Podcast

Above the Parapet: Sean Kiernan, Greengage

In our inaugural episode of Above the Parapet, we speak with Sean Kiernan, founder and CEO of Greengage about founding and growing the business.

In our first episode of Above the Parapet, Sean Kiernan sits down with Jordan Greenaway to discuss founding Greengage, scaling the business, and disrupting the financial industry.

In each episode of Above the Parapet, a member of the Profile team sits down with an entrepreneur who is bringing a new idea to market. The podcast shines a spotlight on innovators and disruptors who aren't afraid to swim against the tide in their industry – and challenge conventional wisdom.

Sean Kiernan

Sean Kiernan is Founder and CEO of Greengage. Founded in 2018, Sean and the team at Greengage are seeking to create the world's first next-generation merchant bank for the emerging digital financial economy.

Sean founded Greengage after helping to lead Falcon Private Bank, which was the first bank globally to offer crypto products to its clients.

He previously held leadership positions at Clariden Leu, a division of Credit Suisse, and Zurich Financial Services.

Transcript

Jordan (J): Welcome to Above the Parapet, a new podcast from Profile, where we interview entrepreneurs and business leaders who aren't afraid to challenge conventional wisdom and swim against the tide. 

Today, we'll be speaking to Founder and CEO of Greengage, Sean Kiernan. With a proven track record in financial services, banking, and management, he founded Greengage in 2018 to bring a new form of relationship banking services to digital companies. Working at the cutting edge of finance, he is at the forefront of the digital banking revolution. Welcome, Sean. 

Sean Kiernan (S): Delighted to be here, Jordan. 

J: So, before we get into talking about Greengage, can you just give me an introduction to yourself, your own career, how did you start out, what type of companies did you work at? And just give me a bit of a sense of your career, Sean. 

S: With pleasure. I'm a first-time founder, and that is unusual, I think, at my age. I just turned 40 over the holidays, and having been in finance for almost 20 years and setting up my own business, there's a few challenges in that. Not least of all, the steady salary that you get used to, but also the aspect of having a full team.  

And I've grown up and cut my teeth in the US, moved to Switzerland and then came here in 2010 to London. And throughout that journey I've worked at Swiss banks and now UK institutions and seen quite a wide variety of how things tick in different countries. 

But I do feel at home very much in London now; it's kind of a great place to be, and it's why I wanted to set up Greengage here, in an international financial center. 

J: And I've looked at your CV and your career, and it was very heavily weighted towards traditional banking. Is that right, Sean?  

S: What I saw in traditional banking was largely great things. There's still a tradition of thinking about the client and what they want, but I think there are things that we slightly have lost by the wayside. There was a tradition, particularly in the UK, of merchant banking, of getting to know a client and sitting on the same side of the table as them and using the balance sheet of the institution to support that client's business. 

These things are tricky nowadays. And what I love, and what we're trying to do at Greengage, is open up these walls, if you will, to allow a client to access not just the firm's balance sheet but the wider balance sheets that are out there. So, this would be called Web3 banking, in the kind of modern parlance.  

J: And, for someone sitting down now, just kind of break it down. What does Greengage do? What is Greengage? How would you give the kind of elevator pitch?  

S: We do three things, and collectively we're aiming to do what we call digital merchant banking. The first is e-money business accounts, that allows us to do payments and cards for a business. Transactional banking, essentially. 

That coupled with the tech stack that we built ourselves, primarily on the sales force, the big machine that a lot of us use, which is also a workflow tool. And the third thing, which is what I was referencing, which is a platform business. So, we can help clients source funding for their business across a wide variety of debt instruments. 

And here, we hear fintechs coming out every day with something new, and we call this a credit library, if you will, of innovative ideas that for a particular business may or may not work. And it's our job to distil those and help a firm to navigate the tricky waters of what might be relevant for them. 

But, in addition, our edge is that we get crypto and we get digital; we get all these new technologies around the blockchain space. And so we can bridge the traditional world of finance, in sourcing funding and providing transactional banking services with what is this wild and crazy world. 

And we see a lot in the press around crypto, DeFi and NFTs. These are also sources of money. They come in different packages, obviously, but ultimately, as long as an entrepreneur gets the funding that they need for their business and it's clean and safe, that's our job to help them.  

J: And this is what has always struck me about the kind of digital banking and crypto space. How there's lots of opportunities out there for SMEs and businesses, maybe to bridge finance, raise capital. But it's just so difficult to navigate. How do you make that more accessible for companies?  

S: A big part of that, as we've seen with FTX, is counterparty risk. If you're putting your chips on the table and you don't know if that table has good legs, you could lose your chips. 

