their own way – by imitation (as is already happening) – to magnify the benefit our culture and our ideas can have in this world.
In terms of my background: Some of the earliest memories I have are of growing up on a farm in New Zealand where my parents had a big sheep and cattle station. We grew up in a rural part of the North Island, learning the basics of life the old fashioned way; where hard work is rewarded in front of your eyes, in near real-time: you could really see what you did, each day.
You build your fences, you manage your stock well and everything has really good feedback, so you’re always learning, always optimizing. There is a lot of data that you can measure and model when you run a farm. I really learned a lot about practical and data-driven innovation, from a young age.
I also grew up spending some time in the Pacific islands. I learned a lot about communities, in particular about distant communities in the outer islands of Fiji, Tonga and Vanuatu. This is where I came up with a lot of my early ideas about building advanced infrastructure for people that didn’t have access to that sort of thing.
Seeing all this, I thought that financial infrastructure was the most absent, first, and one of the easiest things to create – things like rural banking and mobile money. So I went back to New Zealand to figure out how I could build a financial service businesses that could help the largest number of people possible. The Pacific Islands had nearly 80% of people un-banked – whereas New Zealand was nearly 100% banked. I ended up going to university and studying economics and politics, regional trade, Marine Science, as well a little bit of law, particularly maritime law, and financial theory.
I then joined the largest bank (in the world) at the time, and I learned a lot about all the details of how the banking system worked, and of course, I recognized a few places where innovations and improvements could be made. Throughout the time there I saw the financial crises unfold, and the provisions that had to be made for that. Billions and Billions of dollars. I learned how to keep the bank running through the difficult times.
After those difficult moments, I went on to do energy trading and I learned about volatility in markets and shortly after that, I began several companies. One of them was KlickEx, another was an Electric Car company, and another nano-technology related.
Pretty soon, KlickEx began to take up most of my time, and began to grow from moving money between bank accounts in real time (something that no bank was able to achieve at the time), to becoming a platform where any financial transaction can go between countries as cheaply as an SMS, and as quickly as email.
We became particularly good at cross border payments and low liquidity currencies. And then, that platform (starting in 2011) really became a tool for a domestic and financial inclusion across the Pacific.
In about 2011, I moved to UK to help expand KlickEx, and I did a lot of work in building KlickEx on the international side, and actually left KlickEx for a short time – acquiring several companies, and running new US and EU divisions as they outgrew the Pacific. In 2013, I came back to New Zealand and became the Chairman and CEO of KlickEx, intent on building services worldwide and representing the communities and the customers that needed socially aware banking services.
We’ve since grown a lot since 2013; in my first 18 months as Chairman, we went from doing $2m in retail sales per year to over $90m, and more than $386m wholesale volumes through our systems. After my third professional CEO didn’t work out – I took on more of a general and executive management role from 2015 onwards – and the business has continued to do remarkably well, pound for pound.
For comparative purposes, one international peer, based out of the UK, raised over NZD 1.5b – for a similar project – and has achieved considerable success in a part of what we do, at a cost of around $150 per customer, and a saving of around (it is important to keep these things in perspective, when evaluating best in class).
We sit at around NZD 25 per customer in total capitalised assets for that same service – and we both have the same (dollar for dollar) absolute net cumulative profit; the bigger one has a 5x capital return on investor funds – the other, although smaller … more like 20x. One has created about $150 in savings per user, savings per user in the Pacific is closer now to $780 – or as the UN said in 2016 – about 20% of GDP per capita, per family.
The key difference across all these fields is “the how” (and perhaps, “the why”): we have achieved ours in the smallest, most distant, least lucrative markets in the world, with very little pre-existing infrastructure … which is really saying something.
For example – we have processed a little over 100% of the combined GDP of our receive markets – something equivalent to about 10x the scale per capita of almost anywhere else in the world, or between $500b and $1t per month, on a like for like PPP comparative basis.
