Brixton Pound: How fintech boosts the local currency agenda

FusionWire, December 2016. 


Brixton Pound: How fintech boosts the local currency agenda

The notes are eye-catching, but South London local currency Brixton Pound is most commonly traded in the form of text messages. We sat down with B£ Communications Manager Marta Owczarek to talk about how technology is furthering the local currency cause.

The Brixton Pound has just turned seven years old, making it one of the most successful local currencies in the world. Maybe you’ve seen the notes – the one with David Bowie is best known – you can get them from the B£ cash machine in Brixton Market, the first ATM of its kind. Or maybe you’ve been to the shop in South London – B£ has just moved to a new location on Atlantic Road, operating a pay-what-you-feel café and community space.  

Walking up to the café through the local market, seemingly every shop or restaurant has a B£ symbol in the window. This is a currency, yes, but more than that it’s a community interest project, says Marta Owczarek, Brixton Pound’s Communications Manager. As we’re sitting down on the hottest day of the summer, Owczarek gives me the breakdown: Brixton Pound is a non-profit organisation employing five people, running a local currency accepted by around 250 businesses. 200 of them also operate the B£ pay-by-text scheme, which has over 2000 registered users. This is what I want to talk to Owczarek about: how technology can help future-proof a local currency that ultimately depends on social goodwill to survive.


The technology behind the current B£ pay-by-text system is simple, and that may well be the key to its success, says Owczarek: “It’s a pay-by-text system that doesn’t need internet. You just need a phone that operates text messages.” She explains that the B£ notes have become a collector’s item, which is good PR but doesn’t actually help the local economy. Because of this, the electronic payment system has been an important tool for getting people to actually spend Brixton Pounds.

People can top up their B£ pay-by-text account at any time with a transfer from their bank accounts, or with cash at one of the dedicated outlets. “Lambeth Council has a payroll scheme for local employees, who can dedicate how many Brixton Pounds they want to receive as part of their salary every month,” says Owczarek. She takes out her phone to show me how the electronic payments work. It’s easy: just type out a text message with the amount and the name of the recipient (a shop or a person), and send it to the B£ phone number. Then each party gets a text message confirming the transaction – that’s it.


The case for local currencies
Brixton Pound is tied to Pound Sterling, meaning this isn’t actually a separate currency – there incentive to use it isn’t financial. But there’s a strong community message attached – it’s a symbol of belonging to Brixton, and wanting to support the local community in an area where rapid gentrification is affecting local businesses’ ability to keep up with rising costs. This means B£ is mostly an independent business thing, but not exclusively; Honest Burgers and Franco Manca are both London restaurant chains that started in Brixton, so they accept B£ at their Brixton outlets as a signal of their dedication to the area.  

But while B£ has a strong social element, this is very much a financial enterprise: “Brixton Pound was set up by a group of local activists who wanted to do something in response to the financial crisis,” says Owczarek. “Many [local] currencies are about alternative banking, or alternative value systems.” Take the café we’re sitting in – people can pay however much they feel is appropriate. “When we at Brixton Pound started to ask questions about money, we were also asking what is value, or what is money in a wider sense,” says Owczarek. “Nobody is going to be using Brixton Pounds for profit. … [But] it really does start conversations. It means people are connected to each other, to their local community, and to their local business community.”

There are significant financial advantages to keeping money local. The New Economics Foundation concluded that spending money in local shops means that cash circulates in the local economy up to three times longer than if it had been spent in a national chain. The think tank also reported that £1 spent with a local shop is worth £1.76 to the local economy, while being worth just 36p if it is spent out of the area.

“We’re in touch with lots of other local currency worldwide and in the UK,” says Owczarek. “In the UK, we were the first to launch in an urban area. The ones that were operational before us, like Totnes, Stroud and Lewes – the initial idea was more about local supply chains, to be able to grow your own food and supply it locally.” Bristol Pounds has been a particularly successful addition to the local currency family, allowing individuals to pay council tax in Bristol Pounds. In comparison, Lambeth Council will accept Business Rate payments in Brixton Pounds, but individuals have to stick to Sterling.



Technology experimentation
Owczarek is eager to point out that local currency is only one aspect of the Brixton Pound. “That’s is how it started, but we’ve now developed other projects.” She tells me about the Brixton Bonus, a lottery with a monthly draw of B£1000 – individuals can’t cash out their B£ so it has to be spent. The surplus of the Brixton Bonus, as well as 1.5% from each pay-by-text transaction, go into the Brixton Fund. This is a micro-grant awarded to organisations whose work fulfils three criteria: it furthers Brixton communities; takes action for social justice; and increases local employment opportunities. “The [second round] was completed in June, and we gave grants to nine local organisations,” says Owczarek, adding she was surprised to get 60 applicants for a grant with such narrow criteria. “We’re trying to have a business focus and community focus at the same time.”

As electronic spending has taken over from cash as the most popular way to pay in Britain, I ask Owczarek if she thinks technology is key to future-proofing the Brixton Pound. The B£ cash machine empties out on a weekly basis, Owczarek points out, suggesting there may be a novelty factor drawing people to the paper money. But there’s no reluctance at Brixton Pound to go high-tech. Just over a year ago, Brixton Pound piloted a contactless payment scheme, but Owczarek says it was unsuccessful: “It was a pioneering scheme, and it didn’t quite … there wasn’t a lot of take-up. People were maybe interested, but not enough to make it work.” Owczarek adds there were some issues around hardware – traders already had one terminal, and weren’t so keen on adding another. “It’s interesting to follow these bigger trends, but what we observe on a smaller scale is often its own thing. Pay-by-text has been incredibly successful, and it really took our currency to another level. It’s the most hassle-free payment option.”

Brixton Pound has also experimented with a payment app, which was closer in function to the current pay-by-text system. This was scuppered by technical problems, preventing the app from working after B£ updated their systems. “We’re looking at developing another version of the app that would work with current system. But I think even with the app, most [electronic] payment was pay-by-text.” One reason for this could be that you don’t need a smartphone to use the old system. I ask Owczarek if she thinks the current pay-by-text system is actually working fine as it is – maybe less is more? But Owczarek won’t go that far – she says it would be very nice to have the money to build a great app that looks professional and runs smoothly. But the B£ motivation is clear: “Our priority isn’t to make Brixton Pound as technologically advanced as possible. Our ambition is to make it work for the local area, and for the local community.”  


How to have better meetings: The case against brainstorming

BL Magazine, November 2016. Original article p76-78.


How to have better meetings: The case against brainstorming

Everyone is prone to groupthink – even the boss. There are better ways for truly getting the best ideas out of people, because true innovation is often borne out of moments of quiet.

If you want your team to solve a problem, lock them in a room with a whiteboard and a pizza and don’t let them out until they have something – that’s the conventional wisdom. Brainstorming remains a go-to method for inspiring new thinking, and it sounds great: by creating a relaxed environment, people can throw ideas around and see what sticks. Except there’s a problem: brainstorming isn’t actually all that effective.

It’s a blow to companies that see themselves as dynamic operations where everyone’s always available, but there’s a myriad of research on this topic that argues for the opposite approach: give people some quiet! And only then, after some alone time, put them together to share their ideas. The problem with brainstorming is groupthink: people tend to fall into behavioural patterns in groups that have more to do with social dynamics than with innovation. It also doesn’t help that we’re drawn to people who sound confident, and there’s no evidence that the loudest person in the room is also the smartest.


The groupthink phenomenon can happen at any level of an organisation, including at the top where you may think people would know better than to fall in line without merit. “In terms of a company board, groupthink means the way disparate ideas are less forthcoming because people start to think of things in the same way,” says Richard Sheath, partner at Independent Audit, the specialist corporate governance consultancy focusing on the effectiveness of boards. “They see things through the same lens, and over time they start thinking in the same way – rather than what they should be doing, which is bringing their different experience and skills to the table.”

This conundrum holds a clue as to why brainstorming, or group decision-making, remains so popular: it makes people feel connected. In her excellent book ‘Quiet: The power of introverts in a world that can’t stop talking’, Susan Cain cites research studies where participants in brainstorming sessions often believe their group performed much better than it actually did. Writes Cain: “Group brainstorming makes people feel attached – a worthy goal as long as we understand that social glue, as opposed to creativity, is the principal benefit.”

Add to this the tendency of some people to do or most of the talking, while others sit quietly, and the appeal of brainstorming meetings to drive innovation starts to lose its lustre. Cain references studies that show how we perceive talkers as smarter than quiet types: “We see talkers as leaders. The more a person talks, the more other group members direct their attention to him, which means that he becomes increasingly powerful as the meeting goes on.”


screen-shot-2016-10-31-at-13-26-59In order to ensure no one railroads a meeting, you have to understand the dynamic of the group and be well prepared, says Ian Churchill, CEO of digital workflow software specialist BigHand. “When you get to know a group of people, you recognise their strengths and weaknesses. You have to make sure you engage the people who have a depth of knowledge, over those who just have a strong view.”

