This series of articles looks to demystify the various C-level roles within fintech companies today – exploring the career paths taken by top managers, their critical skills, daily responsibilities and challenges, and even how the pandemic has impacted their understanding of running a successful business.

This third instalment of the C-suite Series examines the role of the chief operating officer (COO) – the chief executive officer (CEO)’s second in command.

A COO is responsible for managing the day-to-day administrative and operational functions of a business. Since the role requires the post-holder to direct multiple departments, a COO must be resourceful, and have strong analytical, managerial, communication, and leadership acumen.

But what experiences and qualifications are necessary to become the COO of a successful fintech? What does a COO do, in practice, on a daily basis? What are the unique challenges and rewards of holding the position? Has the role changed in the wake of the pandemic? What is the outlook for the role in the long-term? These are just some of the questions Finextra sought answers to, in a series of interviews with the COOs of fintech firms, Paysafe, Vestrata, and Tymit. 

“It is, without doubt, an extremely busy and varied role,” said Danny Chazonoff, COO and CCO of specialised payments platform, Paysafe. “No two days are the same. As well as having a solid grasp of business in general, and customer needs, you need to be adept at understanding data analysis and performance metrics, and have great intuition – being able to identify where issues might arise and resolving problems quickly is key.”

The role

A COO is selected to work in harmony with a company’s CEO. In a start-up fintech firm, a COO is often brought in to help launch the business, and support its development – through experience the founding CEO may not have.

As such, COOs typically develop operations strategies, communicate policies to employees, and support human resources (HR) departments in growing teams. This hiring function will be explored in greater length later.

According to Harvard Business Review article, ‘Second in Command: The Misunderstood Role of the Chief Operating Officer, there are generally seven types of COO:

1. ‘The Executor’, who oversees the implementation of company strategies created by senior management.
2. ‘The Change agent’, who drives new initiatives
3. ‘The Mentor’, who mentors junior members of staff
4. ‘The "MVP" COO’, who is promoted internally to ensure they don't defect to a rival company
5. ‘The COO’, who is brought in to complement the CEO
6. ‘The partner COO’, who is brought in as another version of the CEO
7. ‘The heir apparent’, who is slated to ultimately become the CEO

Whichever group an individual COO falls into, the fundamentals of combining both one’s specific experience, qualifications, and sector exposure, with softer analytical, managerial, communication, and leadership skills, are critical, noted Tim Riseborough, COO and CFO of investment solutions platform, Vestrata.

Experience and qualifications

So, what kind of experiences and qualifications are necessary to become a fintech COO?

A fintech COO’s résumé typically reflects robust experience in the financial services industry. Indeed, it can take a prospective COO 15 years to climb the corporate ladder, and reach the C-suite. In terms of the requisite qualifications, most COOs hold a bachelor's degree, as well as, for instance, a Master's in Business Administration (MBA).

COO and CTO of disruptive credit card provider, Tymit, Nicolas Magnone’s, experience is certainly in line with this trope. “My background has been always in banking and financial services,” he said. “I have over 20 years’ experience, in multiple senior roles in several countries – including the UK, Spain, Brazil, and the US, among others – working mainly in transformation. I've implemented a number of highly complex programmes, and in shifting environments.”

Riseborough has also earned over two decades’ experience in the financial services sector: “Having graduated from the University of Durham, my formative career began at ExxonMobil, where I became CIMA qualified. After, I moved to Goldman Sachs, and rose to Head of Finance for Corporate Services in EMEA.”

Riseborough has also held senior positions at WestLB Asset Management, Credit Suisse, RBS, Barclays Capital and Nomura. Most recently, however, he was Global COO for HSBC’s Commercial Banking Finance function, and programme head for a number of HSBC-wide initiatives in HR and finance. “My career has traversed many product and service lines,” added Riseborough.

Chazonoff’s career has been equally colourful: “Before joining the Paysafe family, my career was in technology leadership positions, as Vice President of MIS and Web Development at BCE Emergis, a subsidiary of Bell Canada, and Director of Operations for AVS Technologies, which was a leading distributor of consumer electronics in Canada. I held these leadership roles having worked up the ranks of these organisations. I’ve always had a passion for technology which was a big focus of mine during my university years. I obtained an MBA from the John Molson School of Business in Montreal which has also been very helpful in ensuring that I maintained a good balance between driving technology and running our business.”

Day-to-day responsibilities

Once the position of COO is reached, what day-to-day duties can be expected?

“As COO and CFO of Vestrata,” said Riseborough, “I am responsible for the planning, management and reporting of the company’s finances, as well as the day-to-day administrative and operational functions of the company.”