We’ve also been through no less than six technology builds since 2006, and about eight compliance and transaction auditing system overhauls, with hundreds of staff and contractors giving us their best work on aspects as wide ranging as Machine Learning and AI, to Distributed Ledger Systems, AML/Anti-Terrorist Software, FX markets, Collateral Management Systems, Biometric screening, and Central Bank Payments.
To this day I still champion the use of sophisticated financial services, ethically offered, in small communities like the ones where we began; and as such, more than 90% of the households in some of our markets use our services at least once or twice per year, which is huge.
2. Tell us about the company and the services it provides.
KlickEx is the most well known aspect of what we do. We also have insurance services, banking divisions, housing corporations, and own an ultra long range rescue and research ship (2016-2020), medical facilities, invest in agri-robotics and nano-technology for nutrition and food security, and build electric cars, too.
But from a consumer’s perspective, it’s all KlickEx, and KlickEx’s white labelled services to brands like Digicel, Vodafone, local banks, and Central Banks. KlickEx is our auditing and compliance platform that enables the Pacific Islands to have one of the lowest cost, lowest risk payment services in the world, comparing apples for apples. It moves money between bank accounts and fuels the mobile money systems across the Pacific better than anything else in the region – and is impressive on a comparable world scale too. The Pacific is a very connected part of the world – and an extraordinary amount of money moves cross border – especially per capita – but on a percentage of GDP, too.
We built KlickEx in response to a very simple social need – to serve the people who support their families around the region, so they can earn in one country, and send money home quickly, cheaply, and securely.
In the modern era, in particularly in the Pacific, cross-border migration and work is very common. Most of the population from many Pacific Island countries (there are 21) live outside their home countries, working in Australia, New Zealand or the United States, but still have families back home who need help.
Given the differences between each countries’ economic circumstances, there is a major requirement for one part of the family to support another part, cross-border; usually across generational lines. This is very natural – and our system has been very successful in helping meet these needs in a very compliant way. The financial services sector is a regulated sector, and compliance is almost 90% of what we do.
When we started, a lot of the infrastructure was missing in the Pacific, so we went and we built everything from agent location terminals with biometric point of sale devices, all the way through to central banking platforms, credit card systems, and cross-border mobile money; and we’re now one of the most successful regions in the world, having easily accessible, highly-compliant banking services that are affordable, no matter how much, or how little you earn.
3. How did you decide to pursue the career you are working on today?
I chose this career because I believed it was the way that I thought could help the most people. I figured at the time, that when you go to work, you look for something that would be a good job for yourself, so you can provide to your family, but also the job you can help the most number of others. Some companies helped other companies do their jobs – and I like that – but banking seemed to do all of it – help the biggest companies, and help the smallest ones and their employees too.
So I joined HSBC when it had 135 million customers around the world – and I imagined that it would be a great platform to come up with new ideas to help a lot of people. I hoped that if I could make every one of those customers at least one dollar better off every month, that would be a good use of my time.
And the Bank could use all that extra money to go and build banking services in countries like those I had grown up in. I first proposed this, a ‘Flanker Brand‘ bank for HSBC in 2005 – but sadly – that wasn’t meant to be. That project was to happen a little later and was what spawned what has become quite a formidable service today – so I guess all things do happen for a reason, somehow.
I knew a lot of effort was going by the World Bank and other NGO’s to places like Africa and Asia to do the same sorts of things I wanted to do in the Pacific – where financial services were often a gateway to escape poverty and its subsistence lifestyle. And I didn’t want the Pacific to be left behind, when organisations like the Gates Foundation ruled it out, because of their extremely low populations.
Given this, there seemed to substantial future of work for me to do and it was something that I would enjoy, if it could really help people. All I had to do was find a way to make good technology and safe services available to as many families as possible .
4. What was the pivotal moment or inspiration?
There were two. The first time was when I was in Fiji and we were visiting the outer islands, in the Yasawa archipelago, and I saw the barter and subsistence economy in full force. And realised that the Pacific – even though each country was so different – they were also the same in many ways, as this was the same as it had been in Vanuatu. It was a regional problem that could be solved.
