Brian Norton of Ridge Road. Image: Future Finance
If the start-up ecosystem joins the dots and the banks remove the frictions, Dublin could be an unstoppable global force for fintech.
There is a part of Brian Norton’s story that is eerily similar to Facebook founder Mark Zuckerberg’s in that he was a bright kid who went to Harvard and designed websites to pay his way through.
But that’s where the roads diverge. Norton’s path led him into the world of finance, lending and investment, and a circuitous route to Dublin via LA.
‘Fintech at its core is purely innovation and this is innovation that is happening inside banks and outside banks among entrepreneurs’
– BRIAN NORTON
Norton is the founder and former CEO of Future Finance, a company he started in Dublin in 2013 to spearhead student lending in Ireland. He is also partner at Ridge Road, a private investment fund, and he advises promising UK and Irish fintechs, including Flender, Bricksave, Mkopo Kaka and Creditspring.
Norton will be interviewed at next week’s Bank of Ireland-backed Startup Grind in Dublin on 16 October at Slack’s offices on Hatch Street.
“I grew up in Chicago and I was lucky enough to get into Harvard, which, coming from my high school, was a fairly rare thing. I taught myself how to make websites in college to make money and pay my way, and it just worked fine.”
After graduation, Norton had his heart set on joining the technology industry, but it was 2001 and the dot-com bubble had just burst. “The internet bubble popped and all the gleam and glitter of the tech stuff was gone. I decided to join one of my website clients’ real-estate business in California and I suppose that’s how I got into fintech, only we didn’t call it that back then.”
Chipping away at the fintech dream
Entrepreneur Brian Norton. Image: Future Finance
Norton, who happily lives in Dublin with his wife, two kids and dog, pursued an MBA from UCLA and spent his spare time learning new programming languages.
“I suppose I backed my way into finance using the tech stuff I had learned, and I was always doing it with a focus on the application of technology to meaningfully improve the efficiencies and the customer experiences for traditional products like back-office mortgage servicing. Believe me, some banks were still using typewriters in 2001. And, zoom forward to Dublin in 2013, nobody had tried internet-based student lending, so it is all about progress and efficiency.”
Prior to arriving in Dublin, Norton helped to grow several mortgage and student lending companies in the US, including Arch Bay, a $1.5bn mortgage investment fund.
He initially intended to move to London to establish his online student lending venture but was encouraged to come to Dublin instead by a close friend who lived in the city.
“My instinct was that Dublin would be a great place to start a business. The IDA and Enterprise Ireland had done so much to put the country on the map and it was clear that the system was supportive, which is unique in my experience. It became obvious that it was easier to start up in Dublin than NYC.
“Also, Dublin is a small town and therefore easier to move in the right circles when it came to finance and investing.
“There is a real entrepreneurial drive in Irish people, a willingness to try out new things and an excitement about doing things differently. I found that there was an openness to jumping from a safe job to join a crazy, three-person start-up, which is admirable. When people understood what I was trying to do, they got on board instinctively.”
Norton’s proposal was simple: take an idea that worked in another market and try it in Europe. “Student lending has helped thousands if not millions of students in the US to afford education, and it was clear that students in the UK and Europe were getting locked out of education simply because there wasn’t anybody with the guts or the brains to take a chance on a high-potential student.”
Norton got to work quickly. He studied the regulatory environment, hired a tech team and, within five to six months, a customer-facing site was live in May 2014.
“I still write code so I laid the foundations before the main thrust of the development work was done. On day one in June 2014, we made our first customer loan and it grew from there.”
Now an investor in fintech players, Norton believes the rise of fintech and neobanks are symptoms of falling barriers to financial services.
“Going back to the beginning of time, there have always been barriers to getting into finance. For one thing, you need a ton of money to be an effective bank.
“But, if you think about it, until the advent of information technology, not much had changed in the financial industries.
“Fintech for me is actually a bit-by-bit, block-by-block reconstruction of the big web of traditional finance to make finance more accessible, usable, and drive a new wave of efficiency that wasn’t evident among traditional banks for decades.
“In the last 30 to 40 years, everything changed and evolved in our lives, but banking at its core hadn’t changed or begun to change until recently. Most banks hadn’t bothered to change because their profit margins were huge. If it wasn’t broke, why change?”
But then everything did change in 2008.
“Fintech at its core is purely innovation and this is innovation that is happening inside banks and outside banks among entrepreneurs. On the inside, banks are trying to get more efficient, and are dealing with competitive pressure from new challengers on the outside. These are people with new ideas starting businesses that are chipping away at little pieces of the banks’ legacy business. This revolution will be slow and methodical and will level off when banks pare back to being as nimble as the newcomers in terms of user experiences and services that users want.”
With Brexit looming and an existing financial services/IFSC industry of scale, Ireland is gearing up to not only welcome financial giants moving from London to a safer harbour in the EU, but also next-generation fintech start-ups.
How to foster a thriving fintech ecosystem
I ask Norton what he believes Dublin can do to foster a thriving fintech ecosystem.
“I think about this a lot and one of the things Dublin does very well is a host of things; from Startup Grind, to First Fridays at Dogpatch Labs, the NDRC – lots of different things. Lots of disparate things.
“But the problem is a lack of cohesion. You can run around and attend a lot of events and meet lots of people but you can never quite grasp the full picture.
“I wish there would be a bit more coordination and a coming together of the various supports. There are various start-up funds, seed funds and pockets of money all directed at fintech, all doing the same thing. So, there needs to be more cohesion and a critical mass to be more effective.
“If you start up tomorrow, there is no single, reliable place to get advice and do brainstorming. The disparate nature of the supports that do the same thing makes it harder to navigate than it should be,” Norton warned.
In spite of this, Irish-led fintech firms – from Plynk to Deposify, Circle and Flender – are gaining international recognition.
Norton said that Ireland should look at the example set in the UK by accounting organisations such as the Financial Conduct Authority, which provides sandboxes for promising fintechs to go through regulatory testing.
This year, Dublin fintech Assure Hedge became the second Irish company to be selected for regulatory testing in the UK, after Cork-based fintech player Blink was chosen last year.
“I would like to see Dublin emerge as a forceful, energetic hub for fintech and there are so many people working on this. The banks need to get more involved in helping young fintech firms sandbox their technologies,” he concluded.
“With more cohesion, Dublin could be an unstoppable force for fintech.”