Churchill, who’s in charge of about 150 people, thinks large groups aren’t actually very efficient when it comes to solving problems: “I don’t particularly like big meetings. I think you get more done with four people than with eight.” Gathering a few people means they’ll be strongly motivated to solve a problem, says Churchill – that probably won’t be the case once the numbers grow. “Plus the bigger the group, the more challenges you have with strong personalities.”

Having good ideas is not solely reserved for those with the gift of the gab, so a key task for the person leading a meeting is to encourage participation from people who’re naturally more quiet. “There are some really smart people out there who’re quite shy, or who get intimidated by loud people,” says Mike Thorpe, now a director of the Janders Dean consultancy in Jersey after eight years with Ogier Fiduciary Services.

The most important person in the meeting is the one who’s leading it, says Thorpe, as he recalls how he recently saw ITV newscaster Alastair Stewart moderate an event at the Institute of Directors: “You could tell he has years of experience. He was very authoritative, knowing when to let people talk, and when to shut them up.” The smartest employees are sometimes the quietest ones, says Thorpe – they’re the people who just get on with their work: “Where companies have good moderators, or good leaders who allow them to speak, that’s when you get the most out of them.”


Richard Sheath concurs that effective chairing is key to getting the most out of a meeting. “You need an awareness of what each individual is able to contribute to the discussion, and give them space to do so. This can particularly apply in situations with different nationalities around the table,” says Sheath. He points out how some cultures value assertiveness more than others – the same can also be true for gender. But it’s important not to be dogmatic about how meetings are run, says Sheath: “With time constraints, and a sense of needing to give everyone an opportunity to comment, it can become a bit of a go-around-the-table. … It can become a collection of disconnected comments, rather than a discussion of a particular theme.”

As different personality types have varying approaches to discussions, leaders need to be aware in order to get the best out of people. “Extroverts think out loud and on their feet, they prefer talking to listening, rarely find themselves at a loss for words, and occasionally blurt out things they never meant to say,” writes Susan Cain. “Introverts, in contrast, … listen more than they talk, think before they speak, and often feel as if they express themselves better in writing than in conversation.” Each type bring different strengths: perhaps the best example of how powerful this combination can be is how it took extroverted Steve Jobs working with introverted Steve Wozniak to create Apple.

To maximise the chances of hearing also from the quieter members of staff, it helps to prepare them, says Mike Thorpe: “If you want to get something specific out of a meeting, and you know the person you need to [speak] is a quiet person, you give them a heads up. … Tell them, ‘I’m going to lead you into it.’” Thorpe emphasises the importance of setting an agenda for meetings: why are we doing this? That includes taking a moment to wrap up at the end, and make sure you got what you wanted out the meeting. This is the opposite of brainstorming sessions that end up with pizza-smeared post-its all over the walls, but the research backs it up: the best ideas come when everyone has a chance to contribute, not just the loudmouths.

Leading by example
What happens if the leader is a quiet type too? Ian Churchill is reluctant to describe himself as an introvert – the term is often misunderstood to mean shy, and that isn’t a positive trait for a CEO. But Churchill is more than happy to describe himself as someone who listens: “I recognise I have a set of skills that are different from the other members of the team. … To lead and make decisions you have to assimilate a selection of opinions, and then distill down what is the right way.” This is true for any leader regardless of their personality type, and Churchill thinks the stereotypical ideal of a larger-than-life CEO has started to disappear. “You have to engender respect to become a leader; you have to earn respect rather than demand it. But I don’t think you necessarily have to be charismatic to do so.”


Lawrence Jones, founder and CEO of UKFast

Megabuyte, March 2016. 

Screen Shot 2016-03-04 at 11.36.36The Megabuyte Interview: Lawrence Jones

It’s late in the day by the time I meet Lawrence Jones, and I’m pretty sure our meeting is infringing upon the cocktail hour that’s already well underway at the Baglioni. The Kensington hotel where Jones likes to stay in London is aptly described on Google Maps as “posh lodgings on Hyde Park”, but the CEO of UKFast is casual in jeans and t-shirt. “We’ve just launched eCloud Flex,” says Jones as coffee is served. “It’s a flexible, pay-as-you-go product that I think was missing in our portfolio.”

UKFast provides hosting and data centre services to UK businesses, so when the market wanted pay-as-you-go, that’s what UKFast made. But at its core, UKFast is about relationships: “We offer that Best-of-British service, and I’m very proud about that. … We have a pod system where all our customers get dealt with by the same people, day in and day out. Each pod has four technical people, a couple of experienced managers and account managers, so we’re able to do project management and business development while also being technical and very hands-on.”

Then the caffeine kicks in, or maybe it’s just Jones getting into it, because it very soon becomes clear that Manchester’s own UKFast really isn’t like the other kids. About 250 people work for the company now, a bit more if you include those working in areas like security and building – UKFast builds its own data centres, literally. Jones nods when I call it a “DIY approach” – they build other things too, like desks: “We created a building company within the organisation, so we have plumbers, electricians, critical power directors.” With all these people around, why should Jones buy desks if he could build them? “Our desks change colour depending on the status of the person. If you’re on a conference call, it goes purple. If you need some help, it goes orange. It’s a bit of fun!” He laughs. It’s not just the desks: there’s also the Japanese garden, the auditorium, the bar, the gym (featuring spinning, yoga, and personal training for directors) – the dog kennel’s currently under construction.

The creativity gene
The cost of doing all this in-house is negligible, says Jones, and it saves so much time – not to mention how you can link everything together if you make it yourself. “We’re a technology company and we’re very creative, and I think that needs to come out in everything we do. We wrote our own telephone system, our own software for accounts, our own launch platform. Our eCloud Flex is all open stack, but built on our proprietary software. We design and build everything it in-house.” The importance of this was stressed to Jones a few years ago, when he lost a team member to Facebook, and realised his competitors aren’t in Manchester or London – they’re global. So Jones went to look at how they did it at Google. “I realised nobody has a monopoly on creativity, and actually, creativity doesn’t have to cost an awful lot of money. Creativity is the difference between average and great.”

The UKFast brand of creativity isn’t just for the staff: “We’ve built services [for customers] that you wouldn’t necessarily expect in a hosting provider. We have a clean room with forensic guys dressed in beekeeper outfits to rebuild a hard drive, so if somebody lost their data we can recover it [ourselves].” Ok, I say, but why not just outsource things like that to specialists? Jones won’t hear it – he employs the best people: “Why wouldn’t I? I have 30,000 servers – something’s going to go wrong!” Having watched customers wait days to get their data back, at a steep cost, Jones decided to take the service approach: “Let’s do this in-house, and not charge for it.”

Jones looks for what he calls the “paper round gene” when hiring people at UKFast – that’s the willingness to work hard and do what it takes to succeed. His own metaphorical paper round was at the Chorister School in Durham, where he had a scholarship. Young Lawrence would come home with more money than he had when he started the semester. “My mum went to the maths teacher, asking, ‘What on earth is going on? Is he stealing this money?’” Jones laughs – what he’d do was buy sweets from the other kids at the beginning of term, and sell it back at a premium when they’d run out. “There was always an entrepreneurial side! But it was partly driven by the fact that we were never well off, and my parents always struggled.”

The Jones family business
Jones went back to his native Wales at 13 after his voice broke early – a brutal fate for a choir boy. “I came back to Wales and concentrated on rugby, piano, and cricket. I stayed there till I was 16, when my parents couldn’t afford to keep me in school anymore, and went to Manchester to seek my fortune.” Jones’ piano skills led to founding the Music Design Company, which he sold to Granada in 1997. UKFast was established two years later.

“I was about 30 at the time. I’d gone to New York and was just enjoying life: writing music, doing watercolours in Central Park, playing chess in Washington Square Gardens.” You pay $5 to play there, Jones explains, and he didn’t win much back then. “But I’d probably win now. I’ve spent a lot of time learning chess! … The internet was absolutely booming, and I knew I had to do something with that.” Jones went back to Britain and met “an amazing girl” called Gail, who became the UKFast cofounder and later, his wife. “Gail’s our Commerce Director. She’s an amazing woman. I’m creative and imaginative, she’s organised and straight. What I lack, she has in abundance, and vice versa. We’re the yin and yang. I couldn’t run UKFast without her, wouldn’t want to.”

