Why risky business can be a big opportunity
RiskSmart wants to help SMBs wise up about the hazards in their path
When Ryan Swann was telling me all about his risk management startup RiskSmart recently, one point stood out to me.
He explained how, beyond complying with laws and making sure you don’t get sued, risk management can also be about managing and understanding the opportunities and tolerances for failure your business has - and thus how fast you can move forward.
As PreSeed Now matures as a business (more on that soon!), the importance of having a full understanding of what’s possible really hit home with me.
You can get the full story about the startup below. As usual, PreSeed Now members get the full story.
RiskSmart offers easy risk management with smaller teams in mind
Running a company is a risky business. Is your data secure? Is that incoming invoice fraudulent? Are your staff properly trained? Are you sure you’re complying with all the laws and regulations you should be?
For small and medium-sized businesses, this is particularly an issue, as they don’t necessarily have the resources to manage all that risk effectively. Stepping in to help them is RiskSmart.
“Risk and compliance teams have been underserved for several years,” says Manchester-based RiskSmart founder Ryan Swann. “Marketing has HubSpot, finance teams have Xero, and the risk teams have been on spreadsheets, with siloed information, bogged down in manual processes.
“When we went out in industry to find solutions, we found that current platforms out there were aimed at large corporates, and were complicated and really expensive. There was nothing there for small and mid-sized firms and teams to help get them on the same level. So that's what we're building.”
Getting smart about risk
The RiskSmart platform allows teams to build a dashboard that monitors different types of risk. These could include things like employee attrition rate, or financial liquidity.
For highly-regulated sectors where companies already have compliance monitoring spreadsheets, that data can be fed into the platform to make it easier to track.
RiskSmart then alerts the relevant people if a particular metric goes out of safe bounds, so it can be addressed quickly.
“It's about decision making,” says Swann. “It’s about understanding what might harm or impact your business or organisation, and putting controls in place to hopefully stop that happening. And if it does happen, taking steps to understand that and make sure that it's resilient going forward.”
Swann is clear that risk is an inherent part of business. He argues that sometimes it’s good to understand how much risk you can take because as long as it’s monitored, more risk can equal more opportunity.
“Risk is often seen as a negative word. But risk is just about making decisions; having that information so that you're informed, so that when you do go forward, you know the consequences of doing so.
“You can understand where you might have been a little bit too protective in certain areas and you can take a little bit more risk, and therefore either generate more revenue or go into new markets or expand your workforce, if that's where you need to go.”
Swann is a lawyer by trade, and in recent years specialisd in compliance and risk management. As the field began to become more data focused, he noticed that a clunky collection of spreadsheets was often the best solution for small and medium-sized companies.
“If you were a multinational bank with a risk team of 100, there were some brilliant systems out there. But they were ridiculously expensive and complex and took six or eight months to get in place.”
Spotting an opportunity, RiskSmart was born.
After a year or so of building the product, RiskSmart will officially launch into the market in the coming weeks. In the meantime, Swann says they’ve been testing the platform with 10 businesses and have more onboarding at present.
The aim is to sign up 50 customers this year, with the startup targeting regulated sectors like financial services, legal services, accountancy, and energy.
Swann says target customers usually have a headcount of up to 1,500 and a risk team of up to 10. But there are opportunities with larger companies, too.
“There are some large customers where their risk team is maybe not as big as you would expect, and they might have a part of their business that's regulated. They might be turning over 2 or 3 billion pounds a year, but they’re still on a journey to embed risk within their company and need something that is really simple and intuitive.
“It’s more about the size of team, or maturity, than about it being specifically about the size of the business.”
Within five years, Swann wants RiskSmart to be used globally and have thousands of companies signed up. To help them achieve that, they’re exploring partnerships with the likes of the big tech consultancy companies and payments providers.
And just like Xero doesn’t do everything for accountants and bookkeepers but instead integrates with third party software to become more useful, Swann says RiskSmart wants to take a similar approach.
“We want to create best-in-class partnerships with all the regtech providers. Whether it's someone doing legal contract management, whether it's someone doing regulated horizon scanning, or policy management… we want to plug in with those providers to create an ecosystem where our customers can come to us for what we do, but we're also connected with those other providers.”
Investment, competition, and challenges
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