Fenergo sharing the rules of engagement

Global financial regulations are complex and ever-changing. This year’s Fast 50 fintech winner, Fenergo, recognised this and built a business model around sharing the regulatory burden when it comes to customer on-boarding

Clive Lennox, Silicon Valley Bank; Colm Heffernan, chief operating officer, Fenergo, winner of the Deloitte Fast 50 fintech award; and David Shanahan, partner, Deloitte

The predicament for fintech companies is that while they are often dealing with large sums of money, only a few are what might be called ‘customer facing’. As a result, rapid growth is not always recognised.

The Deloitte Fast 50 has the ability to change that. Colm Heffernan, chief operating officer at Fenergo, was obviously pleased with his company getting first prize in the Fast 50 fintech category. “It was great for us to win,” he said.

For Heffernan it’s not just a question of a gong, though: recognition as a sector winner in the Fast 50 gives Fenergo the imprimatur of Deloitte, a globally recognised brand.

“For us, the thing with the fintech award in particular, playing in the fintech space and seeing ourselves as leaders in that space, it’s great to get that external validation – it’s a global validation, and it’s great for our employees and the people involved,” he said.

The Fast 50 fintech category is sponsored by Silicon Valley Bank, and, fittingly, Fenergo has already developed a global presence, primarily in the global financial centres: London, New York, Toronto, Singapore and Sydney. “We’re also getting traction in the Japanese market and in the Middle East,” said Heffernan.

The company is also expanding, including in its home base of Ireland. “We added 300 people in the last 14 or 15 months and we plan to add another couple of hundred in the coming months,” said Heffernan.

Among other things, winning in the Fast 50 means that Fenergo can get its name out there. “It plays two roles for us, really: on the one hand, everything helps and we’ve already been successful building our brand globally, but fundamentally, in winning new business anything that you can point to that shows external valuation is useful.

“The second thing is that we’re recruiting in Ireland and it’s important when you’re a company that doesn’t have a market presence in Ireland, a company people don’t see in their day-to-day lives, in the battle of talent,” said Heffernan.

Climbing aboard

Like many fintech companies, the business model – and, indeed, the brand – may be invisible to those outside the financial sector, but that does not mean it is simply fiddling at the edges: Fenergo’s job is to make life a lot easier for investment banks.

“The way to think about life-cycle management, where the rubber hits the road, is to think of the regulations the banks have to deal with,” said Heffernan,

“There is anti-money laundering, the tax legislation and so on, [that has to be dealt with] when they have a new customer. You need to make sure that someone is okay to do business with and then do regular reviews, whether it’s every one year, two years or three years. If I’m not trading with a client I’d want to off-board him, as it’s so expensive to keep someone on the system.”

This has been a costly process for banks, and Fenergo’s model is to share the border and combine it with analytics and so-called ‘big data’.

“Banks have been throwing thousands of people at this since 2008, but the regulations keep changing. We’ve developed an application to deal with it. We work with the banks to determine the implementation of forthcoming regulations and we keep that up to date. Rather than every bank solving it for themselves, with Fenergo there’s that mutualisation of cost,” said Heffernan. “It has the right data model to get that to happen.”

Think global

Clive Lennox, who manages Ireland business development at Silicon Valley Bank, said that Fenergo winning the fintech award, as well as coming 11th overall, was a real achievement.

“Given the space they’re in – the target market is large investment banks and so on, which have a long and slow purchase time – it’s all the more impressive,” he said. “It’s a world-beater and has been recognised as world class in its delivery. Just looking at the numbers: revenue is €68 million this year, up from €30 million last year. It employs abound 700 people already, and it’s adding another 300.”

Lennox thinks the Fenergo success story will continue to grow.

“The growth itself has been really substantial over the last three to four years and there’s no sign of the growth stopping. Marc Murphy, chief executive, is a very ambitious guy, and the company pumps a huge amount of resources into research and development. He’s not content in what he’s done and they intend to move into other verticals,” he said.