Five big Ideas from the conversation with Daniela Binatti, Founder at Financial Infrastructure Company Pismo: Pismo's Rise to a Billion Dollar Acquisition by Visa

The global core banking software market was valued at $14.54 billion in 2023 and is projected to grow from $17B in 2024 to $62.75B by 2032. Core banking systems are essential for the products and services that depositary institutions (DIs), including banks and credit unions, offer their customers. These systems handle primary services like account and customer management, deposit and withdrawal processing, loan processing, and finance and accounting. They also often support payment processing and customer support.

Many banks still use legacy core systems that are up to 40 years old. These systems typically have a monolithic architecture where all components are intertwined, often confusingly due to years of patches and customization. They usually run on a single server or mainframe with outdated technology stacks that require specialized skills to maintain. Meeting customer demands for modern services such as open banking, instant payments, and enhanced mobile banking is challenging for DIs with legacy systems.

In contrast, next-generation systems use an open, modular architecture where components are decoupled and can operate independently on different servers or in the cloud. These systems employ modern technologies like microservices, application programming interfaces (APIs), and cloud computing. However, concerns about data security, regulatory risks, cloud service outages, and insufficient transparency from cloud providers regarding contract terms (such as data ownership, backups, and privacy provisions) hinder the mass migration to next-gen systems. Despite these concerns, the benefits of implementing next-gen systems outweigh the risks. One of the most successful examples of the next-gen core banking platform is Pismo, that was recently acquired by payments giant Visa for $1b in cash. Daniela Binatti, a founder and CTO at Pismo joined me on the J Curve Podcast this past week 👏🏻

As of 2024, less than 8% of Chief Technology Officers (CTOs) in tech companies across Latin America are women. This number drops even lower when considering tech companies that provide sophisticated enterprise solutions 🤯. Despite these challenges, Daniela stands out as a remarkable example of female leadership in tech. Her journey and achievements serve as a powerful inspiration, demonstrating what women can accomplish in this field.

Here are the five big ideas from my conversation with Daniela:

1️⃣ Embrace a Global Vision from Day One

Pismo was designed with a global perspective from the start. The platform was built to be multi-country, multi-currency, and multi-language from the outset. This global approach enabled Pismo to expand rapidly and adapt to various markets, making it a versatile solution for financial institutions worldwide

2️⃣ Prioritize Security and Compliance in Building Critical Infrastructure

Recognizing the critical importance of security in financial services, Pismo prioritized security and compliance from the beginning. They achieved PCI certification before launching their first client in production and implemented robust security measures to ensure data safety

3️⃣ Look Beyond Your Industry for Technological Innovations

Pismo drew inspiration from advanced technologies in the social media and streaming sectors. By integrating cutting-edge tech from giants like Facebook, Netflix, and Spotify, they revolutionized the financial services industry.

4️⃣ Build a Strong, Cohesive Founding Team with Complementary Skills and a Shared Vision

Pismo adhered to the principle of presenting a united front. Internal disagreements were resolved before meeting with investors or clients, reinforcing their credibility and strength as a team

5️⃣ Respect Your Investors’ Advice, But Trust Your Intuition and Expertise

Pismo’s early VC investors suggested pivoting to sell to incumbent banks, which wasn’t initially part of their plan. The team took the feedback seriously, reevaluated their strategy, and recognized it as a game-changer. However, they also chose to prioritize service quality over rapid expansion driven by VC pressure

Daniela’s advice to entrepreneurs is Caution with the “move fast and break things” motto. While this approach may have been effective in a time of abundant capital, it may not be the best strategy in today's environment. Adopt a diligent and conscious approach instead. Careful planning and execution can lead to more sustainable and successful outcomes.

Daniela's book recommendation is How you’ll measure your life by Clayton Christensen

You can watch the full interview with Daniela on Youtube 👀👇🏻

Or listen / watch the episode on Spotify 🎧

Before you go, here’s the content I’ve been exploring:

GM has a secret to help sell its new EVs. It’s Costco - super interesting strategy to leverage an established distribution and customer expertise**

Watch a 6-axis motor solve a Rubik’s Cube in less than a third of a second - well at least we don’t need this skill anymore ;)

Invest like the best with Cyan Banister - loved the conversation and especially qualitative vs quantitative approach of startup evaluation

Thanks for reading,

Olga