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In Conversation with Andrew White (FundApps)

RegTech, FinTech, Bitcoin, Brexit, nothing is off limits in this episode of In Conversation with...

Andrew White from FundApps talks to Des O’Donohoe about industry trends in regulation, Dublin versus London in the great race for FinTech HQs and why excel sheets are still such a blocker for fund managers. Watch it now.

In Conversation with Andrew White (FundApps)

Hosted by Des O'Donohoe

Video Transcription

Des O'Donohue: Hi everybody. Des from Fund Recs back again. And today I have Andrew from FundApps with me. Welcome Andrew.

Andrew White: Thanks very much for having me.

Des O'Donohue: Right. So, what are we going to talk about today?

Andrew White: Probably something to do with FinTech, RegTech, Brexit, Bitcoin.

Des O'Donohue: All of the above?

Andrew White: I don't know, whatever you feel like.

Des O'Donohue: Cool. So, what's going on in your world? FundApps, you're London based?

Andrew White: London-based, founded 2010, so wow, our eighth birthday this year. Only really got going about 2012. 33 people, 30 customers around the world. So, growing nicely, doing very well.

Des O'Donohue: Very good. So, 15-second elevator pitch. What is it you guys do? What's the problem you solve?

Andrew White: Churlishly I say we keep fund managers out of jail. There's a little bit more to that. But basically all the rules and regulations that the fund managers, investment managers have trouble staying up-to-date with. We offer a service whereby we obviously interpret the regulations, make sure we're up-to-date. But we also encode the algorithm or encode the regulations into algorithms so that basically a fund manager can just upload their positions to us on a daily basis and we'll tell them if they're breaching any UCITS rules. If they need to make any disclosures to regulators, "I own X percent of this company." We also do things around position limits for MiFID two and CFTC. So, basically all the regulatory headache that fund managers dislike.

Des O'Donohue: All right, cool. Because I know at the moment it really seems like death by regulation. I mean, everybody's talking about MiFID. Every single person I'm talking to has got acronyms coming out left, right and center.

Des O'Donohue: Do you think regulations are hurting the industry or do you think no, it's helping the industry? Or a mix?

Andrew White: I'm going to be a little bit biased, but I truly do believe that regulation comes from a good place. Bankers have screwed up before, they've taken advantage of things. Grandmother's money has been lost due to bad investments. So, I think the majority of regulation comes from a good place.

Andrew White: It's generally investor protection, making sure fund managers, investment managers, aren't doing something silly with money. And the second is market transparency. Things like MiFID II, shareholder disclosure that you basically, as a fund manager, need to disclose what your ownership is.

Andrew White: So, I think for most regulation it comes from a very good place. I think the biggest issue has been that because the speed of the velocity of change has increased that fund managers basically have struggled to keep up to date because they're using Excel sheets. They just ignored the, "I need to use technology." So basically they just say, "It's impossible to keep up with this regulation because it's changing so often." But for our service, for example, we provide it to 30 clients. The regulation changes, we provide it to all 30 clients.


Des O'Donohue: I mean, it's interesting to see. It would seem every interview that I do, whether it's a FinTech company or not seems to say Excel comes into it, right? Every single time.

Andrew White: It always does.

Des O'Donohue: It always does. So, I mean like us, you would say then Excel is certainly a challenge for you. Also though, I know you're a CEO of your own, it's your own company which you started. So, at the moment in the FinTech space, what would you say are the biggest challenges facing the FinTech companies to get out there and to start helping? Certainly the bigger players, I know the smaller players seem to have, it's easier for them.

Andrew White: Yeah, I think that the usual thing, there's the issue of cloud. That old chestnut, as we say, which is-

Des O'Donohue: Do you still see that?

Andrew White: I haven't seen it for over a year and quite the opposite that actually people are coming to us now saying, "We only want a cloud solution." We had one Canadian institution say, "We need cloud, we don't want to anything else."

Des O'Donohue: Why? Why all of a sudden, because we've also seen this at Fund Recs. When we started out, I suppose that is going back four years ago, people would have been anti-cloud. I'm going to use the word anti-cloud. They were, let's be honest, they were anti-cloud.

Andrew White: Yeah, they were.

Des O'Donohue: They're not now. Why do you think? Is it cost?

Andrew White: That's a good question. Do we need to know the answer? Probably not. We just need to accept that it's good for us.

Andrew White: (It's) various things. Your average CTO or CIO at a fund manager is now no longer maybe in their sixties, they're in their forties. They grew up with their iPads. They grew up with that.

Andrew White: Cost is without doubt an issue. Alpha's tough to generate, therefore costs are being looked at. So, any possibility. And you know what, the usual thing with humans, you're doing what your neighbour's doing. And if you see other companies doing it and doing it successfully, you're going to copy it. So, I just see a lot of people copying and seeing success stories like Fund Recs brings, like FundApps brings. It's like, well, if somebody knows that we did a good job for a customer, the knock-on effect is there.

Des O'Donohue: Okay. So, the cloud change, that's definitely one thing.

