Cost-saving consultancy can help businesses get to grips with convoluting banking structures

All companies working in Ireland today, whether they are big or small, have had to learn to perform the same work in much leaner times.

Bankhawk Analytics offers cost-saving consultancy through high-powered technology to large organisations with convoluted banking structures. Sounds like a recipe for success in a climate when cutting costs is a priority.

After five years in business, it has achieved relative success and has some major clients including the Health Service Executive (HSE), Aer Lingus and Allianz.

It is part of the MBAI mentorship programme and is currently being mentored by Ken Greene, COO of Byrne Wallace Solicitors.

“They have a very good model, but the trick is to convert one off business into relationships that lead to repeat business,“ says Greene.

“How do you convert their technology and expertise so that it could be sold on to an accounting practice, or organisation with a large number of bank accounts? And how do you price that?”

The other big issue Bankhawk has relates to the people who they are selling to. “Ultimately it is the financial director who would make the call on hiring in outside consultancy for something like this,” says Greene.

“But then they might go and talk to their guy in charge of treasury and finance and realise this is going to expose them for not already being on top of this. In other words, how do you show the company the potential savings while also keeping the CFO on side?”

It depends on the size of the company. “A service which offers large companies the chance to consolidate their funds through different service providers to make sure the company pays minimum transaction charges, is a fantastic idea,” says Dr Stephen Kinsella, lecturer in Economics at the University of Limerick.

“If they do it properly Bankhawk will be rich. But if you already have a corporate treasury department, you shouldn’t need this service. You shouldn’t have these problems at a very high level. It should be ‘Bob in accounts’ job to solve it. You’re talking about outsourcing Bob.

Data protection

“However, this service could be very useful for medium- to large-sized companies without the resources to focus in on such areas. Medium-sized companies have accountants and treasury departments but they won’t have people whose job it is to actively manage the flow of funds around the business.

“In essence, Bankhawk brings in multinational clout at a medium-sized level. So a company with say 40 employees and a turnover of €20 million a year might be able to increase their cash flow significantly with a service like this.”

The sensitive areas of data protection, client trust and technological reliability present their own issues also.

“I can only assume that there’s quite a lot of skepticism out there from people wary of outsourcing their sensitive cash- flow information,” says Kinsella.

“If these guys are running algorithms and storing sensitive data, what do they do with that data? There may be important information my competitors might like to see. If I were in a high-growth industry, I can’t have my cash flow outsourced anywhere else.

“And what if a client works with Ulster Bank?” asks Kinsella. “Do you really want to be dealing with figures from Ulster Bank’s computers given their history?”

Bankhawk Analytics expect to become ISO 27001 certified in January. It is already certified in everything but name, but it’s an important milestone for a company where trust is vital.

Software security

“So far we’ve been put through the ringer by some big clients because they don’t want to give us their sensitive financial information unless they know we’re secure,” says Brian Weakliam of Bankhawk. “And we need to tick a lot of boxes to get their trust.

“In terms of software security we have the latest forms of encryption – 256 bit, AES, SSL. This is internet at banking level security which includes multifactor authentication.

“Security is something we take very seriously. But if our existing clients didn’t think we were secure, they wouldn’t give us their information.”

Numbers game: 'Within minutes... we can determine how efficient a company is, even if it has hundreds of bank accounts'

Large organisations have complicated bank statements. They might have dozens of accounts spread out over five or six banks and, more frequently, five or six countries too.

So it might be difficult to stay on top of your banking costs and know whether or not there are better deals out there waiting. Brothers Brian and Joe Weakliam may have come up with a solution. “Bankhawk was set up in 2007 by my brother Brian,” explains co-director Joe Weakliam.

“He had been working in AIB corporate banking for years, particularly in the areas of customer profitability systems and learning how best to make margins on corporate clients. He also worked with credit unions to help them optimise their banking.”

Brian had gained invaluable expertise to improve efficiencies over the years and decided to set up a new business with his brother Joe who brought mathematical and computer skills to the table. “I have a PhD in computer science,” he says.

“Brian had devised methodologies over 10 to 15 years in the business and I created algorithms out of that information. These algorithms interpret the information and come back with the right analysis. It’s an analytics tool.

Transactions

“Within minutes and from a single viewpoint we can determine how efficient a company is, even if it has hundreds of bank accounts. How we present it is incredibly powerful and yet very simple.”

One major Irish client they have an ongoing relationship with is the Health Service Executive. “Every quarter they send us over their online banking files,” says Weakliam. “The HSE has thousands of transactions happening all the time with myriad transaction info. A very large file statement could have up to 15,000 rows of information in any given month. Our software goes through a standard bank statement – literally line by line – to try to return a dashboard to the client with key performance indicators, showing credit and debit balances and transaction costs. We also assess risk, which is very topical at the moment.

“Benchmarking is a big part of what we do,” adds Weakliam. “We know what’s best practice out there. So we can do comparisons with companies in a similar sector. Most companies won’t know what sort of a deal they’re getting from their financial institution when compared to others. They don’t tend to be able to determine whether it’s good or bad. It’s comparisons which are really valuable.”

Given that Bankhawk Analytics exposes where banks are making their margins on bigger clients, they must be less than popular in some circles. Not necessarily, says Weakliam. “We introduce new business to banks,” he says. “We need them and they need us. There will be certain situations where a bank will be making high margins on a client, but ultimately banks are in the business of making profits too.”

Bankhawk Analytics has been endorsed by the four main accountancy firms and its Irish clients include Aer Lingus, and international firms include companies such as Allianz, Mercer and Eureko. It has taken on a number of technology and finance graduates since 2007 to help grow the business.

Like all small companies, however, the big issue early on is getting proper awareness around what it is it does. Many potential clients it approaches are apprehensive about how time consuming a process it will be. “It doesn’t take much time at all to get accounts information across to us, but many people we pitch to seem to think there’s more work involved than there actually is,” says Weakliam.

Message

The other major challenge now for Bankhawk is brand identity and brand awareness more generally. It is at a crossroads in terms of positioning itself in any market. If it says it is just another financial consultancy firm, this plays down the importance of the technology being used. If it deems itself a technology outfit, companies will just want to buy the software and use it themselves.

Neither does justice to what it actually does.

“If people see us as a technology company, how do we price ourselves?” asks Weakliam. “If we are a consultancy company we distance ourselves from the high- powered technology we’ve designed. So it’s trying to get that message right.

“We’re a company with nine staff in all and we do a lot of our own sales, but it would be great to have partners helping us with that side of things.

“Speaking to the right person in an organisation

can also be a problem. When we need to speak to the company CFO, we sometimes end up being directed to HR,” he says. “But as everyone is considering costs right now, we’re very confident that once people know who we are and what it is we do, demand will follow.”