At a young age, I could see that back in NZ we had a far more technology focused payment system that enabled efficient commerce. I was pretty young when that happened so it wasn’t really what triggered this as a career, but it planted the seeds.
Fast forwarding to perhaps a more pivotal moment, where I was leaving my trading job for the day, and walked into the foyer of the Hotel across the street: I was working on a trading desk in the City, and when I was a World Bank meeting was happening with focus on the Pacific (back in 2008!) I couldn’t help being extremely interested in all the signs about “Infrastructure for the Pacific”; and I thought “Wow, this is great. The Pacific is finally going to get financial infrastructure.”
Of course, having certain biases, this is what I thought was the most obvious first step. So in I went into the forum, and talked my way into getting a seat. They were talking about mining, and ports, and roads and I thought “that’s interesting but it’s the wrong kind of infrastructure, the first thing you need there is financial infrastructure – otherwise you can’t see the results of anything you do before you sort that out.”
So I got talking to the Senior Executives in attendance, and they said that they would love Financial Infrastructure but nobody knew how to help or how to build it. This is reminiscent of blockchain (2016), in fact, if we fast forward a decade!
At the time, with my experience with banks and trading, I quickly realized that we could build everything from the grass roots stage, and get the Holy Grail of real time payment systems and interoperability, which are now known as Immediate Settlements, Foreign Exchange and Digital Financial Inclusion, all at once.
We could bank the unbanked, do cross border FX in real time and we could do immediate domestic payments too, and so combining those forces into something powerful that had never being seen in the banking world before.
That was the kind of challenge that I liked to have a go at. They said yes – and here we are today.
5. What is the most important characteristic that every CEO should possess?
That’s a hard one because every company is a little bit different, as is the team around each CEO, and so requires a specific recipe of care and attention. So there is not really one rule. Everybody wants to be treated with respect, everybody likes to have a CEO that empowers and pushes them to achieve what they are capable of. And a lot of people don’t know what they are capable of until they’ve been pushed.
As a CEO you have to tread that line very carefully because you can’t drive people faster that they can go, but on the other hand, people get frustrated if they don’t go as fast as they want to go. So there is a real balance between keeping the team focused on the customers, and keeping the team happy, and keeping the business thriving too. Managing team dynamics, and keeping the team focused on the customer is such an art – and to do this effectively through the layers of structure necessary to sustain a business, is a very impressive feat.
6. What are the most pressing challenges that CEOs are facing today (2016) to be innovative? And Why?
We come from a particularly innovative sector – where we began is now known as financial technology or Fintech, and this regarded is one of the most innovative sectors in the world right now. Every CEO is challenged by dozens and dozens incumbents and startup companies in a very established market, bringing to the table new offerings, new opportunities; and the ability to evaluate these claims with the cold light of reality has been the hardest for me.
So many innovations are just the same product, dressed up in lower prices, making VC funded losses that perpetually seem to impress the media, and that’s a hard reality to deal with. I know other industries have gone through this too – Fintech is not as unique as some think it is. But knowing the difference between momentum, created by value, vs a mud-slide towards customers, based on discounting and false economies, is the key to staying alive right now. I predict many investors will feel a lot of pain. So we will see how that all turns out. Time will tell.
We have acquired few companies, we’ve done a lot of diligence on other ones that we haven’t acquired, and of course we’ve been a tremendous growth story ourselves having being recognized worldwide for our Pacific efforts. We’ve seen a lot, and we are getting pretty good at calling the ‘fake news’, for what it is.
Taking all this energy from the market in the innovation space, and translating to something that will really make a tangible difference to your customers, is the hardest thing.
Every person selling innovation or clamming having innovation is not necessarily someone that is doing anything that customers care about, and keeping your team focused on what makes your customers happy is really the challenge in the modern marketplace. No cynicism there, at all; well, maybe a little!