The inspiration behind UKFast, or rather the frustration, was Jones’ attempt at hosting a website called “I thought, ‘If this is genuinely the service the British are getting, this is what we need to be doing.’ It was so naïve in hindsight, because we didn’t really know anything about technology – I was a musician, Gail was a chemist – and we didn’t have a huge amount of money. But what we did have was a reason and passion. … We’ve passed all our early expectations – I originally wanted to go back to writing music. The idea was to get £1 million saved and I’d build a recording studio, write music and wear scruffy clothes and be Bohemian. But I’ve gone way past that!” Jones did build his recording studio in the end, but the music has given way to another dream: “UKFast is an all-consuming family. Gail has three kids to look after, soon four – I have 250.”

Jones (47) and Gail are parents to Tegan, Poppy and Coco, with a fourth daughter arriving this summer: “I’m trying to get Gail to slow down, but she works really hard. She loves it!” They don’t have a nanny but they have a chef, “otherwise you spend your life cooking”. Date nights are Tuesdays and Fridays, he adds: “Those are our nights together, no matter what.” He recommends it – great discipline in a marriage. Not that they have an embargo on talking about work during those nights: “Oh no, we do. We have the calculators out, those little black books are everywhere” – he points to a pile of notebooks in the chair next to me. “We’ll look at our goals, we’ll be ticking stuff off. It’s non-stop, but it’s who we are.”

Building a nurturing company
Much of the risk in building UKFast has been mitigated by recurring revenues, says Jones. He learned this from his days renting out grand pianos – he had about ten of them, charging £30 a week; “I don’t think I’ve ever really, since then, taken a massive risk.” Of course, Jones is well aware that nothing he’s done would generally be considered cautious. But once he’s done his calculations, it just doesn’t feel like such a risk to him anymore. “What I would say is, never go for broke. Never spend everything you have, because if it doesn’t go to plan – when does anything ever go to plan? Things always take longer, and they always cost more. … If you are flexible with your goals, then you have half a chance.”

The merit of standing on your own two feet was stressed to Jones during the early days of UKFast, after he’d been making hay selling mobile upgrades. “We built the very first bulk text messaging system in Britain, and ended up being the fastest-growing supplier of Orange phones. … It went from nothing to being a massive part of the business.” But then one day UKFast managed to text the entire board of Orange, who loved the bulk texts – until they realised it was external. “They were furious because they hadn’t come up with the idea, and cut us off without warning.” They eventually came back, but it was too late. “My wife and I sat down and asked ourselves, ‘Do we really want to be selling Orange’s network, or do we want to be building our own?’ UKFast wasn’t a mobile network, but it was physical, cables under the ground. We thought, ’We’re small, but at least we’re in charge of our own destiny.’ So we decided we would never re-sell something of that size as a core product … because if they decide to pull the plug, you’re dead.”

Asked how worked out how to manage 250 people after the startup days, Jones cites listening, reading and getting it wrong: “I’ve lost some brilliant people over the years by not understanding how to get them to the next level. But now, we understand. Now we have a good business that nurtures people. And if there’s no room for them to grow, you can advise them to set up another business, and then fund that.” He can be pretty hands-on at times, Jones admits, but his favorite thing to do is find someone talented, hand them something, and watch them develop it. This has led to the UKFast University, a cloud and e-commerce Master’s degree with Manchester Metropolitan University, and an apprenticeship programme with the Dean Trust; Jones feels strongly about giving back to Manchester, the city that took him in. “But when people say, ‘How have you done it? How has Lawrence Jones done it?’ I tell them, ‘It has nothing to do with me. It’s these guys who’ve done it.’”

The ultimate motivation
Jones is refreshingly direct when he talks, and surprisingly open about his life – his blog on is kept fresh with business advice and personal development insights. Most remarkable is the story of the Pic Blanc avalanche in 2001, which almost claimed Jones’ life when he was buried under snow for more than eight minutes. I ask him about it because he’s written about it several times, and it’s only later I learn he doesn’t usually discuss it. But there’s no doubt the experience changed Jones’ life in a profound, enduring way:

“When you’re being suffocated and you’re conscious that you are dying – it doesn’t take very long. You go to sleep pretty quickly. But those few minutes feel like a lifetime. … When you wake up from a situation like that, there’s a lot going through your head. It took me weeks to work out, was I really alive? I was convinced I had died, because I was aware I was dying.” People would come up to him in hospital afterwards, touching his arm for good luck, Jones says, laughing. “But I’ve got goosebumps just thinking about it. When you know you’ve been given a second opportunity, I can wholeheartedly promise you that not a day goes past in my life without trying to make an effort.”

The next effort for UKFast is Secarma, the ethical hacking arm: “Our customers need it. We spent 16 years getting people onto the internet, and we now need to spend the next 16 protecting them.” Jones recently came back from Le Farinet, his hotel in Switzerland, having taken some of his staff skiiing in an effort to cure their back-to-work blues. “All the businesses are complementary, even the hotel. They all work to help and support each other. I’ll never end up owning something like a dog food factory – that wouldn’t make any sense. But I might end up owning a power station.” Maybe a wind farm, I suggest, and Jones counters with hydro-electrics. The UKFast centres already run on green energy actually – it costs extra, but Jones thinks it’s the right thing to do.

Then follows a five minute detour into power grids, and I ask Jones if there’s any topic he can’t get enthused about? He laughs: “People ask me, ‘How can you be so upbeat all the time?’ But listen, life’s difficult and life can throw you some really nasty curveballs. But you can be grateful. Some people say, ‘I have nothing to be grateful for.’ Well, I’m grateful for the air I breathe. When you’ve had it taken away from you – something as simple as just breathing air, walking around Hyde Park this morning. It’s a beautiful, glorious day, looking at the sunshine.”

One day we may all be freelancers

BL Magazine, March/April 2016. Original article p46-48

Screen Shot 2016-03-01 at 15.44.36

Is freelancing the future of work?

It’s a long time since freelancing was just a fancy word for temping – self-employment has become an attractive choice for motivated workers seeing flexibility and opportunity in the brave new world of work.

Do you want to be your own boss? If the answer is yes, you’re not alone – the number of people choosing the freelancing life is soaring. 20% of us will be freelancers by 2020, according to the Office of National Statistics, with the current 16% being the highest since records began. This prediction could actually end up being modest, as the outlook for freelancing is actually higher in the US: Intuit predicts a whopping 40% of US workers will be independent by 2020.

Never before in modern times have we been so willing to go it alone in the world of work. 87% of respondents in a 2015 survey by PeoplePerHour said they would choose self-employment, spurred on by the promise of flexible hours, independence, and potential for increased creativity and work satisfaction. “The upside of freelancing is that people get different opportunities, experience on varied projects, and to meet new people. They also avoid the dreaded appraisal, and get to stay away from office politics,” says Shelley Kendrick, director of Jersey-based recruitment firm Kendrick Rose.

But freelancing isn’t for everyone. “Contractors are usually hired for projects where things can change, and they have to roll with that. They have to hit the ground running, as they’re on a daily rate. And when the work is gone, they have to get another contract,” says Kendrick. Freelancers are also responsible for their own benefits such as sick pay, holiday pay and pensions. Overwhelmingly, the PeoplePerHour study found the main drawback to freelancing to be lack of stability, and fluctuating income.

More freedom in exchange for less security has always been a key tenet of self-employment – that doesn’t explain its recent popularity. There are a number of longterm societal trends at play: the rise of technology, the decline of jobs for life, weaker unions, higher qualifications among young people at a time when it’s harder for graduates to get work – all creating disillusionment with the traditional model. The recession has a lot to answer for: cutbacks and zero-hour contracts meant freelancing became a last resort for some, while others decided to go it alone after being made redundant.

The sum total of all these factors mean businesses now rely more than ever on non-permanent staff. But does that mean freelancing has become more respected? It’s not that long ago it used to be something you did if you couldn’t get a real job. Philip Dodson, founder of London coworking space @WorkHubs, laughs as he admits his mum, who wouldn’t dream of disturbing his brother at the office, often calls him in the middle of the day. “But I do think [freelancing] is starting to be seen as more respectable, and something more people would actually like to be doing,” says Dodson.

@WorkHubs, which caters to independent workers and small businesses, has several tenants who work in tech, but there are plenty of other professions too – there’s even an independent finance director. Older, so-called ‘silver’ freelancers are on the rise, Dodson has observed, but recent graduates make up a significant slice, as they increasingly opt for a career outside the corporate structure.

The ability to hire specialists with fresh ideas to work on projects as and when they’re needed is a key reason why businesses are benefiting from the rise in freelancing, says Jonathan Atkinson, CEO of Jersey-based business consultancy Greenlight: “As organisations compete and innovate, their use of external contractors will increase.” But, he adds, the attitude from businesses who hire them is mixed: “It ranges from resentment, at what people believe to be inflated day rates, to the other end of the spectrum where contractors are recognised for providing impartial advice. Contractors bear the scars of having already achieved what the employer needs elsewhere, and therefore bring with them valuable lessons learned.”