What we're trying to do is say, okay, we will work with what we hope are the best-in-class counterparties, but we'll take some of the pain away. So that if a firm needs something, we have a relationship, we're, as you say, relationship bankers, and that's the focus of what we are, and we want to get to know someone. And in the future, what I think are the only things a banker will really do, are have relationships and have data, and organising that data in a way that's intelligible for a client, and getting to understand what is uniquely useful for them. It means understanding the risks that they have, means understanding what makes them drive the business. 

Often businesses, and I'm sure you know this being an entrepreneur yourself, are different and each one ticks differently. Each one has individual people. It's one of the things that excites me about banking and the way that we're doing it. It's not cookie-cutter, so we're not attempting just to do tick-box things. We're working with the metaverse, and we're working with places that haven't really been invented yet and finished, and that gets me out of bed and gets me excited. 

J: And this is what impresses me about you, Sean. Look at your CV, you were at Zurich and Credit Suisse, and there's this kind of perception that they're very staid and stable, and comfortable. And you decided to make the choice to start something new and different. Was there a single moment where you said, actually, I'm gonna try and do different here? Or was it a gradual process?  

S: I think most entrepreneurs do it because they're slightly frustrated with where they are. And I don't wanna knock anyone; I think these are great institutions, Credit Suisse, et cetera. But, the thing that I felt is: they're so big. And these are super tankers, but when we look at the new technologies as they're unfolding, it's really difficult to do the most innovative things in a supertanker. You need a speedboat.  

And what I wanted to do at Greengage is set up something that, we're now 30 odd people, we're still nimble enough to keep our ear to the ground, move quickly, but do things in a proper way. 

And I think, ethically, one thing that was very important, also philosophically, is working in a space that is doing things by the book and doing them well. And in our industry, particularly, that speedboat, if it's on choppy water, needs to make sure that it has all the instruments in place to protect its good advisors and good people. 

J: And when you are setting up something new, especially in a kind of emerging, innovative industry, where you're not only setting up a new company, you're doing things in a kind of dramatically new way. 

Is there resistance or difficulty selling that to clients, policymakers, investors?  

Because you're having to speak in quite a new way and tell them ideas that maybe they might not have heard before.  

S: Completely. We've done things like write a glossary or write reports for parliamentarians looking at this topic and have tried to set up industry bodies or at least contribute to industry bodies. Because for us, it is a new lingua, but it's also a way of approaching problems, particularly in finance. Regulation has shaped so much of the way we understand modern banking. 

And ultimately, if you distill it down to its key components, banking is liquidity and the pricing of risk. And, the way we're expressing that is very much according to the way regulation has shaped the way a balance sheet is structured, the way we think of risk-weighted assets. And, what I'm trying to do is just take a step back and say, okay, what does a client actually want? What are the safe ways to deliver that? 

The challenging thing is, in a new space like this, there are charlatans and fraudsters. And you have to be constantly vigilant because even if someone presents as a credible actor, and we've seen that in this past year, a lot of firms – particularly in the crypto industry more broadly – had institutional money, big investors, regulation. 

Regulation isn't the be-all and end-all all in terms of protecting people from risk. It's still down to intellect and counterparty understanding, experience, and even and then, the macro conditions can turn against you. What we're trying to do is just bring that all together, form a coherent communication strategy.  

J: And, I think, when we talk about doing things differently, and we talk about crypto, it's obvious to go into a discussion of how crypto is challenging traditional finance. 

But actually, I think, in many ways Greengage is also challenging how crypto is conventionally done.  

If you look at most crypto companies, or startups, or a lot of them, it's not very relationship-led. It's kind of digital platforms where you don't even know who you're really interacting with. So, in many senses you're kind of challenging how crypto looks and how it's done, as well. So, how has it been, kind of working with other people in the crypto industry?  

S: I think one thing that has been most interesting to me is that crypto is perceived as this kind of monolith, you say crypto and you think Bitcoin, and you think the speculative trading side. I'm most keen on the infrastructure play, the plumbing around how do we make payments more efficient so that people don't pay a tax every time that they transact to some third party that is providing, quote unquote, safety. Whereas technology can remove a lot of the stress and cost that every customer bears. We see China, who have set up later in the payments game, having a much more efficient payments infrastructure, just because they've done it slightly later in the day when technology was around with phones, et cetera. 

