Some of the most innovative developments in financial tech are coming out of the developing world, where populations denied for decades the type of access to banking services that others enjoyed are finding new ways of handling money and transacting commerce.
Irish fintech companies are increasingly tapping into this innovation. Aid Tech is a startup that is looking at new ways of making the sometimes controversial charity sector more transparent
The company has just recently completed a funding round with some prominent US, European and Asian venture capitalists and private investors to raise $2m (€1.6m). A formal announcement will be made in the coming weeks.
It is also an example of a fintech company brought into being by the former staff of one of the big Irish-based tech multinationals, a dynamic that is seen as a key advantage for the growth of the sector in Ireland. Aid Tech’s co-founders, Niall Dennehy and Joseph Thompson, met while working for Ericsson in Dun Laoghaire as technical consultants, travelling to other Ericsson sites around the world working with the company’s engineers.
“We always had it in the back of our heads that we would start something ourselves but we just didn’t know what,” said Dennehy, now chief operations officer.
The pair shared a love of endurance sports and Thompson, now CEO, completed the gruelling 150-mile Marathon Des Sables in 2009, raising $122,000 in the process.
“One donor gave him quite a large sum of money as part of that. The donor later asked him to show him how the money was spent and he wasn’t able to,” said Dennehy.
By 2012, the two became interested in blockchain technology and through interactions with a friends’ charity they saw that it could have huge potential to provide transparency.
“We were able to see a potential application for it based on the experience Joe had in the desert and afterwards how he had not been able to show how the money he had worked so hard to raise had been spent.”
International aid was an even bigger potential market than charity, with some estimates suggesting as much as 30pc of overseas development aid goes missing – or $48bn of the OECD Official Development Assistance total.
The unique transparency provided by blockchain – which keeps a record of every transaction in the chain – could be applied to the problem, they believed.