How do you think businesses have adapted to the introduction of Making Tax Digital and how have you helped in this process?

The biggest challenges for small businesses adjusting to Making Tax Digital (MTD) lie ahead. VAT was the first tax to be filed under the new MTD APIs in April 2019, but VAT-registered businesses have already been doing quarterly online VAT returns for years, so for many the switch to MTD wasn’t noticeable.

The most common accounting systems in the UK are spreadsheets and the shoebox of invoices and receipts. These aren’t fit for purpose in a digital world, so when small businesses, which operate using these methods, need to switch to digital records and do quarterly self-assessment or corporation tax returns, then the impact of change will be more significant.

Fortunately, solutions like Countingup automate the bookkeeping and MTD filing to actually save time and make tax filing less painful.

Following your partnership with Hokodo, how important do you believe partnerships are in banking?

Partnerships are thriving in the banking industry. Just take a look at the public commitments of the winners of the Banking Competition Remedies (BCR) grants for evidence. The BCR grants catalysed a number of innovative collaborations to strengthen winning bids, which were unlikely to have happened otherwise (or would have taken much longer to put in place).

When we started Countingup, we never once considered building out our own AML/KYC checking capability, so we partnered with HooYu. For lending we’ve been working with iwoca, Capital on Tap and Funder Finder to provide loans to our small business customers.

What Countingup does well is provide a business account that does the books, so we’ll stick to that mission. Yet we still want to offer the other financial services a small business may need, such as lending, insurance and invoice factoring. We will continue to partner with the best in class to achieve that.

If you could change one thing about the banking industry, what would it be?

The ability to share information about bad actors with other regulated financial institutions would be invaluable. To that end, Countingup is actively involved in a project led by the FFE (FinTech FinCrime Exchange) which aims to make this a reality. With other fintechs we’re currently exploring the legal requirements associated with this goal as well as the technical requirements to implement it.

Achieving this goal of shared information would improve the onboarding of all participating account service providers. It would reduce the risk of individuals/firms believed to be involved in unlawful activities being inadvertently onboarded.

What advice would you give to anyone looking to get into the banking industry?

Just do it.

I’m probably not the only person to have had the idea to build accounting software directly into a business bank account. I probably wasn’t the first person to have this idea to combine banking and accounting in one place.
I was, however, the first person to just do it. Of course, you need to check you’ve got a good idea before starting. Hustle some meetings with experienced people in the industry or meet some VCs to get feedback. You need people who will give you honest feedback (friends and family are no good as they are likely to be supportive and encouraging, even if your idea is bad). Once you’ve got a good idea that’s been validated, just do it!

How did you get into the industry?

There were two key parts to the process. Finding the suppliers and then getting the funds to deliver on the idea.

I signed up to all the challenger banks to figure out who they were using as suppliers. I did mystery shopping, asking their customer service teams about which company is ultimately doing the KYC or who manufactures the cards. As I found the supplier names, I then emailed and rang them up and I started to get the contracts in place that I needed.

All this would have been futile without any investment to actually pay the suppliers and recruit a team to build the product. Closing an angel round of investment was critical. Fortunately, a VC called Frontline Ventures liked our idea and led a £500,000 round to get our idea off the ground. In just under two years we’ve since raised close to £4m in total, which I think shows that, in the banking industry, money is a barrier to entry. You need plenty of it to get started.

If you didn’t work in finance, what would you be doing?

I’ve built a couple of businesses now, so I definitely have an entrepreneurial streak. I really enjoy my work too and would get bored if I wasn’t creating something.

Among lots of weaknesses, one of my strengths is some stoic, British determination to get the job done. Given that I’m always coming up with ideas, if one of them was a good one and really excited me, I think I’d be building another business.

I’ve got my hands full at Countingup, though. We have a massive vision to be a financial platform for one million small businesses within the next five years.