7. What are the key values, which helped you to overcome the roadblocks/challenges in your career as a CEO?
I’ve had a unique path to be a CEO. First I’ve started a company and other than finding my technology partner/co-founder after years of searching, first thing we did was to bring in an external CEO to run the office. I didn’t think, believe or assume that I had the skill sets to manage people and to convince either internal or external senior executives to believe in me, in the slow moving banking world.
Fast-forward 3 years, and I found myself running the company again and the first thing I did was find a new CEO, and again, a few months after that, I was back as CEO again, after a pretty high profile failure – (2020 update: a failure that was repeated by the same individual, over 5 years as a public servant, at the New Zealand Governments Venture Investment Fund, between 2015-2020).
So one of the key characteristics was endurance and perseverance. That’s been a huge factor.
When we first started the company, people would say “Oh wow, you’ve got an amazing technical innovation. How long until banks will copy you and kill your unique service proposition?” And advisors would always give us between 3 to 18 months – and yet we’ve been here nearly 10 years (now 14 years from the earliest days) and still, just about no bank in the world can do what we do.
So, speed to market or agility used to be one key metric, but really I believe that surviving in the long run and making decisions that keep your business going through good times and bad times is a critical to running a company, and this is the success of being a CEO.
Key values are certainly endurance, perseverance, and leadership within your team (and industry) of course – but most of all empathy with your customers. In the short term, and the long term.
Knowing why your customers are annoyed, what frictions they have, and how well you understand the problem that they want to solve, makes or breaks you. If you understand why your existing or future customers have a problem, and if you are solving it the way they hope for, you’ve got a very successful company, but only if you can empathize with that, and read your team, and your business’s vital signs in near real time (once you learn what the true vital signs really are!).
And when hiring people I found no matter the qualification they present, no matter the prior experiences, the best people to look after customers in the most sustainable and profitable and inspiring way, are people who understand what customer problem is and who want to work with you to solve it for their own sense of pride. Where solving the problem for them also gives them a certain status, that everyone benefits from; and helps to keep driving innovation while our competitors’ maintain willingness to not see problems. We love to hire people who never want to see customers be disadvantaged by a solvable problem, ever again. And that is not quite as obvious as you might think.
8. Tell us something about your memorable incident under your leadership.
One of the most pleasing things you can see as a leader, is the success of your team. The success of your team is measured by economic success, innovation, and culture. And I’m very proud to have seen this pretty often, at KlickEx.
Our first incidence was winning the Financial World Innovation Awards, under the Community Banking Initiative of the Year. We had won their Payments Initiative of the Year award, twice before – but never the wholistic “banking” accolade. It was a real thrill for the team. And I was very proud.
Following that, we won the SWIFT worldwide startup award, and again – that was a moment where we were recognized as having broad industry impact and relevance. It was very good to travel again with the team, and end up on the stage at the end shaking hands with very senior people.
But just as important as the pinacles, are the moments of triumph in the deepest troughs. That is also when you see you team shine – and it’s far more revealing than the success of a team surrounded by success.
For this – the moment where we excelled so remarkably, during some of the worst “de-risking” issues affecting all markets so profoundly, but particularly ours, was pretty incredible too. This time, it was the back-office quality of our operation that really stood out. We implemented full alternative and contingency inter-bank-payment systems in a matter of days to protect customers and other non-bank financial institutions in six countries – Full credit to our CFO and COO at the time who really lead that – but no less to the teams that made it all happen, from Technology, to Channel Management; as a full banking market failure rolled out across successive send markets segments in New Zealand and Australia in particular – affecting up to 20-40% of GDP in our receive side markets.
When in 2015, the Governor of the Reserve Bank of Samoa called it ¨Financial Terrorism on Small States¨, it really rang home, the scale and difficulty of the situation at an international level.
KlickEx, and our team, implemented several key systems which still remain in place today, that established us as the “go-to” team for high-sensitivity circumstances.
Following this, our team collected a “New Zealander(s) of the Year” Award for services to the community in the 2017/2018 year. Seeing the team collect that, was a moment I’ll always be very proud of.
