Coin Edition set to exclusively interview Nikolay Denisenko, the co-founder and CTO of Swiss neobanking startup Brighty App and a Revolut alumnus. Nikolay has an extensive background in Applied Mathematics, Business Process Management, and developing applications. As a Lead Backend Engineer, he developed Revolut Business, considered the company’s most profitable division.
In the wake of the recent regulatory move of the EU, Nikolay shares insights on building a fintech startup, solving existing problems in crypto and fiat neobanking, and reflects on the current state of European fintech, the future of crypto adoption, and AI technology.
Q: We have witnessed the serial failures of the US and EU banks, and the fintech startups are riding the wave. What is your take on this? Do you see this as a problem — or an opportunity where you could show your colors?
Fintech startups can’t ignore the regulatory uncertainty, market volatility, and, in particular, the trust issue existing in the market. I see the failures of legacy banks as a unique opportunity because fintech startups are made to keep up with shifting consumer demands and solve problems that haven’t been solved correctly before — way faster than any other market players.
In this situation, fintechs like Brighty App can offer new solutions that customers need. They have the potential to bridge the gap between the traditional banking systems and the unbanked (or underbanked) population, promoting financial inclusion on a broader scale.
Q: Do you still see a gap in the neobanking sector in Europe and globally?
Yes. To begin with, that’s why we actually started building a neobank. The biggest issue is the lack of seamless integration of fiat and crypto. Many neobanks offer traditional banking or crypto services, but not both, so there is a demand for a one-stop solution that would provide better integration of fiat and crypto services.
Secondly, there’s the limited adoption of DeFi among neobanks. The DeFi products give the users the opportunity to yield and earn on the stablecoins in crypto; still, few neobanks offer such products as staking, yield farming, and lending. Combining traditional banking and DeFi can be a win-win deal and attract a broader use case: for example, banks can provide deposits, and crypto neobanks can offer access to DeFi products.
Next, neobanks should aim to provide proof of reserves. That will allow them to boost the customer trust, as all transactions are operated in the blockchain. This is rather challenging, but it should be done.
And lastly, low accessibility is a barrier to the mass adoption of crypto neobanks. In general, the user experience still needs improvement. As an active user myself, I do care and know how the blockchain works, but I don’t understand why the fees are so high. We were targeting to solve these gaps when developing the Brighty App’s product for Europe.
Q: You mentioned some bottlenecks already, and my third question is: what are the major challenges you see for neobanks globally and in Europe?
The EU market is fragmented by nature: with different languages, cultures, and regulatory frameworks across the member states. This makes it difficult for neobanks to scale operations and establish a uniform presence across the region: every state of the European Union has something specific. They have to adjust the application based on the different languages and get a solid understanding of the audience. This is challenging but interesting nonetheless.
Then, there’s the issue of profitability. Sometimes, neobanks focus on growing the customer base but forget that they should get profits to survive in the current turbulent market without relying too much on available investments.
Q: As we know, the SEC has been going after many crypto companies. Regarding Europe, how is their regulation, and are they infringing on crypto adoption?
The trend is generally positive. There are many EU initiatives like MiCA aiming to provide a clear and balanced framework for digital assets, develop crypto regulation, stimulate innovation, and help establish Europe as the hub of blockchain and fintech development.
I like where it’s all going. All these efforts will help drive mass adoption of crypto in the region and positively affect the Web3-connected companies in Europe.
Q: What do you think banks will look like and will function in, say, ten years from today? How do you see that?
That’s all guesswork, but I think blockchain and AI will significantly improve the banking sector in the next ten years. For one, blockchain tech will optimize daily operations: for instance, exchanging information between banks. Banks will prioritize environmental, social, and governmental factors and become more human-oriented.
The KYC (Know Your Customer) procedures will also improve: e.g., there will be no need to go through the KYC again once you open a new account.
Q: What are the main things to consider before building an application like Brighty App?
We prioritize transparency, regulation, compliance, and security. As such, all the decisions we make in building Brighty App are based on these principles. Does it make our app more secure? Is it user-friendly and transparent as we ourselves would like to have it? Are we providing the best service?
We keep the same approach when it comes to any partnerships: which is the best on the market and most convenient to our customers? We partnered with FireBlocks because they provide the best custody service on the market. We integrated their services into our app and plan to improve the overall customer experience.
It’s very important to us: even if the services are costly, we aim to provide the most secure and top-notch technologies to our customers, e.g., cloud services like Amazon that are certified and follow all European GDPR policies. As a Swiss-born company, we are convinced that private trustful wealth management should be in the DNA of the product.
Q: How do you differentiate Brighty App from other wealth management apps? Or why should I use your app rather than anything else?
Our goal is to create an accessible, easy-to-use crypto-fiat application. It offers the most secure and trustable DeFi products we have tested and certified, humanizing crypto and making it easily understandable. Brighty App will help you to use crypto in your everyday life: for example, buying coffee with your Bitcoin.
We also plan to work with businesses providing business accounts and services for crypto startups and companies. This is an issue we know too well: as a startup, it took us two or three months even just to open a bank account for employee payouts. So it is an excellent space to expand.
Q: What is your take on artificial intelligence? Do you have any hopes of integrating AI into the Brighty App?
Yeah, for sure. We have already started to use ChatGPT in our everyday life because it helps to boost productivity. So it is pretty reasonable to implement AI power in development, operations, and, definitely, customer service to make it ‘more human.’ You see, banks are rarely about people: they communicate in a techy language that customers don’t understand, and I think ChatGPT will help solve this issue.
Another thing AI can do is offer personalized financial advice and portfolio management — but it might need some regulation, I assume. And the third pillar is security. We’ll start integrating AI-driven fraud detection systems in Brighty App and have already integrated AI in chats.
I believe a startup should be agile, reacting to whatever happens around you, which technologies are trending, what happens around regulations, etc. That’s what it takes to stay in the market — and to succeed as a company.