“As COO and deputy CEO of Paysafe,” said Chazonoff, “I work closely with our CEO, Philip McHugh, to support the delivery of our short and long-term business goals. I help translate our overall objectives into actionable strategies for our teams to work toward, by implementing goals and processes across our organisation – overseeing many teams and driving collaboration among them, monitoring progress and results, and making adjustments where needed.”

Chazonoff added, “I also work closely with our CFO and CIO to manage capital investment and expenses, and help ensure we are achieving our targets relative to growth and profitability. In addition, I work hand in hand with our commercial leads to maintain and build trusted relationships with key clients, partners, and stakeholders.”

Collaboration was a common theme in the interviews with the COOs of Paysafe, Vestrata, and Tymit. This included working with thought-leaders in the wider industry, as well as internal teams.

“Early on in our history, we were working very closely with the PayPal team,” said Chazonoff. “I had the opportunity to get to know people like Peter Thiel and Max Levchin. Those discussions were very insightful and interesting while we were building our organisation. In more recent years, I’ve had the opportunity to work with senior partners at Blackstone, CVC and Francisco Partners – and now with Bill Foley and his team. I have been incredibly fortunate to be able to learn from both payment industry experts, and experienced business leaders.”

Looking ahead, it seems collaboration will play a key role in overcoming some of the challenges facing financial services and the fintech sector. “Even prior to the pandemic, collaboration was important for the industry,” said Chazonoff. “There are large players, new players, regulators, banks and pure fintechs – and we all bring different strengths. Our industry needs co-ordination – companies need to depend on one another, collaborate and work closely with regulators; and in a world with COVID-19, that need is just going to increase.”

Attracting quality talent

As discussed briefly earlier, another key responsibility of the COO is working with the HR department to attract talent. Depending on the size of the organisation, this seems to be a duty that is shared among most C-level executives. For more on the CTO’s involvement in a fintech’s hiring process, read the second instalment of this C-suite series, ‘Demystifying the role of the CTO’, here.

“One of my biggest challenges is designing and implementing the operating model for Vestrata,” said Riseborough. “In simplistic terms, that's about how we get the right people in the right roles, in the right location – making sure we attract the right talent from a skill set perspective, from an experience perspective, and even from a cultural perspective. But, it’s also about the finances – where is the most cost-effective place to put a new hire? The recruitment process requires me to wear both my COO and CFO hats.”

Magnone, COO and CTO of Tymit, also highlighted the importance of hiring a strong team: “In terms of our values and ethics, we like to reach out and attract younger talent – for engineering, marketing, and product. In an interview, the second we start explaining our company values to a candidate, their faces illuminate. They can see we are devoted to improving the lives of our customers.”

Explaining his own outlook on recruitment, Chazonoff added: “Having the right people in operations is hugely important. I partner with our Chief Human Resources Officer to ensure we are accurately resourced with the right people, and nurture a highly inclusive organisation where our teams can thrive. Diversity and inclusion is an area I feel very passionate about, and we are making some strong headway, but, like many other fintech companies, we still have more to do. I really feel the need to be a culture ambassador, ensuring our four core values of Open, Focused, Pioneering and Courageous are top of mind.”

Hopefully, policies such as diversity and inclusion will play an increasingly important part in the role of the COO going forward.

COVID-19 and the evolution of the COO

Just like any other C-level role, the duties associated with being a COO considerably altered in the wake of the pandemic.    

Reflecting on the impact of COVID-19 on his job, Chazonoff said: “The events of this year have shown us that the payments industry can adapt at pace and succeed in a virtual environment, and in my role this has been about helping to pivot the business and our operations to support the existing and new needs of our customers. Initially, this was about the shift to remote operations – although we found the initial transition quite seamless from a business continuity perspective, given the digital nature of what we do. Now, this has become our business as usual, just in a pandemic context.”

Chazonoff added that unfortunately, the circumstances of the pandemic have resulted in a surge in cyber security threats, as fraudsters look for ways to capitalise on the situation. “It has put increased pressure on our industry to strengthen our defences and be on alert. We have invested heavily in this area to ensure our customers have the confidence and comfort that their transactions and businesses are well protected.”

A COO’s challenges and rewards

As a result of the pandemic, as well as changes in the regulatory landscape, COOs can expect challenges and rewards in equal measure.   

