Companies in sectors like financial services and insurance heavily rely on data — particularly its ability to forecast customer and business behaviors, a task increasingly dominated by artificial intelligence (AI). Enter Finbourne, a startup from London’s financial hub, which has developed a platform designed to assist financial firms in organizing and utilizing their data for AI and other analytical models. The company has secured £55 million ($70 million) in funding, which will be directed toward expanding its operations beyond London's Square Mile.
Highland Europe and AXA Venture Partners (backed by the prominent insurance giant AXA) are co-leading the Series B funding round, which has valuated Finbourne at over £280 million ($356 million) post-money.
Thomas McHugh, Finbourne’s co-founder and CEO, shared with us the inspiration behind the startup, rooted in his extensive experience as a senior quantitative analyst, primarily at the Royal Bank of Scotland (RBS). His insights were shaped during 2008, a tumultuous year when RBS, at that time the world's largest bank, teetered on the brink of collapse due to overexposure to subprime lending risks.
This crisis triggered an internal upheaval leading to a sweeping reorganization. Previously, RBS operated within distinct business silos, which not only hindered operational efficiency but also complicated data management. Consequently, the bank faced exorbitant running costs that needed to be swiftly mitigated. “We had to remove hundreds of millions in costs in a very short timeframe,” McHugh recalled.
The bank turned to the emerging model of cloud services for inspiration. With AWS, which launched in 2006, presenting a novel approach to data storage and usage, RBS adopted a federated strategy to tackle its data challenges.
“We effectively developed significant technology that applied across various asset classes. Previously, many believed this was unattainable. However, the urgency for change propelled us to create better, more scalable technology,” McHugh noted. Systems that previously operated in isolation—such as equity, fixed income, and credit—were now integrated on a single platform.
The UK's financial crisis in 2008 tested resilience, and for McHugh, it ultimately paved the way for embarking on the high-risk journey of launching a startup.
While Finbourne stems from McHugh and his team’s experience in optimizing data services at RBS, it has evolved to influence how financial services acquire IT solutions today. Similar to firms with extensive sales operations opting for platforms like Salesforce instead of developing their own software, Finbourne anticipates that financial companies will increasingly seek external solutions to enhance their operations.
The integration of AI within financial services further aligns with this trend.
Currently, Finbourne's product lineup includes the LUSID Operational Data Store, investment and accounting books of record crucial for asset management analysis, a comprehensive portfolio management platform, and a robust data virtualization tool. McHugh mentioned that Finbourne is also focusing on optimizing data management for training AI models, an area set for further involvement.
A key observation is that there’s no clear leader in this space, and many banks are cautious about sharing data with one another. They are training models in ways that ensure confidentiality while allowing customers to maintain greater control over outcomes and reduce inaccuracies. The emergence of open-source solutions is also enhancing flexibility for end users.
“Our findings indicate that clients prefer not to have any of our models trained on external data,” he explained. “This strong preference minimizes the risk of model inaccuracies.”
Finbourne faces competition from a variety of players in the financial technology landscape. For instance, asset management rivals include BlackRock's Aladdin, SimCorp, State Street Alpha, and GoldenSource. In the realm of alternative asset management, competitors comprise Broadridge, Enfusion, SS&C Eze, and Maia, with tools for asset owners coming from offerings like BNY Mellon Eagle, Rimes, Clearwater Analytics, and IHS Markit. Additionally, companies providing asset services include FIS, Temenos, Denodo, SS&C Advent, and NeoXam.
The sheer number of competitors may encourage firms to adopt a streamlined approach by collaborating with a single service provider. Notable companies like Fidelity International, the London Stock Exchange Group, Baillie Gifford, Northern Trust, and the Pension Insurance Corporation (PIC) are already on this path.
Ranking
