Paul Pester, the chairman of digital green challenger Tandem Bank, doesn’t have the typical background of a banking industry veteran. A former competitive swimmer with a doctorate in physics from Oxford, he’s spent his career on the leading edge of digital banking in the U.K., managing banks such as Virgin Money and TSB, and even founding a money-sharing app, Loop, prior to taking on his current role at Tandem. As Pester and Tandem CEO Alex Mollart work to make Tandem the U.K.’s greener digital bank, Pester is also co-founder and non-executive director of Archie, an innovative new fintech accelerator launched in 2023 to help incubate and scale tech firms in the U.K., Australia, and the Middle East.
“We’re trying to create a new sort of venture capital business,” says Pester. “Venture capital firms typically spread their bets quite wide. They may make 50, 60, or 100 investments in the hope that one, two, or three of those investments may come good. But the vast majority of VC investments fail.
“What we’re doing with Archie is recognising that the model is very inefficient and broken, so we’re bringing together senior, experienced people who have set up their own successful fintechs and scaled some of the world’s biggest brands. And the capital that we’re going to venture is our intellectual capital rather than our financial capital.”
Paul Pester on Fintechs, Open Banking, and the ‘Next Revolution’
Pester emphasised that Archie’s approach is unique in providing hands-on guidance from a team of individuals with decades of experience leading companies in the fast-growing digital banking and fintech industries.
“Archie leverages the network that its founders have built across the fintech ecosystem and parachutes in our team of experts to offer real hands-on support” he says. “We’re able to talk to providers of financial capital, and are able to bring funding into our businesses if we need to.
“We have networks of people who we have worked with in the past when we’ve been building successful businesses, and we have relationships with regulators. We’re very well connected as a founding team, and so we’re able to bring that ecosystem together to really help our startups.”
The global fintech market is projected to grow at a compound annual growth rate of 16.8% between 2024 and 2032, reaching roughly $917.17 billion by 2032. Central to Archie’s philosophy is the conviction that this fast-growing market has the potential to be a force for positive change, disrupting traditional financial services to deliver superior products, services, and customer experiences. This belief is grounded in an optimism in advancements in technologies such as artificial intelligence and blockchain, as well as supporting the democratising effects of open banking.
“Open banking is a requirement on banks and financial institutions to give all the data they have on a customer to that customer if the customer wants to use it in a different app,” explains Pester. “What does that do? It puts the customer on a level footing with the banks and the banking industry around really understanding their finances. It enables me to share my data, and it enables other service providers to use that data for my benefit and get on top of the bank.
“Over the last 10 years or so, we’ve been through an innovation in the customer interface: the fact that I can access everything on my smartphone,” he continues. “The next revolution we’re going to see is the combination of generative AI and data — with the data coming from open banking — to start building new business models that sit on top of the banking industry and solve real issues for customers.”
How Archie Works: Equity-First Partnerships and Intellectual Capital
Archie’s goal is to draw on its team’s expertise in launching, scaling, and managing some of the most exciting brands to support this next generation of fintechs, helping them reach their potential, reach more customers quickly, and enter hyper-scale. Along with Paul Pester, Archie’s leadership team includes Anthony Thomson, the co-founder and former chair of Atom Bank, digital bank 86 400, and Metro Bank; and Steve Brennen, formerly of Uber, PayPal, eBay, and Zip.
The company adopts an equity-first model for its partnerships with fintechs, providing expertise and resources in exchange for equity. This model ensures Archie’s interests are closely aligned with those of its partners, fostering a true collaborative ethos. By investing intellectual capital and growth expertise in exchange for equity, Archie positions itself as a vested partner in the success of the partners it supports. This approach is designed to provide promising organisations with the strategic, operational, and marketing insights they need to navigate the challenges of scaling successfully.
“We look at fintechs that we think could really transform the sector they’re in and scale very quickly. We are looking for businesses that can be serving hundreds of thousands, millions of customers, businesses that we think will become potentially household names that will transform the sectors that they’re in,” says Pester.
Archie’s operational methodology involves embedding its team within a start-ups business and providing hands-on support to translate strategic plans into actionable outcomes. This approach is built on the premise that effective scaling requires more than strategic insight; it necessitates practical execution and the ability to operationalise growth strategies efficiently. Archie leverages its network and expertise to offer fintech startups services ranging from business strategy and marketing to talent acquisition, compliance, and governance.
“When we invest in the business and we invest our intellectual capital, we are in the business. The analogy to me is that we are on the pitch. We are part of the team — not just shouting from the sidelines,” says Pester.
“For most venture capital funds, their investors are really sitting in the stands and they’re cheering from afar. They’re not actually on the pitch taking the knocks, and that’s what we’re doing.”
To find out more, visit archiegrowth.com.