Thanks to Orca Money for sharing these useful graphics on Marketplace Lending (Risk v Mitigation) and Innovative Finance ISA.  The graphics are below, however you might find the quality of these graphics better on Orca Money's website at:

• Orca Money's 'Risk v Mitigation' graphic available at https://www.orcamoney.com/p2p-lending-risk-mitigation

• Orca Money's 'Innovative Finance ISA' graphic available at https://www.orcamoney.com/ifisa-infographic

Following a number of informative meetings with Padraig Brosnan of Treasury Delta over the past few months, I thought his fintech startup would be a great story to feature on www.fintechireland.com - Peter Oakes, Founder, Fintech Ireland.

Those of you following the Irish fintech scene may have seen our tweet about an article in the Irish Examiner on 8 July featuring Padraig Brosnan, the founder of Treasury Delta (www.treasurydelta.com) discussing his new disruptive product which looks to be one of the more innovative ideas we have seen come out of Ireland this year.

Rather than follow the fintech herd into the financial services consumer market, Padraig and his team have looked to the higher margin element of the banking value chain, i.e. the business to business market, with a solution which allows companies and financial institutions engage in a far more efficient and economic manner when it comes to the pricing of cash management products and services.  If you run a business you’ll appreciate the importance of cash management.  Indeed a CEO of a global bank was recently quoted saying that banks need to do just three things, and do them well, to compete; (1) take their customers’ deposits; (2) manage clients’ cash receivables and payables; and (3) finance their customers’ needs. Padraig and his team are squarely on the money (no pun intended) here. To this end, Treasury Delta has identified a piece of the bank value chain which many banks have long neglected vis-à-vis the best interests of their clients.

Through digital technology, Treasury Delta’s platform revolutionises the complex and overly manual tender process which companies and financial institutions currently undertake.  Treasury Delta’s solution has one [key] outcome in mind – to save companies and financial institutions significant time and money through its simplified and streamlined process.  For example, one key feature of the platform is the communication channel between the company and the financial institution executed via a highly secure and encrypted IT platform which is OWASP compliant.

Although the platform itself is enough to capture the imagination, it is no less interesting than Padraig’s corporate treasury experience with both ESB and Bank of Ireland.  During his time at ESB he gained first-hand experience of how painful, complex and costly the cash management tender process is for both companies and financial institutions. Talking to Padraig I obtained a better understanding of the interest which Treasury Delta  is generating with SMEs, larger corporates and even multinational companies.  Not only will their platform help companies identify cost savings but it will save them significant man-hours on the whole process, particularly for those larger organisations. As we all know an idea is just an idea until it has been researched and tested.  Treasury Delta piloted its platform with both SMEs and corporates in conjunction with some international financial institutions in a very discreet and controlled environment.  Every company was able to pinpoint cost savings with one large corporate identifying cost savings of over 50% on their annual transactional banking charges. Once a company completes the customer journey on the platform financial institutions will respond with their pricing within a two week period. Given the premise of its innovative business model Treasury Delta’s disruptive solution will give financial institutions, particularly new entrants or those with a low market share, the opportunity to bid for new sustainable business in a manner not previously available which is efficient, economical and - in this new speed to market world - timely. 

There are other upsides.  Financial institutions will receive access to highly valuable data analytics on a company’s overall business banking requirements outside of cash management for which they can also quote through the platform, broadening the revenue base for Treasury Delta’s financial institutional clients through the existing business banking relationship channel. Quite a bonus when one considers that the existing traditional manual model does not provide banks with the ability to leverage up-to-date electronic information on a client company’s financial information.  Not only do banks gain valuable economies of scale, they should benefit from lower travel costs given the reduced need to perform physical visits to, and in person verification of data at, a client’s office.  One wonders what else Treasury Delta’s platform can deliver to financial institutions looking to provide additional financial services in a competitive and margin-pressured market. After all, it stands to reason that the more you know about your customer, the better you can identify how you might service it better. 

