In January 2015, London-based regulatory reporting and XBRL software company, Arkk Solutions, set up an operation in Belfast, Northern Ireland to create jobs and support their continued growth. Last month, during their 6th birthday, bobsguide caught up with Arkk founder, Richard Metcalfe, to find out what the company has been up to this year and how Arkk is encouraging innovation.
Tell me about Arkk Solutions and what you have been up to this year so far?
Arkk Solutions was established in July 2009 to address the industry need for cheaper and less complicated XBRL reporting solutions in the UK.
Last year was a big growth year for Arkk Solutions in terms of expanding our market. We trebled our customer base, which is made up of medium to large asset management firms and credit institutions that comply with the FCA and other European regulatory requirements, and in order to deal with some of the challenges around upscaling, we moved office into a bigger premises and opened a third office in Belfast.
Since moving some of our back office processes from India to Belfast we have built strategic links with the University of Ulster in order to secure the best candidates as they graduate. When new employees join Arkk they receive a huge training commitment. For example all new graduate employees in the Belfast office are studying with the ACCA, at the end of the three year course they will have qualified at Certified Chartered Accountants. We hope that after the three year course employees choose to stay with our company but we have also created a network of accounting and regulatory firms that they can go and work for if they want to expand their career outside of Arkk.
In terms of technology, we have been focusing on new product development and have been talking to our customer base about what we should be doing next.
How do you encourage an innovative environment within in your company?
When you start a company from scratch you get the opportunity to build a culture which is an immediate advantage. I put a lot of time into staff well-being and making Arkk a great place to work. Because of this we haven’t encountered the political challenges that normally occur when a company grows.
Rather than having my own office, I decided to sit on the company floor with the rest of the employees in order to make myself available to them to pitch ideas to on a daily basis, and the great thing about being in a company where you control the strategy means that we are able to make decisions quickly and can react quickly to market changes and direction.
Either myself or another senior member of staff provide daily lunchtime training sessions which helps to encourage trust and have found that because of this we have very low attrition rates. Each individual member of staff is responsible for their own objectives within the company and also use ‘rocks’ to represent what we want to achieve each quarter and each team is responsible for fulfilling their own individual rocks.
How do you create efficiency and transparency?
When I was in a senior IT position I used to dislike it when an IT vendor would try to force me into a solution that fit their requirements, rather than mine. Because of this, when we sit down with clients, we explain that we use technology that they are familiar with, such as Microsoft Office, to try and solve their issues, and then we build solutions from that way up rather than the other way down. This creates efficiency and because our products can be implemented within a few days, clients are able to get started using them quickly.
In terms of transparency, we use shared technology such as Office 365 to share files etc. We also provide a range of XBRL viewing tools and because it is a standard format for financial reporting, it is in our interest to make sure clients can use the technology that we have implemented. We distribute the majority of our software via cloud now and actively seek customers that are willing to embrace cloud technology and try to educate them on some of the benefits of moving to the cloud.
The main challenge around this area is creating confidence around handling client data. I think that it's going to take a large player to go public with their move to the cloud to start momentum. We are seeing some moves in this area for less business critical applications which is understandable. I'd like to imagine that in 5 year’s time all of our new products are cloud only.
Which regulations are organisations finding particularly hard to comply to?
There are still some legacy issues around the Alternative Investment Fund Managers Directive (AIFMD) which is a growing market for us. Technical standards can often change up to twice a year, which can be taxing for clients and is an area that we can help with.
Solvency II is another regulation that organisations require help with, especially when it comes to Quantitative Reporting Templates (QRT) and the look-through principle embedded in Pillar 3 (reporting and disclosure) of the Solvency II legislation. A lot of larger insurance firms thought that they had Solvency II under control but the elements of the look-through approach was initially overlooked which means it now requires attention.
This year we plan to educate our clients on upcoming regulations such as UCIPF V which is a reporting language due at the end of 2014 and GATCA, which is a global adaption of the Foreign Account Tax Compliance Act (FACTA) that could prove to be challenging.
What are the biggest challenges that companies ask you for your help with?
Clients are now asking us for more structure, audit trails and accountability for staff members using the products that we provide. We are currently working with our initial customer base to devise a more robust end-to-end filling platform that enables us to go deeper into the customer’s data set and means that as the number of requirements that they have to file increases, they are able to file them all through one current platform. We have developed some initial products around this area that we hope to launch at the end of the year after they have been through our customer testing processes.
Regulations are predicted to become stricter and more complex in the future what do you suggest companies should be doing to prepare for the years ahead?
A common theme throughout my career has been how to prepare data to be re-used. This theme of re-using data is especially prevalent for a multi-jurisdiction customers. An example of this is one of our clients’ which needs to file both AIFMD in Europe in around twenty jurisdictions and also has a requirement to file Form PF in the US, and because the data that is used to make these reports is very similar and currently resides within one common system, we must interrogate it to make the reports useable for multiple jurisdictions.
How do you see the regulatory landscape evolving in the future?
I think that firms are going to have to deal with more regulation and in Ireland for example, they are already adhering to stricter regulatory reporting timescales which could also happen to the UK in the future.
I would also like to think that the regulatory landscape in the future could be fully cloud-based because we are currently seeing a generation of companies that are happy to adopt cloud-based software.
What are your plans for the rest of 2015?
Our Belfast office expansion was initially a pilot project that we started in back in January. We now have a team of dozen employees based there which is growing quite quickly and because Ireland seems like a great place to do business, strategically we are looking into how to expand further.
For us it’s all about looking after our customer base and understanding their long-term needs. We invested in more account management functions in the business and we are trying to build up a structure that helps us to retain customers, which is our main goal for the rest of the year.