Irish wealthtech start-up Fund Recs is one of the country’s rising success stories and is now eyeing up the world’s biggest fund hubs.
There’s money in them thar hills, especially when it comes to creating fund reconciliation software, making the lives of banks that bit easier.
To put things into perspective, in Ireland, the number of funds in 2004 totalled €434m. 13 years later, it has grown by almost a factor of five to just under €2.1bn.
Born from frustration
This was what spurred on the growth of one of Ireland’s most exciting start-ups, Fund Recs, which currently has offices in Waterford (where it started) and Dublin.
Co-founded by Alan Meaney and Padraig O’Scanaill in 2013, the current focus of the company is to provide for its client multinational companies (MNCs) with its Velocity fund management platform.
Simply put, Fund Recs’ cloud system was born from the frustration of financial institutions that wanted to process valuations faster and with increased oversight.
Traditionally, fund reconciliation required quite a few members of in-house staff – such as hedge fund administrators – to ensure that the cash amounts in institutions’ systems matched those in the bank statements of the funds.
Aside from taking up considerable amounts of time, it would typically be done in an Excel sheet, manually printing off sheets or working with legacy systems.
Crying out for something that could replace this, Mitsubishi UFJ Fund Services – the Irish subsidiary of Mitsubishi Bank – was the first to approach Meaney and O’Scanaill to develop such a system.
All about who you know
Powered by O’Scanaill’s background in IT, Meaney began pitching Fund Recs as a service to clients in Ireland. He told Siliconrepublic.com that he found this relatively straightforward, thanks to his experience in fund accounting.
This resulted in the company picking up its first major client, Capita Asset Services, a subsidiary of the corporate giant Capita, in 2014.
By tapping into these players, and securing a follow-up deal with original partner Mitsubishi UFJ Fund Services, Fund Recs was able to naturally grow into two additional countries: Canada and Singapore.
“If you can sell locally, you’re on the approved vendors list, so all that due diligence part is done and all of the references are coming internally so that made us stronger again, which worked fairly well,” Meaney said.
“There’s not a lot of industry you could do it with really, because not many would have such a presence in Ireland but with the funds industry being so big here, it was possible.”
Rather than resting on its laurels, however, Meaney said that getting its Velocity platform – launched in 2015 – to more clients will also further its aim of establishing itself in London and Luxembourg in the near future.
Only Luxembourg, he said, rivals Ireland as a centre for fund administration.
However, London offers Fund Recs more opportunities when it comes to the actual management of funds.
Money is a universal language
So, with its service spread across three different continents as of now, does Fund Recs find that the demands placed on it by clients differ from place to place?
Unsurprisingly, it turns out that money is a universal language, and so are the demands for software.
“[There are] very similar activities that they do in the other offices,” Meaney said, referring to his clients. “The biggest difference for us is supporting the different times zones, so it is just a matter of spreading ourselves across the day.”
It hasn’t been as easy as Meaney makes out of course, but Fund Recs has done a lot to win over panels of judges and investors in the four years it has been operating.
This includes more than €300,000 banked in funding from investors, including Enterprise Ireland, which now counts it as a client company.
Fund Recs has a number of start-up awards under its belt, the most recent of which came in May last year when it received international acclaim as the European Startup of the Year at the ICT Spring conference in Luxembourg.
Future of artificial intelligence
Fund Recs’ next step towards gaining greater international traction is to boost the capabilities of its existing platform, easing the workload of fund administrators by developing advanced machine learning systems.
“We have a project we’re working on at the moment to automatically query breaks based on how prior breaks were resolved or queried, so that will be the machine learning side of it,” Meaney said.
“That will, in practice, replace the human thought process.”
Despite finance being considered as one of the sectors under threat from automation, Meaney believes Fund Recs’ own software won’t be putting humans out of work.
“The trend in the fund industry in the last few years has been to move [fund administration] to offshore locations where it is cheaper so the jobs are becoming redundant in Ireland anyway,” he said.
“What we’re trying to do is replace that function with technology so that the experience we have in the fund industry can stay in Ireland and can be controlled from here.”