In wrapping up this piece, I’ll leave final words to Padraig Bronson:  “Treasury Delta’s disruptive solution has been described as a potential game changer for the B2B FinTech market by both a MNC treasurer and corporate banker.  Based on our extensive research we see an enormous international market opportunity here.  Our solution is very dynamic and scalable and we are currently positioned for three markets - Ireland, Northern Ireland and Great Britain.  We are extremely grateful for the support received to date from both the Dublin City Local Enterprise Office and Enterprise Ireland which identifies Treasury Delta as a high potential start-up.  One of our next steps is to bring international investors into our seed round.  We have been very fortunate in having already built a highly skilled technical team and securing channel partners to promote and sell Treasury Delta’s unique product offering into this exciting international market opportunity.”

If your company is interested in using Treasury Delta’s platform for FREE all you need to do is register your interest, which takes less than a minute, at TreasuryDelta.com.

CEO Q&A: Peter Oakes, Founder of Fintech Ireland and Director & Advisor to international Fintech businesses talks to Niamh Mac Sweeney about the challenges and opportunities for Ireland’s fintech industry, and the pioneers shaping its future

Download in PDF here

"First and foremost, the question which every entrepreneur must consider is whether proposed funding terms are fair."

Q: How is the fintech industry performing in Ireland?

Fintech is a bit of a catch word right now. Some think that this industry was born yesterday. However, Ireland has long been the home for many technology firms servicing financial services since the start of the IFSC.

Q: What is driving this evolution?

As technology has enabled greater interaction, many of the tech pioneers turned their attention to financial services, such as payments and mutual funds. Jump forward to today and we are creating a dynamic fintech ecosystem, deeper and wider than the pioneers may have ever contemplated.

Q: What are the key trends and investments taking place in the fintech industry in Ireland?

In Ireland, like elsewhere around the world, everyone is doing their own thing but they are generally pulling in the same direction – from the Government, incubators, accelerators and support groups like Fintech Ireland.

It is great to see Ireland make a statement of commitment to fintech in the IFS2020 strategy. It’s difficult to get any accurate figures for investment in fintech globally. Reports range from $13.8bn to $22bn  in 2015. In the case of Ireland, the figure for 2015 is reported to be $631mn. That’s not a bad performance.

Q: Some of these fintech companies are early stage and fast growth companies. How did these companies come to be established and why is their growth prospects and potential so great?

Some are established by experienced industry hands, others by less experienced but visionary millennials. What they all share is a passion for delivering financial services which are far more connected, efficient, better and cheaper than that being provided by the traditional banking, insurance, payments and investment industries.

Some were established to ‘cherry pick’ specific aspects of the banking and insurance value chain. These players don’t wish to provide, for example, a full banking service, but rather focus on specific services, such as foreign currency (CurrencyFair), money remittance (TransferMate) and providing credit (Grid Finance).

Others are gearing up for new EU regulations which will allow non-banks to use existing bank infrastructure to provide bank accounts and without being a full blown bank.

This is a sea-change, but the real revolution in fintech is the application of data analytics and artificial intelligence to this new banking model (such as Cogni). And the same applies to insurance, such as peer-to-peer personal and motor vehicle insurance and to asset management, which is being disrupted by such creatures as ‘robo-advisers’. The growth prospects for some of these innovative disrupters are quite staggering.

Q: What can we expect from these pioneers in the future?

Don’t expect gigantic profits overnight: rather focus on transaction volumes and revenue generating capability. If this sounds fanciful, think of the success of another tech firm – Facebook. It’s a straight-forward social media play that just happens to sell advertising as an added value service.

Its sales turnover increased by a whopping 51.9% to $5.4bn last quarter and the number of active users jumped 15% year-on-year to a staggering 1.65bn. That’s the power of the internet – interconnectedness.

If you consider that the US fintech firm Stripe processes about $20bn a year, having only been established in 2010, then you might find it hard to believe that it is valued at $5bn plus. When you think that Irish fintech pioneer firm Realex Payments, which in 2015 processed €28bn ($9.2bn more than Stripe), was purchased by a global heavy weight for €115mn last year ($4.23bn less than Stripe), you might feel that Irish fintech firms are a better buy?

Q: With regard to supporting and fostering fintech start-ups in Ireland, what are the conditions for these early stage enterprises, what are the challenges, and are there enough supports for them to succeed?

First and foremost, the question which every entrepreneur must consider is whether proposed funding terms are fair. Many start-ups obtain their first round of financing, in addition to the founders’ own pockets, from family and friends. After that, things are not necessarily easy in Ireland, leading many to look to London and further a field where investors don’t seek as much equity as those in Ireland.

