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Leveris banks on starting a revolution

Fintech has built quietly - now it is time to transform the banking world, founder Conor Fennelly tells Fearghal O'Connor


Conor Fennelly of Leveris

Conor Fennelly of Leveris

Conor Fennelly of Leveris

The view of the rolling green French hillside against the azure sky is so vivid and perfect behind Conor Fennelly's Tony Stark-esque features it could easily be mistaken for one of those fake Zoom backgrounds used to hide a dull beige wall.

But it's not fake. It's real. Fennelly - the eldest of eight children of a Portlaoise newspaper owner - is in the habit of delivering grand visions and, fresh from a run around the village in which he lives between Nice and Cannes, he is in expansive mood.

His Dublin-based startup Leveris is, after seven years of quiet diligence which only barely managed to contain whispers of great promise, finally ready to blast off on its hunt for customers for what is the world's first completely cloud-based core digital banking platform.

In 12 weeks it has deployed the system for Link Group, allowing the Australian financial services administrator to enter the Dutch mortgage market with a faster, cheaper and more flexible system than competitors. The Irish firm can now provide a fully cloud-based system to do all the things digital disruptors such as Revolut and N26 can do. But that is just for starters. The system can replace, in full, the creaking old banking technology from a different era, to which the world's legacy banks are largely enslaved.

Out of the box, Fennelly is confident the Leveris system can power a bank with 10 million customers in less than a month.

"One of the big Irish banks is spending well over a billion euro trying to stand up a system at the moment. McKinsey has found that two out of three of these migrations fail at an average cost of a billion euro. That's a pretty astonishing number."

Leveris is offering a system that is faster, cheaper and has many more features. The company can become "the Google of banking", says Fennelly.

"It's not so much that banks are failing their customers, even though people are disenchanted with how banks are run. But a lot of the issues that customers are frustrated with is actually because the technology is failing the banks. Some of them are literally held together with Sellotape."

Keeping these older systems running costs banks the size of the big Irish banks between €700m and €1bn a year. The white label core banking system now offered by Leveris costs a fraction of that to run - perhaps 5pc or 10pc, says Fennelly. If Leveris can convince some of the cautious bankers and product managers who operate the world's 40,000 banks that it is a safe and robust solution then the potential for the company is enormous, he says.

In 2017, Link Group invested €25m into Leveris to fund its development phase. Fennelly is now waiting for travel restrictions to ease before he begins in earnest the process of raising €100m to fuel the next steps. That will include applying for banking licences in Ireland and the US to add to its Lithuanian Europe-wide e-commerce licence.

The company can also offer the same ready-to-go customisable platform to big corporates who are interested in offering financial services to their own customer base. So, for example, a telecoms or energy company looking for new ways to raise revenue can use the Leveris platform to offer financial services under its own brand.

"It's really important as a small company not to make huge bets all in one direction and to have multiple paths to market. We can service companies that are not banks and offer them a white label financial services platform, making us more flexible and adaptable."

A number of companies have already put it up to the banks by offering services that users love but which old banking systems struggle to deploy.

"One of the things that Revolut and N26 have done is to illustrate to traditional banks that their customers can be taken quite easily if offered a better service and new functionality."

Unfortunately though, he says, the banks have got over their initial shock at this digital disruption because they are not hurting them enough. But providing a system which supports full banking capabilities, Leveris hopes to change this.

"Customers are not substituting their traditional bank because Revolut can't offer loans, for example, so it can't replace them. So now the banks are once again not feeling urgency to change."

Revolut has become an add-on for most people, not a substitute, actually taking pressure off banks to provide this functionality themselves.

"Traditional banks are very conservative. So even though we can offer them additional capability, they're actually quite reluctant to take it. That's baffling to us, but the product guys in the banks are very much in their own lane and don't want to go outside of that. Our technology blurs the lines between products and messes with the hierarchy. So one of the things we are considering when we get an Irish licence is to launch our own bank."

It would showcase the powerful Leveris system.

"We want to create a bank, a disruptive digital proposition, that will make banks sit up. It will have some high-profile branches perhaps - maybe in a place like Dundrum Town Centre - and could revolutionise things. We have a vision for how we can do that and we may do that in the US as well."

Fennelly shares his iPhone screen to demonstrate the new technology. In just 40 seconds, including the time it takes him to snap a picture of his drivers licence, he has set up a new account. Inside this he spends less than a minute setting up a subsidiary account for his daughter, putting €100 into it and snapping a background photograph to personalise a debit card she would be sent.

"I can put a transaction limit on it, let's say €20... after that I get a text if she spends more," he says as the pointer on his phone screen dances across a series of options. "When she turns 18 the system will wish her a happy birthday and ask her to provide passport identity to let her take full control of the account and separate it from mine."