While the inherent lack of stability is a drawback for some, other freelancers revel in it; Atkinson says contract work is popular among people who thrive on change. Running your own operation can certainly mean making more money than working for someone else, but the average freelancer isn’t actually earning that much. In 2014, when the average UK salary was £27,200, PeoplePerHour found that UK freelancers made just shy of £20k. It should be noted the majority or respondents were under 35, but freedom may come at a cost:

“People in the corporate world, tired of working on someone else’s dream, may like the romantic idea of breaking off,” says Dodson of @WorkHubs. But freelancers often end up making less money, Dodson thinks, because they compete on price for the same old work they did as employees: “The best freelancers are those who do something different. That way, they’re not compromising on value.”

Screen Shot 2016-03-01 at 15.44.42But the fact remains that not everyone who works for themselves are entrepreneurs. Some people are self-employed because they have no choice: maybe their profession runs on contract work, or it’s harder to get a salaried position now. People working on laptops in cafés may be the image of freelancing, but the most common self-employment professions are actually construction, taxi-driving, and carpentry. And if the barista at that café is on a zero-hour contract, they are something of a freelancer too – arguably not a happy one.

The emergence of communities like @WorkHubs is a response to the fact that going it alone can be difficult even for the most motivated freelancer. WeWork is a New York-based workspace company that’s now opening its eighth space in London, after arriving in the UK less than two years ago. “I think this is less about ‘going to an office’, [and more about] going to an inspiring environment that breathes energy and vitality into the workday,” says Hillary Deppeler, brand manager at WeWork. Freelancers and small businesses can rent space at WeWork on a month-to-month basis, a valuable feature for growing startups or people with lumpy incomes. WeWork now has over 5300 members in London, says Deppeler: “Our spaces, besides being visually compelling and comfortable, are primarily designed to encourage connectivity amongst our members.”

Though for some people, the ability to work from anywhere is a key draw to self-employment. That’s the case for Alex Flewitt, a digital marketing freelancer on Alderney. “The best thing about moving into freelance work on Alderney is that I can make my own rules. I can be flexible: if I want to work extra and take the following day off, I can. I feel very lucky.” Flewitt started freelancing about six months ago, keen to be her own boss. She’d also been contacted by several potential clients looking for help with marketing or social media, from both the Channel Islands and the UK. “The internet on Alderney is pretty good, meaning I can work very easily without worrying about my location. I have to take occasional trips off island for business, but mostly I work via Skype with my clients.”

The Channel Islands always have to pull talent from far and wide, and that’s no different when looking for freelancers, says Kendrick of Kendrick Rose. She points to the strict residency rules affecting contract workers, meaning just hiring someone on a three-month contract isn’t that cut and dry. “You can get freelancers from the UK and lots of businesses do, but it’s costly: you have the flights and accommodation, plus the higher rates of a contractor,” says Kendrick. But, she acknowledges, having access to more remote freelancers is potentially a positive for the skills gap on the Channel Islands. Atkinson of Greenlight concurs: “For some complex undertakings, the Channel Islands will inevitably have to look to the UK for experience.” The key, adds Atkinson, is to make sure this imported experience is passed on to the company’s full-time employees.

* Permalancing – is it legal?
The dark side of freelancing is when companies take advantage of people’s desire for flexibility to avoid paying benefits. Because is it really freelancing if you work steadily for just one company? British drivers are taking taxi startup Uber to court over this, arguing they are in fact employees and deserve to be treated as such. Their lawyer, Nigel Mackay, told BBC News that Uber is in breach of employment law, because of the way they’re controlling their so-called freelancers. Uber provides initial training, guides to routes, and requirements for minimum hours. Uber could also find itself on the hook for not ensuring drivers take rest breaks, not to mention providing sick pay and other benefits. Uber’s defence? Drivers love the freedom to work when they want.

Screen Shot 2016-03-01 at 15.44.08

Gemma Godfrey: Making a quantum leap

Hedge Magazine, 2015. Original article p62-64.

Screen Shot 2015-11-27 at 15.36.28

Quantum Leap
When Gemma Godfrey realised no one else was going to create the next-generation investment company she wanted to join, she left Brooks Macdonald and started herself.

When you first hear about Gemma Godfrey, you may find yourself wondering how she gets so much done – she’s one of those people who always seem to be doing a million things. Right now, Godfrey is starting her own investment company, advising on boards, appearing on TV, and raising a child – all while tweeting the best, dorkiest fintech memes. But after a couple of hours in Godfrey’s company you won’t be wondering anymore: the woman is so energetic, so in-the-know, and so downright lovely that it seems about right she should be so successful at just 32.

Because who wouldn’t want to hang out with Gemma Godfrey? She’s full of interesting opinions, about life in London, doing your own thing, how tech is changing the world, and the best music to play while getting a sweat on – Godfrey is a keen runner. “It’s just freeing. You can go out, put on some music, you don’t need anything. I love it.” Godfrey likes to run to R&B, pop and hip-hop: “Okay, it’s quite hardcore hip-hop!” She laughs. “I really like boxing too. I’m really not that good though. I need to learn to duck, that’s the next step.”

But really, but if you want to see Godfrey properly on fire, ask her about – that’s her new company. “Oh there is quite a lot to do!” Godfrey left her job as head of investment strategy at Brooks Macdonald at the end of August, meaning she’d only been at it for two weeks when our meeting takes place in mid-September. But the idea of going out on her own has been brewing for a long time. We’re sitting in her office in a freshly painted Soho startup loft, surrounded by digital art and people working at standing desks. Godfrey is in white jeans and subtle gold top, accented by bright orange heels and stylish gold jewellery, just back from this morning’s BBC appearance. Everywhere are wall-to-celing charts and notes, reminding you that is being created before your very eyes.

Screen Shot 2015-11-27 at 15.35.18A next-generation company
Once it’s up and running, will be a wealth management company, or a so-called robo-advisor: an algorithm-based portfolio advice company. You could also call it a fintech startup. The idea, says Godfrey, using both hands to speak now, is to make wealth management more accessible, give people more control over their finances, and make it more affordable. “At the moment, wealth management is really only being offered to a restricted number of people,” says Godfrey, pointing to how IFAs require a minimum lump sum of £50k, and private banks need you to have a cool million. “So how can we offer advice to people who’re earning good money, but don’t have these massive lump sums? The so-called HENRYs: high earners, not rich yet.”

As opposed to the high-risk crowdfunders, will be far less exciting, laughs Godfrey, meant for people who want to see their money working for them. “Oh this is meant to be steady, stable! If you want to diversify a portfolio: a little bit in equites, a little bit in bonds, a little bit in property. … What’s exciting is that now, with technology, you can make it cheaper to provide this service to people. If you can lower the cost of providing this service, then you can open it up to more people.”

Godfrey is planning to launch some time in the spring, although it’s hard to say as it’s still so early: “You’re getting this at the very, very start!” She’s just hired a CTO, and she has some early investors on board as well. “We have a few different partners we’re talking to, in order to get it up and running as quickly as possible.” This won’t be just another investment company though – is a next generation fintech company, aiming to create a smooth user experience for people who’d rather use an app than going in to talk to an advisor. Godfrey doesn’t quite know what the details will look like yet – it’s only been two weeks! – but the idea is clear: “The differentiating factor is providing people access in a user-friendly way. … What we’re trying to do is get people from the point of having limited options, to having investments that help them progress towards financial freedom.”

Screen Shot 2015-11-27 at 15.35.13From physics to finance
Fintech is a hot topic in the London startup scene right now, but for Godfrey, feels like the natural development of a 12-year financial career. “I’ve been working in financial services for all these years, and I’ve been harping on about how we need to provide something that’s more customer-centric! It’s come to a point where I’ve realised that actually, technology is now advanced enough that we can give them that type of service.”

Because until now, Godfrey’s had a quite traditional financial career. Most recently she spent nearly four years as head of investment strategy at Brooks Macdonald, which manages £7 billion across 10 offices. Previously, she chaired the investments committee at Credo Capital, after stints at GAM and Goldman Sachs. She was an advocate for the Alternative Investment Management Assocation for five years, and remains on the board of several organisations. So why is she going out on a limb with, I ask – life must have been pretty comfortable! Godfrey laughs. “The big thing that motivates me,” she says after thinking about it, “is this feeling that you want to have an impact, you want to make a difference. I’ve always felt like that, wanting to work in smaller teams and be able to actually shape something. … I’ve realised I’ve spent the last few years waiting for somebody else to do this, and I thought I would join them! But there aren’t really that many people out there who’re doing this. This is a great opportunity to do it myself.”