Des O'Donohue: What other ... Actually, even to change the question slightly, what kind of advice would you give to companies dealing with FinTechs to actually de-risk it slightly for them? If they're kind of going, well, it is a FinTech company. They might have a small balance sheet, not a very long track record because they're new to the market. What can they do to help themselves work with the FinTechs?

Andrew White: Another one of my favorite topics. I mean the usual, you used to need six years balance sheets to be able to get into a big bank. I think that's dying out as well. But I mean the usual thing that I tell banks to think about is if I may, I say to them, "Listen, it's a service. It isn't this upfront CapEx kind of expenditure where you're going to buy a million pounds worth of servers and hire lots of people. You're literally switching on a service. Okay, there is some integration work to be done. If it doesn't work out, then turn it off. You get back your data, whatever."

Andrew White: So, the worst case scenario, you lose three or four months, but the whole kind of risk element of embarking on a perpetual license with a vendor for 10 million is no longer the case. Worst case scenario it's a five or six figure sum and six months of that is not that much money for these institutions.

Andrew White: So the whole, this analysis paralysis that you still have. I'm sure you've answered a lot of RFPs in the last couple of months. And an RFP takes three months to answer. And then the implementation takes a week. That's the wrong kind of ...

Des O'Donohue: Yeah, and I know certainly a lot of companies similar to ourselves in size and structure and all that are now looking at RFPs going, "Should we even bother?"

Andrew White: We all know if you've get the RFP, it's probably too late sometimes.

Des O'Donohue: Yeah. Well, that's very true. So, I suppose the FinTech ecosystem, and you're based in London, it's a vibrant ecosystem, yeah?

Andrew White: Yeah. I mean the usual thing, FinTech is not FinTech. I mean, your Zopas, your Monzos, your Starling banks, which are FinTech, consumer organizations. Then you have the B2B like ourselves. So, you've got everything. And I think it's a good mix. I mean, from a technology point of view. Obviously we share a lot of stuff with AWS and clouds.

Andrew White: But I think from, for our point of view, having a B2B FinTech around that you can talk about sales cycles with. And talk about how do you get into these organizations without using an innovation department? It's probably, I would still say the best place in the world for FinTech.

Des O'Donohue: Okay, cool. I disagree with that being in Dublin but. I would. It's my-

Andrew White: Native Dubliner as well.

Des O'Donohue: Native Dubliner, true.

Des O'Donohue: So, the last question that I would like to ask you is for FundApps for 2018, if you had a crystal ball, you say, "Right, fast forward 12 months." What will have changed? What will you guy, other than world domination, what will you guys have done?

Andrew White: Dammit, world domination's always a standard answer. We're not quite on the hockey stick. I keep saying every year we're there, but we sold 10 new clients last year. I would hope we add 20 to that this year. So, really ramping up the sales.

Andrew White: We're hitting a sweet spot of people. As you said, people don't need to be convinced of cloud. They're not worried about smaller companies, even though with 35 people we're not small anymore. So, I think we really see that adoption of there's no real issues to adoption. That we all know like your software like our software, it's the best in the market. What the hell is stopping you? So, we're headed in that now. We're ramping up sales.

Andrew White: We've got our New York office now with three people, we might be looking to open up in Asia as well. So usual, usual story. Land and grab, but obviously also very important, still providing an excellent customer service. Because that's I think the key thing that us FinTechs do is we understand the value of each customer because we've worked hard to get them. So providing a service and making sure they're happy is key to what we do.

Des O'Donohue: I know I said that was the last question but I lied slightly. And I do have one more because it's not often I get somebody who's founded their own company and ran it from the very, very start. So, number one piece of advice you would give to somebody who is a start-up, other than don't. If you were, say somebody's watching this saying well, "I'm thinking I've got a great idea. And I'm thinking of setting up a FinTech company." Number one piece of advice you would give them.

Andrew White: In a nutshell, I would say, have a spine, stick to what you believe in. Banks will try, or any large institution will try to convince you your idea is not worthy or that the price needs to be one-tenth of what it is.

Andrew White: Being slightly older with the gray hairs, I said, no a lot of times to find the right first few customers that understood our value proposition. That understood what we delivered. And others that were looking for the, "Give it to me for 10% of the original price." I just said no to. Even though it was tempting, first customer revenue, all those things.

Andrew White: So, stick to what you believe in. Stick to what you believe the value is. You might change it slightly push that courage of your conviction, because it is easy to get knocked down by these big banks. That's the whole thing of sales. You get told no a lot of times and just keep on going.

Des O'Donohue: Stick to your guns ultimately.

Andrew White: I think your CEO (Alan) once said, you know, "It's a seven year overnight success." It takes a long while to get there. It's not going to happen overnight. Even Facebook took years to get going. So, keep at it.

Des O'Donohue: Yeah. Very true. Very true. Andrew, absolute pleasure seeing you again.

Andrew White: Pleasure. Thank you very much.


Des O'Donohue: Thanks for being here.

Andrew White: Cheers.

Des O'Donohue:
Cheers, thanks.

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