"The great thing about this for a bank is that it means you can on-board the children of your current customers. Usually that's a major battleground that takes place on university campuses."

Fennelly then transfers a euro from his account to a colleague, opting to watch a video advert for a telecoms company in the process. This earns him 5c which otherwise would have gone to an advertising company such as Google but which instead pays his transaction fee. Other innovative features include allowing customers to vary the level of monthly loan repayments, opting out of certain months. Unlike legacy bank systems, the core system is capable of immediately varying the monthly repayments for the customer, allowing a bank's customers to take control of their own finances.

The sleekness and innovation of the Leveris platform owes much to Fennelly's 20 years of previous experience in Silicon Valley.

Growing up in Portlaoise, the eldest child of the owner and editor of the Leinster Express, one thing was certain: the newspaper industry was not for Fennelly. Instead, he went to the University of Limerick to study economics and law, before a Masters in finance and antitrust law at the Sorbonne in Paris. After graduating in the mid-1990s, he obtained a US visa and took a job there with a firm which restructured companies.

"I restructured furniture companies, ceramic tile companies, tech companies, you name it. Generally they were small companies who were hitting growth inhibitors but I was naturally quite good at it and I ended up accumulating equity shares of 10pc, 15pc or 30pc in a number of them," he says.

He would later liquidate these interests, ultimately using the proceeds to build a new financial transaction service which could make micro-payments to people for consuming advertising content - something that would reappear as a Leveris feature.

"I had hundreds of people developing that concept, but the idea of monetising content was really 20 years ahead of its time. But we came very close to success. We had worked out a deal with Hewlett-Packard CEO Carly Fiorina."

But it all fell apart. Fiorina was forced to resign from HP because of a high-profile boardroom disagreement. Fennelly was collateral damage.

All was not lost. HP had valued the technology at $5bn and a number of corporates licensed it for other purposes from what was intended.

"We'd had a fairly good view of what a bank actually was having engineered one of the largest, most scalable transaction platforms on the planet. It was very transferable into the world of banking."

Fennelly had also bought a company called Nomad Software Solutions, based in Indonesia and Singapore. In the early 2000s it became the largest systems integrator in that region, competing with Deloitte and Accenture.

"We did about a dozen core-to-core bank transformations at the time - like what Bank of Ireland is doing right now - moving a bank to a new platform. We learned a lot about the problems when a bank tries to turn into a newer version of itself. To develop Leveris we needed strong conviction about what the bank of 2030 would look like. To do that we put ourselves in the shoes of the customer."

Fennelly was initially happy to show the world the Leveris vision. In 2015 at the NOAA tech conference in London, he presented an early version of the platform. The impact was welcome but premature. "We had overwhelming demand. 60 companies wanted to buy the platform but we were only capable of implementing for two of them a year. So it would have taken us 30 years to service the demand we got from one presentation."

So Leveris passed up the chance to grow revenues immediately. Instead it quietly began to build. "Now we have something that can be deployed in a few weeks, depending on how a client wants to configure certain things. There isn't anyone else on the planet that can come close to launching a full services bank in just a few weeks the way we can."

A lot of fintechs move quickly to show off the technology they have created. "We're the opposite. We've been operating under the radar for seven years for very good reason and very deliberately. But now we're ready to hit the market and we're ready to hit it running."



Name: Conor Fennelly

Age: 50

Position: CEO & founder of Leveris

Lives: Between the south of France, where he has spent the lockdown with his two 13 year-old twin daughters Alyanna and Layla, and Ireland, where he usually spends two weeks a month

Education: Degree in economics and law from University of Limerick and a Masters in finance and antitrust law from the Sorbonne in Paris

Previous experience: 20 years in Silicon Valley as well as time spent in the Far East after buying a company that competed head on with Deloitte and Accenture

Pastimes: Running and cycling

Favourite book: The Unbearable Lightness of Being by Milan Kundera

Favourite movie: One Flew Over the Cuckoo's Nest

Favourite music: Everything from opera and classical to hip-hop. He abhors free-form jazz



What is the secret of success?

I’m definitely a veteran and have had a few hard knocks. We’ve come close on a few things and come right up to the brink and failed. I think everybody thinks you succeed because you orchestrate your own success and you’re this massively smart guy and whatever. But, in the end, I think humility is really important because you’re not the orchestrator of your success. There are many other determinates that you have no control over, in my opinion, that will form you.

But what can you do to help success along?

You have to keep trying and you don’t have to have the full view before you commence. Have a kind of an orientation of where you want to go, follow that direction and when you see an obstacle move around it and then get back on course when you can. But I think it’s the resilience to keep at it day after day when you wake up. It will pay off eventually and I know a lot of people say that but, in my case, it’s certainly been true.s certainly been true.

Sunday Indo Business