Godfrey’s inquisitive streak comes from a place that may comes as a surprise: she focused on quantum physics at university. The roots go even further back though, to North London Collegiate School, where Godfrey can’t praise her physics teacher enough for encouraging her to follow her curious nature. “Science is all about solving problems. Why is the world the way it is? How can we do something about it? That’s applicable to so many things. … Quantum physics is all about challenging preconceptions. When everyone’s coming at it from one angle, let’s look at it differently, let’s take nothing for granted.”

The link from physics to finance is how they both call for creative solutions, says Godfrey, adding how both fields require taking something complicated and finding a way to make it easier to understand. The knack for clear communication around financial topics has led to Godfrey becoming a regular commentator on TV: “That also comes back to wanting to make a difference, and wanting to solve problems, and to communicate things that are complicated in an easier-to-understand way.”

Screen Shot 2015-12-14 at 11.25.01The realtalk advantage
Having her face on TV and in newspapers and magazines for the past seven years has made Godfrey that thing they call an industry thought-leader. This, she admits, helps with getting people to trust you with their money. But Godfrey thinks the financial sector is becoming more open in general: “The industry is realising they need to have more of a voice, as opposed to being a faceless institution. When you can be relatable to your own customer, that builds trust and helps you grow.”

Godfrey is the first to point out that being a good communicator is something you have to learn. In her TEDxWallStreet talk, ‘How to kiss’, she shares how her first TV appearance was something of a dud, and she echoes the same lesson now: “In the beginning, when you’re not quite sure what your view is, you hide behind jargon. It really does leave you vulnerable when you go out there and you say, ‘Look, this is really what I think is going on.’ If you don’t explain it in a really clear way, a lot of people are going to turn around and say they don’t agree with you.”

Ultimately, having different things on your plate means getting lots of interesting ideas to take back to your day job, says Godfrey. “I like variability. It stops you from getting isolated, and makes you think in different ways.” Her friends work across all sorts of industries, says Godfrey, whose husband Wayne is a film producer. He, and two-year-old Dexter, is all over Godfrey’s Instagram, alongside photos of days out, media appearances and inspirational quotes. “I’m surprised at how naturally things have progressed,” says Godfrey, when asked if she expected to be where’s she’s at today. “Even though I’ve always had that entrepreneurial spirit, I’ve liked the security of working in big organisations. What’s surprised me is how this transaction felt so natural! There are so many synergies with other things I’m doing. It’s tapping into so many exciting things that are going on, which are gathering momentum even faster than I expected.” She laughs. “It’s always a roller coaster! I’m excited that I’m here.”

Matthew Hare, CEO and founder of Gigaclear

Megabuyte, 2015. 

Screen Shot 2015-12-04 at 11.07.07The Megabuyte Interview: Matthew Hare, CEO and founder of Gigaclear

Matthew Hare doesn’t actually know exactly how many Gigaclear high-speed fibre broadband networks are live this crisp November day, but it’s no wonder: the number changes so quickly. “We put five networks live last week, so it’s going at fair clip!” In the week following our meeting, another two will go live: one in Croughton, and another in Aynho, the self-styled “apricot village at the boundaries of beautiful Oxfordshire and historic Northamptonshire”.

Village life is at the heart of Gigaclear’s mission to bring speedy, future-proof fibre internet to people and businesses in rural areas. The Gigaclear network in Stanton Harcourt, where Hare lives with his family and two flatcoat retrievers, has been serving the 1100 people who live there since last year. While spending most of his time at the company headquarters in Abingdon, the CEO and founder is in London today, where we’ve met in the lively lobby of the Hoxton Hotel in Holborn. Hare is cheery but on point in a dark suit and open-collared pink shirt, as he explains how rural broadband isn’t just a public service: “Oh it does make good money!”

Gigaclear internet actually costs about the same as you pay in a high-density area like London, but, adds Hare: “It’s an infrastructure investment. What we pitch to our investors is that we build our business one building block at a time. Each build can make money from the get-go, because we pre-sell the network to our customers. We go where there’s actual demand for better broadband.” That means Gigaclear tends to pop up where there are businesses, and a high number of information workers who place the highest value on great internet.

Internet to the people
Gigaclear will pre-sell 20-40% of the network before starting the work, meaning there’s usually significant buzz in the run-up to a project. I ask Hare just how typical is the case study on the company website, where one Andrew of Farmoor admits to having been “somewhat aggressive” at Gigaclear’s town meeting. “Oh yes, we have people who get incredibly passionate about what we’re doing.” Mostly this is in favour of the project, adds Hare, but sometimes people don’t like to wait: the construction takes six to nine months, and sometimes there are delays. Like last week in Cambridgeshire, when it rained heavily and the work had to be suspended for the day, causing frustration among customers – they were only five days out! One of them emailed Hare personally, pleading him to sort it out, but rain is beyond the CEO’s purview, alas. “People feel they own the project,” says Hare, who finds the work rewarding: “There’s massive pent-up demand for better internet.”

More than once, Hare comes back to the fact that he thinks BT’s decision to stick to copper internet, as opposed to fibre, is misguided. But he’s not against government broadband subsidies; 95% of Gigaclear’s networks have been built without any subsidies until now, but next year that number will be more like 65%. That means going to areas they wouldn’t otherwise go, and connecting more homes around the periphery. As a former villager myself I appreciate this, I say, but if people choose to live in the woods, can they reasonably expect to get on the network without paying extra? Hare nods; this isn’t his first time hearing this. This is a government policy question though, he says, but put briefly, getting everyone online reduces the cost of governance. “Our customers use the internet on average ten times more than the average UK internet user. They don’t have ten times as many hours in the day! But they’re finding ever more things to use the internet for.” Because the internet becoming a utility, isn’t it? Hare points out that 100 years ago there were debates about whether it was worth the cost to get everyone on the electricity grid – that seems obvious now.

New technology frontiers
Hare (53) grew up in Hampshire and studied economics at Bristol, where in his last year he was recruited by the precursor to Vodafone. “In 1984 though, it was called Racal-Millicom Operating UK Limited. We launched the first mobile service in the UK in 1985, so it was a pretty cool time to be in mobile.” They weren’t really mobile phones, though: “They were car phones. It looked like a big handbag.” Did he have one? “I had one as a sales trainee! Then when I moved into marketing, I had one in the car. But they weren’t really personal devices like what we have now.”

Another experience of early technology came in 1996, when Hare founded the Community Internet Group after seven years with Kinnevik, the Swedish conglomerate. “I wanted to start my own business, and the internet seemed like a neat idea – a really important change.” But to call it a buzz would be pushing it: “It was really, really early days. Modems cost £130. People didn’t know what to do with the internet. They didn’t use email. It was just the beginning of the commercialisation of the internet.” Was it hard work, developing this technology whose promises took their sweet time to deliver? “Building any business is hard,” says Hare, diplomatically. “You need to find something people are willing to pay for, especially in a new market. It’s not obvious where the money’s going to be, but you still need to be convinced, optimistic, dedicated and ruthless.”

You might think establishing Gigaclear in 2010 would be different, as the internet was a certainly a proven technology by then. But maybe not: “Well, how many other people are investing in rural fibre broadband in the UK?” Hare laughs. “Starting anything that other people aren’t doing is always challenging. There was demand for the internet, but what I’d underestimated was how raising money for an infrastructure business is very different than raising money for a software or services business. Fundamentally, you need a different type of investor.” Hare put his own money into Gigaclear first, and the company is now established enough to attract infrastructure investors, who often prefer backing bigger projects.

Funding the new railways
The funding process hasn’t always been smooth, though. In 2012, Gigaclear had to stop digging because the cash had run out, and it took three months to raise the funds to start up again. “The lesson from that experience is that I need to have more money in the back than I ever thought I needed to have! I have to make sure that even a few weeks’ delay in fundraising doesn’t cause any problems.” Gigaclear has a lot of money in the bank right now, says Hare, but this is capital-intensive work: come February next year, the company will be be putting £2 million worth of infrastructure into the ground every single week.

So far, Gigaclear has raised £48.6 million in equity, and more will be needed over the next five years; Hare is noncommittal as to whether this will come from private or public sources. The company started the IPO process earlier this year, but decided to stop due to the change in market sentiment when Russia invaded Ukraine. This affected everyone, says Hare, “but frankly, the net result was that our proposition wasn’t strong enough. And I wasn’t going to go raise money at a low price, so we went back to [private] investors.”

The job of running Gigaclear today, with nearly 100 people onboard, is different to what it was with six people just 18 months ago. “Then, I did everything: answering phones, doing sales calls, negotiating with contractors. … We still have challenges, but they’re different. My job then was doing and managing, while my job now is managing, setting the tone, and making sure we have the right people in the right place doing the right things. … If you’re going to stay the leader as the company grows, you need to change.”