“A key challenge for the role of the COO has to be the pace of change we see in our industry – whether that’s through new regulation or through emerging technologies,” pointed out Chazonoff. “The pandemic has certainly impacted our industry, and we’ve seen a rapid acceleration of trends that had already begun. The migration from in-store to e-commerce, the move to omnichannel, the need to ensure robust global technology platforms, for instance, were already trends. The difference now is that they are no longer ‘nice-to-haves’ – they are a must for every customer we partner with. At Paysafe, given our experience in e-commerce, we have been well positioned to support these transitions.”

Speaking to the most rewarding elements of being a COO, Chazonoff noted: “Paysafe has a rich history, making a lot of acquisitions in the 20 years that I have been with the company. All of these have presented their own unique set of challenges and accomplishments. A particular highlight, though, has to be our recent listing on the New York Stock Exchange, which happened 31st March this year. That really was a huge milestone for the business, and it’s an exciting time for all our employees in general.”

Yet, Chazonoff added that going public is “a marathon” and Paysafe is only at the start of that journey.

The other rewarding part of being a COO, said Chazonoff, is working with the Paysafe team: “One of the areas which has been a source of both inspiration and motivation to me has been how our team members have evolved and grown within the organisation. We continue to focus on many of the values and core principles today that existed when we were a start-up. Throughout our growth we’ve been able to hold on to our ability to be entrepreneurial, think creatively and collaborate well internally – despite being based in many countries across multiple time-zones. For me, our culture, and the way our team members work together is a significant achievement.”

Magnone also focussed on the rewards of witnessing rapid growth, in his appraisal of the COO role: “It was not too long ago that I decided to leave Santander, and participate in Tymit. It is the greatest adventure I've been a part of in my professional career. It’s amazing, and difficult to put into words, the experience of starting only with a dream, back in 2017, and witnessing what the company has blossomed into. Looking to the future is even more exciting yet.”

The role’s outlook

Despite the evident utility of a COO, some commentators argue the role is in decline. The Hambrick and Cannella study, for example, cites a 22% decline over ten years in the number of firms with executives holding the position of COO.

Another study of Fortune 500 and S&P 500 companies, by Gary Neilson, partner of consulting firm Strategy, revealed that only 36% employ a COO. This is down from 48% of the companies on those same lists at the turn of the millennium.

Neilson told the Washington Post that “boards have been holding the CEOs more personally accountable…expecting them to more closely monitor the nitty-gritty of the business and to more closely communicate with executives who once reported to the COO. At the same time, fewer and fewer CEOs – particularly new ones – are holding the joint role of chairman, which has freed up some of their time and reshuffled their priorities. Combine that with the rise of technological tools like management dashboards that give CEOs an instant window into how different units are faring, and it's becoming easier for them to have their hands in the operational details.”

Nonetheless, it would be remiss to not mention the number of financial institutions that have recently appointed new COOs. In August 2020, for instance, NatWest named Georgina Bulkele as the firm’s first personal bank COO. In July 2019, Jennifer Rigby was appointed COO of iconic insurance house, Lloyd's of London.

According to Melissa Powell, President and COO, The Allure Group: “The COO’s demise has been greatly exaggerated. While automation and technology may mean that much of the minutiae of daily operations can be handled with less hands-on interaction, today’s COO is playing a visionary role that looks toward developing the company’s future and implementing its values.”

For Chazonoff, the biggest trend likely to impact his role and priorities going forward is “the high levels of regulation in the fintech space. Implementing industry best practice, in terms of compliance, is a big focus for Paysafe.”

Looking to the future

Ultimately, not all fintechs need a COO. Yet, those that do benefit immensely from the diverse and robust skillset the COO brings to a business. With over 15 years’ experience in financial services – and the academic qualifications to back it up – this can include highly effective analytical, organisational, and communication skills.

Forward-thinking COOs promise to add much long-term value to fintechs in the coming years – a period that will no doubt be wrought with regulatory shifts, exponentially advancing financial technologies, and of course, changes in customers’ needs. A skilful fintech COO can implement a CEOs vision, and safely navigate a fintech through these unchartered waters, with technical innovation and a bulletproof strategy.

With this potential in mind, it is surprising that there are not more COOs around today. Perhaps there would be, if there was better boardroom and C-suite alignment on what the role should entail.

Thinking of the road ahead for his role, Chazonoff is cautiously optimistic: “In the UK there is the question of how the industry will fare once the government puts plans in place to deal with the increasing amounts of debt due to COVID-19, rising unemployment levels, and Brexit. There’s going to be a lot of change, and inevitably, the industry will be impacted. Our approach to all these challenges is to embrace them, co-operate with the industry, and support our employees and merchants. I aim to convert change into opportunity.”