Holding peoples money is an expensive business after the Great Crash. In 2012, Andrew G Haldane,The Bank of England’s Chief Economist, said that Basel III alone will mean an increase in the cost to the European private banking sector of 70,000 jobs.
In the same speech Haldane also said that there are 3 regulators for every bank in the United States. In America the cost of Frank-Dodd legislation is increasing banking headcount again by the tens-of-thousands.
Since then regulatory compliance in the financial sector hasn’t let up. The volume and subsequent complexity of banking regulation is driving corporate finance in the opposite direction to every other commercial activity: it’s becoming more labour intensive while every other sector is becoming more automated; even retail banking, which traditionally was the most labour intensive of all the financial industries, is cutting branches and automating.
Each regulation means a whole new category of data, documents and requirements to be met, replicating tasks for the compliance teams.
These days compliance staff are not just the sign-off people at the last stage in the development of a new financial product, now they’re involved in the process from the start. And they work across different functions and different jurisdictions in different regulatory regimes.
Fenergo is an Irish financial software company that’s offering hard pressed financial companies a way of controlling the cost drivers from these new regulatory engines. And the company is gaining global traction.
In fact Fenergo’s been so successful that in July this year it announced a $75m investment round with Insight Venture Partners.
It’s product supports customers in a range of areas that the rush of new finance and banking regulations has made much more complex than ever before.
It sells into 4 major sectors of the finance industry: Investment banking; private banks; central banks as well as regulatory organisations and exchanges.
One of the core features of the Fenergo product is the Regulatory Client Onboarding platform.
This facilitates Fenergo’s customers onboarding their clients. The client will likely be complex financial organisations and needless to say increased regulation makes this onboarding process even more complex.
The platform also supports onboarding by collecting the data and documents required to demonstrate regulatory compliance.
The rules-driven workflow engine is a workflow tool that manages all client life-cycle events; beginning with the client “take-on” through the approval levels and all requests for information.
The value proposition with this is that it speeds up the onboarding process and pushes back on the time taken up by prodigious regulatory compliance, relaxing the impediments to client productivity and driving down the total cost of compliance.
Another feature of the Fenergo product, the Regulatory Rules Engine, is a stand alone platform that can be used by customers who have their own in- house or 3rd party client on-boarding management platforms.
The rules engine can act as a source of regulations that help users determine what items and data they need to gather and retain.
These items could be all relevant documents needed; “Know Your Customer” questions that have to be answered; the regulations that must be supported; the risk assessment that has to be undertaken and all classifications that need to be completed as well.
The client and counter party data management platform is a single repository that “manages, validates and distributes data” throughout a client organisation.
It offers a reduction in the complexity of regulatory compliance by allowing users to “re-use existing data and documentation”, while supporting a number of regulatory frameworks.
Additionally, it offers a reduction in the all important metric of time-to-market as well as reduced implementation time with a range of “standardised interfaces” and also a reduction in operational risk with an “ongoing cleansing” of reference and dynamic data that enhances data validity.
Every great software product solves a problem or just makes a set of complex tasks simpler. Fenergo want to do just that for their customers. The more red tape governments and regulatory authorities role out, the more Fenego aim to have their product helping clients not get too entangled.