There’s nothing to suggest Hare enjoys this phase any less than the previous ones: “I love the company. I think the idea is great. What we’re doing is a fabulous thing. … There are 1.5 million properties and businesses that fit our market profile today, but as the demand for internet grows, [this number will rise],” says Hare. As the internet increasingly becomes a vital part of daily life, people want a service that doesn’t depend on how far away you live from the switchbox: “People want reliability – that’s what our market research says – it’s not just about speed,” asserts Hare. “Fundamentally, I believe having fibre everywhere will make as much difference to this country as the railways.”

Tapped in: The cashless tipping point is here

FusionWire, 2015.

Screen Shot 2015-10-22 at 12.37.04Tapped in: The cashless tipping point is here

For the first time, there’s a way to pay even easier than cash. We spoke to MasterCard and the UK Cards Association about how contactless is quickly becoming our favourite way to pay.

If you ask people about contactless payment, you’ll soon find that the thing they want to talk about is the Tube. The Oyster habit, Transport for London’s smartcard ticket that lets you tap in and out, has ensured a smooth transition to using our bank cards or mobile handsets in the same manner. Because getting people to change their behaviour isn’t just about making new technologies available to them – they have to want to use them.

“Contactless payments has been a slow burn for quite a few years in the UK, but in the last few years it’s really started to take off,” says Mike Cowen, European Head of Emerging Payments Products at MasterCard. The surge in contactless payments is far greater than can be explained just by more shops getting the kit to accept it, explains Cowen. This suggests the shift has just as much to do with culture: “We see a lot of people do their first contactless payment with Transport for London. It fits with the behaviours we’ve observed previously: there’s a barrier to overcome to do the first tap. But once they’ve done three or four, they tend to stick with it.”

Because if you’ve tapped in and out of the Tube, why not just tap to pay for a coffee on the way out of the station? It’s taken people a little while to realise how that little wave symbol on their card means they don’t have to use a PIN for small purchases, but there’s been a lot of noise around contactless lately. The arrival of Apple Pay has been particularly helpful, as people are now aware it’s possible to use a mobile handset to pay as well. “These things take on momentum,” says Cowen, explaining how you’ll always have the early adopters who jump in first. “But then you have a big chunk of the population, particularly around payment, who’re cautious around trying something new. But then they see other people doing it and that there’s no problem, and that builds their confidence.”

A method even easier than cash
By 2020, all end-of-sale payment terminals across the EU will be contactless-enabled, MasterCard has declared. This means we’re approaching an age when we may be able to say, for the first time, that there’s a payment method more convenient than cash: one single tap, and no need to make change or to get to an ATM. In the UK, we’re already taking to contactless with gusto: in the first half of the year, £2.5 billion was spent contactlessly – that’s more than we spent the whole of the year before, according to the UK Cards Association.

“The numbers reflect a growing awareness of the technology, and what it has to offer in terms of a really slick consumer experience,” says David Baker, head of the payment innovations unit at the UK Cards Association, the card payments industry trade body. “Contactless wins on speed and convenience, compared to other payment mechanics available at the point of sale.”

In September, the limit on contactless payments rose to £30 in the UK, meaning the spending volumes are likely to increase even more. Baker says the staggered increase in the limit has to do with caution as the industry learns: how the new technology works, and how it’s accepted by the consumer. Other countries, like the US and Australia, already allow higher contactless spending, suggesting we might see the UK limit rise again. Risk control has been another factor in the rollout of contactless, but so far, the system has proven reasonably robust, says Mike Cowen at MasterCard, pointing out that fraud on contactless is one of the lowest of any kinds of payment: “We’re always concerned about fraud, but at the moment, the industry is doing a pretty good job at managing it. That applies in particular to contactless.”

Towards the cashless society
While financial organisations have an economic incentive for driving more payments through electronic channels, there are arguably good reasons why this shift could be a positive factor for society at large. The cost of cash ranges from 0.5% to 1.5% percent of GDP, depending on the country, according to research from MasterCard. Cash-intensive economies are less productive per capita, MasterCard concluded in a 2012 paper, which found a correlation between countries with high cash use and problems like fraud and bribery, not to mention how people often favour cash when they don’t trust their governments.

But even in the UK, where most people use electronic payments, we’re still very fond of notes and coins. 48% of UK money transactions were cash-based last year, according to the Payments Council. (The organisation is now part of Payments UK.) This is the first time electronic payments via cards or transfers have overtaken cash in the UK. The Payments Council said it expects cash volumes to fall by 30% over the next 10 years, as increasing use of contactless and mobile payments are driving the trend.

“Cash has been around for thousands of years, and it’s ingrained in our society,” says David Baker at the UK Cards Association. “Just like the cheque is difficult to get rid of, cash will take a long, long time to disappear. Those over 50 are probably more wedded to cash, but my kids – the millennials – they’re not that bothered by cash, and make payments to their mobile phones quite naturally nowadays. But it’s going to be a generation or two, before we ever reach that truly cashless society.”

Innovations in cashless technology
Only 4.4% of people in the UK go so far to rarely use any cash at all, according to the Payments Council. One reason for this is probably because there are still lots of places that remain cash-only: small shops, certain pubs, car boot sales, the dog walker. The cost of implementing cashless technology can be a significant barrier: “Back when we implemented chip and PIN, there was an enormous cost of upgrading points-of-sale to accept chipped cards,” says Baker. But the move towards contactless has been a lot simpler: “With contactless, only a few years later, the technology was already there: essentially all you had to change was the reader.”

Spending a day without cash is becoming easier now that small retailers are increasingly accepting cards – in the past they’ve often held out due to cost. “There’s been a lot of innovation around that in recent years,” says Mike Cowen at MasterCard. mPOS (mobile point-of-sale) devices have become popular with small businesses; these are typically small, low cost payment terminals which don’t have communication capabilities built into the device itself, but instead connect to a mobile phone. “They tend to be inexpensive, and packaged in such a way that the point of entry is very affordable for small businesses,” says Cowen, explaining how the the cost of accepting card payments depends on the agreement between the retailer and their bank. “Extending the reach of card payment is probably the most critical thing for moving towards a cashless society.”

Both Cowen and Baker consider the rising number of choices when it comes to payment methods to be a good thing, as it increases awareness and boosts competition. “Payments is not a one-size-fits-all world. People have different preferences,” says Cowen. Baker is in shares this sentiment, but believes we’ll eventually see some consolidation: “We’ll probably start to see some of the mobile phone apps converge. As consumers, you don’t want eight different payment mechanics on your device. That’s confusing for you, and for the retailer. … But you need innovation to spark off interest, and get things moving.”

All change: How digital is changing the High Street bank branch

FusionWire, 2015.

Screen Shot 2015-10-22 at 12.36.57All change: How digital is changing the High Street bank branch

Digital banking probably won’t kill off physical bank branches – but the role of branches is certainly changing. We spoke with Nationwide and Handelsbanken about the future of the High Street branch.

Handelsbanken branches aren’t like the other UK High Street bank branches. This is immediately clear as I arrive to visit the bank’s Holborn location: 77 Kingsway has no exterior sign revealing what’s inside. Reassured by the receptionist, I sign the visitors’ log and make my way to the first floor, where branch manager Toni Virtanen comes to the door, alerted by the doorbell. Most customers make appointments before visiting the branch, Virtanen confirms, but they do get some walk-ins, and he’s always happy to show people around.

This branch, covering the area around London’s Holborn, is in a classic office building, but around the country you’ll get all sorts – some branches are even in Victorian houses. The otherness of Handelsbanken’s take on branches continues inside: there are no cashiers here, nor any queues; instead the Holborn branch is fully open-plan with bankers to the left, and a welcoming Scandinavian-style kitchen to the right. This is one of several nods to the Swedish mothership – Handelsbanken is a proud Swedish institution from 1871 – although the UK operations are run as a fully British bank.

If you’re not familiar with Handelsbanken, it’s possibly because they don’t advertise. But those who’ve heard of them will often know they’re lauded as one of the few UK retail banks currently opening branches, as opposed to closing them. Handelsbanken now has about 200 branches in the UK, after three years of having opened about 20 every year. Because as far as Handelsbanken is concerned, reports of the death of the physical bank branch have been greatly exaggerated:

“The industry seems to believe that customers either want digital, or they want physical banking. That, in my experience, isn’t the case at all,” says Virtanen. “People will want the convenience of a good digital offering, but that doesn’t mean customers don’t want to be able to speak to somebody who can make a decision.” In other words, the Handelsbanken app is for when you want to do things like make transfers, but if you lose your card, need a mortgage, get married, or someone has died, you have the branch: “That’s when you want to have a bank that knows you and that you can have a conversation with, as opposed to ending up in a call centre somewhere,” says Virtanen. “I don’t think the digital channel in any way takes away from the type of physical offering we have.”