9. What would you advise to the budding entrepreneurs entering into the market?
Entrepreneurship is a very hard business. And anyone that enters this field is worthy of praise for bravery, and selflessness, just for giving it a go!
They must expect to give up a lot, in order to make a living, and to succeed.
Being an entrepreneur of a start-up is both, idealistic and very very brave.
Anyone that is getting started, and I’m aware this will sound cliché, but you need to know that is going to be harder and longer than you expect and you are probably going to be the most excited person you know, or your family knows, about your product, to the point that you often wonder if you’re alone in your ability to see what you’re doing.
Be ready to give unlimited amount of energy to those who believe in you, as well as to those who don’t. All while, having enough energy to smile and listen to your customers who will guide you forward. Paying customers are the best advisors, and funders you can hope for. But they too are not always right!
You can’t go out there and be like Kodak, who misunderstood who their most important customers were: assuming it was the high end of the market that would lead the demands and set the trends – they listened to their best repeat customers: Professional Photographers. They misunderstood that the most important part of taking photographs for most of their (very fat tail) client base was not high quality, long lasting, (even if expensive), film – it was the ability to immediately look at photos, show them to friend, share them easily (copy good ones) and take as many possible, before selecting a few, if any, to print or share. The customers willing to pay the most for their existing products, were not good indicators of what most of the customers really wanted.
Know your customers, know your business.
10. How do you see the industry in coming years, and how do you see yourself catalyzing that change?
The coming years are going to be very interesting. There is always change in the financial services industry, even though it looks like a proverbial Swan, sitting gracefully on the top of the water – the legs are always kicking like crazy – whether its for new regulation, new opportunities, new landscapes or possibly new challenges.
Financial services do have a reputation of being slow and moving at a snail’s pace, but the reason they appear slow moving, is because they are not in a race. The only time they need to perform, is when there is a disaster, and at that time, when everything around is collapsing at the speed of light, a slow moving Bank, in that moment, when all others are moving quickly (but in the wrong direction), is basically a God amongst its peers. This industry prides itself on surviving the unexpected.
This is arguably, the primary requirement of any financial services business, in the long run: to buck the trend in a crash.
The only constant is always change, and always has been.
We have built a very strong strategic advantage in the Pacific where we have been fanatic about and focused on customers’ needs, because we have a culture of listening and responding better, I believe, than any other enterprise in our field. Following where our clever customers lead us, is a skill that defines us, and crafts our path towards very exciting places, for the future – but also, right now, as we speak.
As for my part, personally? I am an evangelist of certain things, and someone who likes to be out there solving problems, hands on at times, highly theoretical at times, and as practical as possible, the rest of the time. I enjoy keeping close contact with customers, meeting with partners, regulators, and governments. I enjoy seeing trends a long way out.
We’ve been leading a lot of the major advances, in a region where which some say has no right to expect leadership, a region that’s too small and one which doesn’t have financial scale. But we are the only region on the planet that made a success of using blockchain as a primary system; to see what blockchain can do and where it might lead. The Pacific is literally leading the world. So if I can stay somewhere in the forefront, near the coal face of innovation; then you’ll see me smiling for many more years to come.
Provide the quote that best describes you and your goals.
A: I think I can, I thought I could.
B: Whether you think you can, or think you can’t, you’re right.
A is a quote from The little engine who could. The little engine, was an unsuspecting optimistic train in a children’s story book that tried to pull a load of toys over a hill, so the children could be happy on the other side. And she realized as she went, that the hill was too big; and failure was almost certain. Until she looked at the children, and found the reason that shear willpower and enthusiasm and determination would make it happen. The little blue engine though she could. She thought she could, and so she did.
And with that, she gets over the hill – and all of a sudden, the train accelerates down the other side of the hill and the euphoria from the toys and the train was wonderful. And the little engine surprised even herself.
And so it’s a lesson to everybody.
Like Henry Ford said; and this is my second quote: “Whether you think you can, or you think you can’t, you’re right.”
Article was originally written in 2017; and received minor updates in 2020.