To me this is critical. Ireland really needs to up its game in this space if it wants to keep local talent ‘local’. It is great that we have programmess like those of Enterprise Ireland, accelerators and innovation hubs which can provide advice, strategic thinking and access to both mentors and potential clients.

But if the level of funding is insufficient, if the amount of equity give-up is too much, if investment terms sheets are too one-sided and convoluted, then of course our fintech industry entrepreneurs must look overseas where, quite frankly, investors ‘get it’.

Q: What should investors look for and how should they approach a potential deal?

I know of deals in Ireland where investors in syndicated deals walked away because one of the co-investors imposed so many conditions that the cost of due diligence made the deal uneconomical. Fortunately, another source of funding was located and the deal went ahead. However, I am not so sure that the international investor will be rushing to join another majority Irish syndicated fund rising in the near future.

Irish investors need to understand that they operate in a global world. We also don’t have that many established technology investors in Ireland. The UK, USA and Nordics region adopt a more holistic approach when investing in fintech. They are not looking to make an immediate buck off the transaction.

They know we are going through the fourth industrial revolution. This is especially the case when it comes to overseas public and co-operative society investors. They share their countries’ view that it is best to future proof their economies by establish high-tech and high-value jobs and industries.

I have seen first-hand offers which other countries are making to entrepreneurs, such as interest free ‘settling-in’ grants and loans, free accommodation for staff, rent-free cars and six figure non-recourse investments, all for no equity give-up. 

Q: Are there enough incentives in Ireland for fintech companies to establish a base here?

It is fair to say that Ireland may not be the most competitive, but it is certainly in the top half, perhaps top quartile, in terms of attracting fintech firms to establish a base here. Not everyone will agree. It depends on where your fintech business is on the maturity curve and of course the specific area which you are focussing upon.

IDA Ireland has had many great successes in getting blue chip technology firms to set up in Ireland. Many of these, such as Microsoft, have turned their attention to financial services and have thus morphed into fintech while here. Other fintech and payments giants, such as First Data, are increasing their Irish footprint through strategic expansions.

Irish investors need to understand that they operate in a global world … They know we are going through the fourth industrial revolution

But it’s a different thing altogether when it comes to the smaller entrepreneur which either moves to Ireland to establish their HQ or locals who set up here.

It’s hard to sell Ireland when they feel that availing of Enterprise Ireland’s funding offers means giving up 10% of their company for €50k. I am not saying that this is the correct characterisation of the schemes, but unfortunately this is the perception many have when they read through the T&Cs.

It is not until firms meet with Enterprise Ireland do they get the fuller picture and hear the context explained. And let’s remember, that we have many successful home grown stories including Trustserv, Fernergo, Corlytics, Currency Fair and Deposify where Enterprise Ireland has travelled with them on their journeys.

Q: Does Ireland have the capabilities to establish itself as a regtech centre of excellence?

Without doubt, the answer is ‘yes’. We excelled in regtech long before people noticed its existence. Companies like Norkom forged this market. In recent years we’ve seen the birth of great Irish regtech players which are exporting, including Corlytics and Fenergo.

This area is ‘big data’ and analytics driven. Arguably Irish firms like Corvil have pioneered the work leading to this new regtech space, and there is a lot of promise here.

Thanks to attendees for a vibrant and informative breakfast seminar on Fintech Ireland: Brexit & Fintech - Strategy & Challenges In A Post Brexit World in Dublin, Ireland - Thursday 7th July 2016.  Presenters were Peter Oakes, Founder of Fintech Ireland and James-Paul Galligan, Partner at Galligan Johnston.  Thanks to Galligan Johnston for sponsoring the breakfast seminar so that we could provide the event free of charge. 

Special thanks also to Rónán Gallagher, Chief Product Officer at Alpha Payments Cloud and Garrett Cassidy, Managing Director at Abarta Consulting for agreeing to join an impromptu panel on the day to discuss the implications of a Brexit.

The relatively new Irish Central Bank Governor has just given a speech (16 June 2016) on technological innovation and financial services.  It is a busy finetch week at the Central Bank - it announced enhancements to the authorisation process for fintech firms on 14 June - further details here.

The speech on technological innovation and financial services
  is available here in pdf.  Enjoy.