Back to personal banking
The idea behind the Handelsbanken approach is that the bank branch is far from dying – but its function is changing. The fact that Handelsbanken doesn’t handle cash (they have arrangements with other banks for your occasional piggy bank pay-in needs) is a big hint: these branches are meant to be places for meeting bankers to talk about financial decisions. “Our branches tend to have experienced bankers with the ability to give advice if you want a mortgage, or if you’ve inherited some money and want to have a conversation about what to do with it,” says Virtanen. “The day-to-day payments, that’s very well taken care of by the digital channel. But when making the biggest financial decisions, people tend to want to have a conversation.”

Handelsbanken has carved out a niche for itself in the UK by offering something of a return to the old-school personal banking relationship. Each branch of Handelsbanken operates under the so-called Church Spire principle, meaning its manager has the autonomy to make lending decisions and set pricing, within a set framework. “We believe the manager closest to the customer is the one who best understands the risk. I don’t think somebody sitting in an ivory tower will understand my customer better than I do,” says Virtanen, who tries to meet and speak with all the branch’s customers personally.

“Part of what I love about our small patch is that I can walk across it in about half an hour,” says Virtanen. He points to the map on the wall, outlining the branch’s coverage area: east to west from Charing Cross Road to Farringdon Road, and then north to south from Euston Road to the Embankment. “We had a visitor from Sweden a few months ago. Normally when we have visitors we walk the patch, to show them the area we cover from the top of our Church Spire. That day we bumped into four customers on the way!” Because we might be in the middle of London, but for Handelsbanken, this is still genuinely local banking.

Nationwide’s digital branches
For Nationwide, knowing the face of each customer may be a stretch; as the second-largest provider of mortgages and savings products, the Building Society has a relationship with one in four adults in the UK. But the changing role of the bank branch is very much a hot topic, as Nationwide recently announced plans to invest £500 million into its 700-strong branch network over the next five years. This will mean better customer access through new locations and opening hours, more welcoming branch layout, plus new technology tools:

“We’ve looked at the services we traditionally provide and at how that’s evolving. Clearly, customers’ own technology is increasingly doing the heavy lifting of traditional transactions that were previously processed by people. Talking to both colleagues and customers, [we’ve found there’s] quite clearly a growing need for what we’re calling help, guidance and advice,” says Barnaby Davis, Divisional Director of Group Retail Strategy at Nationwide.

Branch transactions across all banks fell by 6% last year, according to the British Bankers’ Association, as the availability of digital tools mean people don’t walk into their High Street banks to make payments quite as often as they used to anymore. But what people very much still do, says Davis, is drop into branches and ask to speak to advisors about things like mortgages and investments. Often, though, advisors are busy and people are asked to make an appointment or come back later – this is the kind of thing Nationwide wants to fix in its new “help, guidance and advice” approach to branches:

“We’ve been investing heavily in video technology. We’re the first financial organisation to do this at scale, and we’ve just gone live at our 250th site,” says Davis. This means the customer who walks in without an appointment is increasingly likely to be able to speak to an advisor right away, via the high definition video link. The goal is to connect all the branches, so a customer in Barnstaple may speak to an available advisor in Brighton: “You’re fulfilling a need the customer has, which is to talk to somebody instantly.” Asked if this video connection could be made from home too, Davis says this is something they’re looking into, but the branches have better technology: “We want to make sure we create the highest quality experience. … If you’re providing high-quality and ease, the customer very quickly puts the fact that it’s video behind them and relaxes into the dialogue.”

The human element
Nationwide is also working on creating a more informal atmosphere for its in-person branch interactions: “Customers don’t always want to be in the office. They might find it claustrophobic, almost too private. They’re happy to have many of their discussions in a more casual way, on a settee or over a lunch table. It turns into a nice informality, from something that’s previously been very formal. We’re seeing a huge customer reaction to that.”

Because there’s a human element to banking that’s being ignored in the so-called death-of-the-branch dialogue, says Davis: “Nobody talks about the social and ritualistic side of banking. A lot of people equate borrowing money with seeing somebody face-to-face, for reassurance.” Davis cites himself as an example of this: he’s a prolific user of digital banking, but he also has a financial advisor and uses branch services. “Even the tech-savvy digital native often looks for face-to-face advice over important financial matters, and reassurance particularly around affordability and borrowing money.”

The conversation around the future of branches is often pegged as a competition between physical and digital space. But if Handelsbanken and Nationwide are to be believed, the future of the two are intrinsically linked, as each side compliments the other to provide a full service. Davis’ job description as Divisional Director of Group Retail Strategy is a nod to this fact: he’s charged with branch design and branch technology, as well as digital and mobile banking. This is a deliberate mo ve by Nationwide: “The development and transformation of the branch and digital go hand-in-hand. If you separate those [jobs] in two different people, you’re instantly going to get a disconnect,” asserts Davis. “By orchestrating the strategy, and having the ability to improve the development of both branch and digital, we can develop [both] services much more coherently.”

Anne Boden takes flight with Starling Bank

FusionWire, 2015.

Screen Shot 2015-10-22 at 12.36.43Anne Boden takes flight with Starling Bank

At the heart of the new mobile-only Starling Bank is Anne Boden, whose experience and conviction may just be the thing to create a brand new current account.

Anne Boden isn’t starting a bank – she’s starting a revolution. At least that’s how she’ll make you feel after spending an hour in her company, discussing the next-generation Starling Bank in her animated and energetic manner. This is a mobile-only bank, but there’s a lot more to it than that, and Boden will tell you all about it. Or more precisely, the CEO will ask you questions about your bank experience to make you realise that you’re not happy with it, not one bit – you just haven’t been able to articulate it before, because you didn’t realise it could be any other way.

We’re sitting in Starling’s offices, currently found in the duller parts of Clerkenwell behind a door with no sign. The bank is still in startup mode, says Boden, who started Starling in January 2014. They won’t provide details about funding, but right now they’re building their stack and getting a banking licence, with the launch set for next year. But before we get to that, I have to ask – why is Boden doing this? She’s had almost 30 years’ experience in banking, working herself up the ladder in a number of household names before becoming Chief Operating Officer at Allied Irish Bank. Life must have been pretty comfortable?

Boden looks at me for a moment before bursting into laughter, thrilled. “You’re the first to actually ask this!” She thinks for a bit. “Somebody said to me, ‘You’re trying to prove that the current model is broken and it’s possible to do something really different.’ A lot of people have this concept, but I have the execution capability,” asserts Boden. To put this in context she takes me back to the beginning, to after she’d graduated from computer science and chemistry at Swansea and joined Lloyd’s Bank in the early 1980s. “I was in a branch for a couple of months, doing my traineeship. Then I became one of the architects of the CHAPS system. I went to Standard Chartered and was Head of IT and Operations. I became a consultant, I did an MBA, I went front-of-office. I joined UBS and went to Zürich. I went into a big insurance company and started doing lots of work with boards. I went to work for ABN Amro Bank as head of transaction banking for EMEA, and joined RBS [when it] bought ABN Amro. Then the financial crisis happened.”

The reason Boden is telling me all this is partially to illustrate how she has a lot of experience in an industry that’s rich with rules and tradition. But the world changed after the financial crisis, and Boden realised this when she would go and give advice to RBS clients: “I was in a big corporation, running thousands of people and billions in budgets, but [here were these] start-ups, creating huge amounts of customer value for hundreds of thousands. This shocked me! I realised I was learning more from them than they were learning from me.”

New ways of thinking about banking
Boden spent a year talking to people all around the world about what they were doing post-crisis, and what was happening in technology. She joined Allied Irish Bank after their bailout and successfully applied several of the things she’d learned there. “But there were things I couldn’t do. I spent my summer holiday in 2013 going around the world, talking to big banks. And I came to the conclusion that everybody had the same problem: they were moving transactions from branches onto mobiles, but the technology wasn’t coping with how people were using it.” So once Christmas rolled around, Boden had made a decision: the only way to really fix things was to start from scratch. There were three factors making this possible, she says: the regulation for getting a banking licence had changed; people were ready to do much more banking on their phones; and the technology was there to enable it.

But, I ask, did she do this because she wanted to, or did she feel there was genuinely no other way? “All of a sudden, it was as if all these forces were coming together. There was nothing else I could do. I could see the problems big banks had, I could see that technology was enabling it, that the regulations had changed. And I could do it!” She laughs. Other people had the idea too, she adds, but it’s not a simple thing to do: “You have to be able to run a bank, to start a bank. You also need to be creative and have courage. So I thought to myself, ‘I want to do this’.”

