Even as a young computer science student at the University of Ottawa, Marwan Forzley was fascinated by the world of business â and in particular by enterprises that were turning established ways of doing things on their head.
Marwan Forzley, co-founder, Align Commerce
Today, the co-founder of one of the hottest financial technology startups in the United States is shaking up an industry that is among the most conservative in the world: banking.
Mr. Forzleyâs company, San Francisco-based Align Commerce, made headlines in November when it landed $12.5 million in series-A funding in a round led by renowned venture capital firm Kleiner Perkins.
A business-to-business payments provider that sends cash via the Bitcoin blockchain â the distributed database technology that keeps track of all transactions using the digital currency â Align has already expanded its service to 60 countries since its launch last April.
âI always like new products in new categories, especially the use of new technology that has the potential to disrupt existing established companies,â Mr. Forzley said during a recent Q&A session at his alma materâs Telfer School of Management presented in conjunction with the Faculty of Engineering.
âWe really pushed the envelope in terms of moving money.â
Unlike traditional wire transfer services, which typically tack on fees from the initiating bank as well as from intermediaries and the recipientâs bank, Align charges a single 1.9 per cent foreign exchange fee. Mr. Forzley said he believes his service can save businesses billions of dollars a year in wire and exchange fees by skipping traditional transfer channels.
The 44-year-old Ottawa native remembers being introduced to voice-over-Internet protocol technology during a co-op stint at Newbridge Networks in the 1990s. Over the years, he saw it radically change how telephone systems worked, and he thinks Align can have a similar impact on the world of banking.
âItâs a new technology thatâs going to disrupt the existing players and bring something fundamentally new to the customer,â he said.
In addition to being cheaper, Alignâs system is also faster and easier to use than traditional wire transfers, Mr. Forzley said. While wire transfer orders require customers to fill out myriad fields, including the names and addresses of the businesses and the bank as well as routing codes, Align uses a much more streamlined system that is accessible via e-mail.
Align also lets users track their payments, much like couriers such as FedEx allow them to follow the progress of shipments.
The company does transmit some payments using the traditional system, but it uses partner payment processors and exchanges to bundle up a number of transactions that are going to the same countries and send them all at once, saving money on individual transfer fees.
Mr. Forzley, a past OBJ Forty Under 40 recipient who sold a previous payment processing firm he founded called eBillme to Western Union, says technology is rapidly changing the face of the financial industry.
âFintech is an area that has seen very little innovation in a very, very long time,â he said. âItâs overdue.â
Investors are quickly jumping on the bandwagon. CB Insights, a New York-based venture capital database, said Bitcoin startups alone attracted more than $375 million in investment in the first six months of 2015, up from $339 million in all of 2014. Investments in the fintech sector as a whole topped $19 billion last year, according to PricewaterhouseCoopers.
Services such as payment processing and even lending that have traditionally been handled by banks are being taken over by third-party companies, Mr. Forzley said, and whatâs transpired so far is just the tip of the iceberg.
âWhatâs happening is the function of the bank is becoming more and more a function of holding deposits and assets,â he said. âEverything else is outsourced.â
Disrupting an entrenched sector such as financial services requires bold thinking, he told the audience at Telfer.
âDonât think of what may not happen, think of what is possible,â he said. âIf somebody tells you itâs not doable, do it. Thatâs how real entrepreneurship happens, is when you go against the crowd.â