In recent years, there has been an undeniable buzz around Irish fintechs. Despite the unprecedented challenges of 2020 and 2021, it's been a record-breaking period for the sector. Global fintech investment hit a staggering €85.5 billion in the first half of the year, and the Irish fintech sector wasn't far behind, receiving investment totalling €932 million – significantly eclipsing the previous record set in 2011 of €596 million.
This wave of investment was fuelled primarily by three major deals. The standout being the impressive $600 million acquisition of Fenergo, a provider of Know Your Customer (KYC) and Client Lifecycle Management (CLM) software solutions for financial institutions, by private equity firms Astorg and Bridgepoint, propelling it into unicorn status.
This upward trend isn't limited to a select few. Companies such as Taxamo, Wayflyer, Carne Group, StrikePay, and Aikido are indicative of the sector's overall buoyancy, with considerable investment pouring in that offers an encouraging picture for those seeking financial backing.
Navigating the Road to Funding
Despite the evident willingness of investors, some fintechs struggle to secure this vital funding, especially when their revenue is still in the early growth stages. This predicament can arise even if the fintech has a sound proposition and fills a unique gap in the market.
Yet, it's not all doom and gloom for Irish fintechs. Lessons can be learned from challenges encountered, as was the case with the unfortunate liquidation of Leveris in July, which seemed to be down to timing and funding issues. Fintechs need to identify the right type of investor – namely a strategic investor who can recognise their value and is willing to invest early. This approach will help them secure funding and lay a strong foundation for future success.
Navigating the Fintech Landscape: Key Considerations
Securing funding is just the first step in a much larger journey. While investment is undoubtedly critical, several other factors can significantly impact a fintech's business trajectory.
As we look to the future, three main issues are expected to influence fintechs, both in Ireland and globally:
Volume of data growth: The increasing rate of data generation and consumption necessitates robust data management strategies.
Security/integrity of data: The protection of sensitive data from cyber threats is of paramount importance.
Accessing data across silos in the cloud and on-premise: The ability to efficiently access and utilise data from disparate sources is crucial for seamless business operations.
Security, understandably, should be at the forefront of consideration. As a nation, Ireland felt the colossal impact of cyberattacks when its health service was struck by a severe ransomware attack in May, resulting in the shutdown of all its IT systems nationwide. This incident had profound implications, from data leaks affecting hundreds of patients to missed vital medical appointments and a lack of certainty around the extent of the data theft.
While this attack was particularly high-profile, many similar attacks go unreported by the affected organisations. Thus, fintechs need to ensure the protection of valuable customer and financial data, as well as the company's intellectual property, at every touchpoint. This is where implementing a robust data platform like InterSystems IRIS becomes indispensable.
InterSystems IRIS: Empowering Fintechs with Superior Data Management
InterSystems IRIS is a complete data platform that offers fintechs the means to manage the growing volume of data effectively, secure the integrity of their data, and seamlessly access data across various environments.
The volume of data growth is a double-edged sword for fintechs. On one hand, more data means a greater ability to generate insights, personalise offerings, and drive innovation. However, it also necessitates a scalable and efficient system to handle and make sense of this data. InterSystems IRIS's high-performance database capabilities ensure that fintechs can scale as needed without compromising on performance.
On the security front, InterSystems IRIS offers features like automated data encryption, role-based access control, and audit logs, enabling fintechs to protect sensitive data and comply with regulations such as GDPR.
Finally, as fintechs operate in an increasingly cloud-centric world, accessing data across silos both in the cloud and on-premise becomes paramount. InterSystems IRIS’s advanced interoperability solutions ensure seamless data sharing across different systems, enhancing business operations and decision-making.
Sailing Towards a Bright Future
Despite these challenges, the outlook for the sector certainly looks promising, with new opportunities emerging constantly.
For startups, three fundamental principles to remember are:
- Everything ALWAYS takes longer than you expect.
- Maintain concurrent investor discussions, not for competition, but to ensure a safety net towards the end.
- Even when you've secured the funding, keep an eye on the journey for the next funding stage.
Embrace the potential of InterSystems IRIS to set you up for success by safeguarding your data and laying the foundations that will allow you to innovate and create new, innovative services using artificial intelligence and machine learning.