And, I think, I'm also very keen on the market infrastructure side. For a small business, for example, to bring a product to market, for a security or a fixed income, the cost to bring these are exorbitant in the current way things are constituted. For a small business to raise, the costs are just too high – hundreds of thousands. If you're trying to raise a couple million, it doesn't make sense. Whereas if we can use these new technologies, and this is primarily the blockchain, DLT and I would say maybe less the crypto end, or how it's understood, you can bring these costs down to something that is much more user friendly. 

And you can open up an asset class that we can tap the capital markets for getting money to small businesses, exactly where they need it, where the banks really aren't doing it as much. And I think, these broader infrastructure plays are exactly what we're seeing now, unfolding. It's going to take time. And I think the speculative stuff has been great perhaps for raising public awareness of what this is, but it's also been super dangerous on the policy side.  

It's been very difficult for MPs, or anybody working in government, to get behind something when they see people that are losing money and not doing things in a responsible way. And we're having to slightly de-stress those discussions and say, okay, yes, there is that. That's not us; that's not the people that we associate with on our end of the business.  

J: I think you've hit on something really interesting there. It triggered a thought in me.  

When we think about innovation and doing new things, I think you can kind of look at it in two ways: you can start from the new technology and then say, how can we use this new technology? Or you can start with the client and say, what problem are they facing and how can we apply technology to that? And it sounds like you're in that kind of latter camp. You were starting with what's the problem the client is facing? Is that right?  

S: I mean, I think that's what we're doing. I think people often joked about blockchain, that it's a solution looking for a problem. I think there's tonnes of problems in financial services and I don't think blockchain is the only way to solve them. I think it's a tool in the toolkit. At times it makes sense, at times it doesn't, and it requires a bit of discernment and pragmatism to understand where and why. But I do think it definitely has a place, particularly as we unfold this intersection and the era of convergence that people are talking about, between decentralised finance and big banking. How do we give clients ownership of their data in an appropriate way? 

What open banking is doing, for me, is fascinating, to unlock value for consumers and give them choice. And I think, right now, that's restricted to payments, but what we're trying to say is it doesn't have to just be payments; it could be a much broader source of transactional banking, plus access to money. 

J: So, you've had a very successful last couple of years. What are the plans, what are the objectives over the next 12 months or so?  

S: Yeah, it's been a journey. I think all entrepreneurs have, you have to, kind of, pivot slightly. 

Our big launch is the banking services, and that has been years in the making. We invested millions and we're very excited about that. And what we're trying to do there is proper relationship-based, transactional, commercial banking style services, on an e-money basis. And not many people do this today, if you want to have someone you can call and talk to. 

And why we were so keen to have that is we want to get to know people. If we can understand your business, we can then offer better services. And through that listening process, we've been already running the platform business for some time and have done considerable volume of business. 

But, I think what is going to grow, really and something that I'm keen on is: if we know exactly what clients want, we can then dig around a bit and find better things for them, and kind of scale that. So, the scaling and setting the stage is this year.  

J: And that's kind of launching imminently, Sean. And who's the, kind of, average client? What does the average client look like? What are their needs?  

S: Perhaps unsurprisingly, crypto companies struggle to get access to the payment services. So, if you are building something on the blockchain space and you rock up at a high street bank, you would typically get told no. And it's similar in other kind of sectors, to non-banking financial institutions, e-money firms like us, for example. The fees are generally quite high, and you don't necessarily know who the counterparty is as well. And so our differentiator, we think, is that we will get to know these firms and help them to get a stable pair of hands for their day-to-day banking services. But also then learn about them and their product set, and bring that into our platform business. 

My dream is to get Greengage to be a proper and full market SME bank for small and medium size enterprises. Because I think these are the firms that are struggling the most with current solutions. And crypto companies and digital companies will be our first cohort of clients, and we'll always want them because they're at the cutting edge of technology innovation. 

But, I think, to bring these solutions to SMEs will help to resolve a lot of their problems. We'll also look at high net worth individuals, and a lot of private banks do not like transactional banking accounts. For us, that's a sweet spot . Each of these client segments could be served by what we're offering.  

And, again, we're not gonna be tick-box, so if there's something a bit unusual, we'll look at it. As long as we can add value and make sure it's done right.  

J: It sounds like a fascinating year ahead. Thanks for being on the podcast today, Sean. It's been interesting to hear about your journey, and it sounds like you've got a lot of exciting things in the pipeline. 

And thank you all for listening. You can keep up to date with the latest episodes by following the podcast.  

Thanks, Sean.

S: Thank you.  

J: You've been listening to Above the Parapet, a podcast from Profile. To listen to more interviews with entrepreneurs, go to your favourite podcast platform and search Above the Parapet. If you want to find out more about our services, go to www.welcometoprofile.com.

Thank you for listening. 

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