Back in the present day, Starling Bank has finished its architecture, its big picture plans, and is working on the “detailed discussions” about functionality. The app exists, confirms Boden, but she hesitates when I ask if I can see it: “We haven’t really shown anybody our app!” She looks at me for a moment, before deciding to show me a little bit. She opens the app on her phone, talking me through the quick sign-up process. She lists a number of things the app can do, many of which are intriguing – but it’s still kept under wraps so let’s just say the app will have lots of links to other parts of your life, to help you plan and organise.

“You shouldn’t be asking people what they want from their banks, because it doesn’t get the right answers. So instead you ask, ‘Would you mind talking about the accounts you have and how you use them?’ […] People are trying to find ways around the system,” says Boden, explaining how people will do things like move cash around to avoid getting stung with fees. “What we’re trying to do, is solve people’s everyday problems with money.” Take how we’re used to being charged when direct debits bounce: “But Google doesn’t charge you when they reject spam. It’s a transaction, so why should you be charged?” She looks at me, clearly knowing what I’m thinking: that this comparison makes sense, yet it’s not at all how we’re used to thinking about banking.

The start-from-scratch advantage
While it’s clear that Starling wants to make technology work for people, rather than the other way around, I still can’t help but wonder: why can’t the existing banks do this? “Okay. You have all these things available in the rest of your life, so why don’t they exist in banks?” The problem, says Boden, is that standard banks are serving multiple customer groups, selling not just current accounts but also savings, loans and mortgages. All these systems are interconnected, and they’ve been consolidated over many years.” So the typical bank will have, say, 30-40,000 different systems,” says Boden, adding how one major bank has 60 systems just for payments.

Replacing all these systems is vastly expensive and time-consuming, explains Boden, with very few banks having taken the plunge. Because the risk is significant: “People expect a banking system to work 24/7, so there’s no tolerance for it not working.” Then there’s the fact that it’s taken half a dozen years for the few banks who’ve dared the transition. “So instead of replacing the system, they keep adding. And it gets worse and worse and worse.”

It’s certainly not impossible for a major bank to solve its technology problem, says Boden: “But it’s much easier to start fresh.” Having no customers to convert is the best as well as the worst thing about that, but Boden doesn’t seem too fazed by the looming task of having to convince people to change their current accounts: “We’re focusing on people who live their lives on their mobile and are focused on getting the best technology in all walks of life.” There’ll be a phone help line, plus an arrangement for that one time a year when you need to pay in a cheque, but Starling isn’t chasing people who want to spend a lot of time in branches. Not to mention that most people don’t go into branches to deal with their current account, says Boden – they do so to deal with other banking products like loans or mortgages. Starling won’t do any of that, partially because Boden doesn’t really think the cross-selling model is viable anymore: “We believe the majority of people are quite self-directed now. In the old model, you sold a current account and then you tried to sell lots of other products. But we think people are a little more sophisticated now, making up their own minds.”

That also means Starling has no need to own its customer data: “We believe the customer’s data is their own, and shouldn’t be used to cross-sell other products.” Bank data and how it should be used is a big topic right now: “But shouldn’t it be all about helping you manage your financial affairs?” This is an interesting point of view, especially as Starling’s app will let people link their bank account to lots of other personal information across the internet. “We’re working on how people can have the convenience of that linkage, but with the security of being a bank.”

Making Starling feel genuinely different is a key motivating force for Boden, who finds there’s no real difference between the existing High Street banks: “But if there was something really inspiring that was different, it would apply to a certain segment of the population. If you can focus on what people really want – that’s the difference.” You can see how this model could potentially become popular with people in the street, but what does her old industry colleagues think of her bold new venture? “Oh, what do they think?” Boden pauses for a moment. “I’d spent the last ten years trying to convince everybody that the current model is sustainable. That we could just carry on, go through the crisis and come out the other side and nothing would change. I came to the conclusion that wasn’t possible. People are changed! People are not tolerant of banks anymore. They’re angry.” Technology and regulation have changed too, she adds, so it’s time to change the banks: “You have to be highly relevant to your customers. Otherwise, you cease to exist.”

The hottest little bank in town is an app called Mondo

FusionWire, 2015.

Screen Shot 2015-10-22 at 12.36.36


The hottest little bank in town is an app called Mondo

We sat down with Tom Blomfield, co-founder and CEO of mobile-only bank Mondo, to talk about banking in the age of a life lived on your smartphone.

Mobile-only bank Mondo is a young company, even in startup terms: Tom Blomfield and his four co-founders have only been at it since February. Intrigued by a few tweets and blog posts hinting at what’s in the works, I asked Blomfield for an interview, and to my surprise he accepted. Because what can there really be to talk about this soon? Is it even possible to build a bank in five months?

The answer to this question is yes – the app is up and running, and the first Mondo debit cards have been issued. But the answer is also no, as Mondo is very much a work in progress: the app changes daily. “We’ve built a core banking system!” says Blomfield. “We have our own service and infrastructure, and the app runs on top.” This do-it-yourself approach means there’s plenty of freedom in building Mondo: this bank can go in any direction dreamt up by Blomfield and his team of merry coders.

The CEO and I are sitting on the roof of White Bear Yard, Passion Capital’s buzzy co-working space in Clerkenwell. Passion provided the “low millions” seed funding for Mondo in April, although Blomfield reckons it will take a couple of years and £15 million to get Mondo fully up and running. “We’re not even perfecting Mondo, we’re still very much building,” says Blomfield. “One thing we really believe in as a company, is being very transparent and close to our customers. We don’t want to go away and hide for two years before saying: ‘Here’s what we’ve built, does anyone like it?’ Instead we’re really open.”

It makes sense: a mobile-only current account bank for the smartphone generation begs an interactive process. “We’re trying to provide a bank account for the kind of people who live their life on their smartphones, and get angry when stuff takes more than five seconds. Like me, basically!” Blomfield laughs. But it’s right on trend: the people used to Uber rocking up within minutes, and same-day deliveries from Amazon, aren’t going to want to queue in a bank branch.

Blomfield opens the Mondo app on his iPhone. “My balance is 300-odd quid,” he says; for now, the Mondo debit cards have to be pre-loaded with cash. “You can see I bought my breakfast at Pret,” he says, as transactions are updated in real time. Blomfield taps it: there’s Pret on a map, and the tag #breakfast. “Or you can use the tag #expenses and then click ‘export’, immediately generating an expense report, with no work.”

There’s more: if you forget to touch out with your Oyster card, Mondo will invite you complete the journey on TfL’s website and avoid the fine. If your electricity bill is higher than usual, the app will invite you to investigate with a call to customer services. You can cash in your loyalty points right there in the app – the examples go on. “You start with all the basic data: what you spend, where, with which merchant. Then you move on to insights, some sort of learning. But the third step no one has got to, is action. Because we’re building a full bank, we can actually let people take action. That’s where the internet is really going.”

Blomfield’s enthusiasm for Mondo is infectious. I eye the app jealously: my bank’s app doesn’t do any of this stuff. A mobile-only bank was bound to be fun, with features like adding emoji to transaction fields, but this looks like it could actually be really useful. This bank would be less a walled garden, and more a financial hub with direct ties to the rest of your life. It turns out my reaction is pretty normal to seeing the app: “It’s often: ‘When can I have it!’” Blomfield laughs.

The banking community is starting to be won over too, now that Blomfield has a working app to show them: “Before we had the app, the reaction was very much things like: ‘Current account banking is just a commodity!’ ‘No one will switch accounts, it’s not interesting!’ And then we showed them the app and now the reaction is: ‘Oh s**t.’” Blomfield laughs again. But the reaction demonstrates the radical nature of the Mondo proposition, as a current account has always been a static place. “We’ve put a whole level of intelligence on top of it. And they say: ‘Oh my god. This is what people have been talking about for 15 years.’”

So if this idea has been knocking about for a decade, how come it’s not been done? This is a complicated issue, says Blomfield, whose team of co-founders include alumni from Allied Irish Bank and ABN Amro UK. There’s no shortage of innovation teams at the established financial groups, and they’ll come up with crazier things than Mondo: “But they are structurally unable to deliver it.” One reason is cultural: “[Established banks] don’t have a culture of regularly building and shipping features.” Then there’s the fact that many banks operate with off-the-shelf software, which, argues Blomfield, provides limited abilities for customisation. “Then there’s the old legacy banks out there who have decades of accumulated technical debt. Their systems are like Frankenstein’s Monster! … We’re different because we have a team of engineers sitting downstairs who actually write code, every day.”

Mondo is currently halfway through its banking licence application. The hope is to have a license with restrictions in about six months’ time, and a full launch sometime after that, probably in about a year. “But we have a working system, and we’re going to roll out debit cards to a few thousand people this summer. It will be based on our technology, but in the short term we’ll be partnering with another bank to provide the license.”

If all this sounds ambitious, it’s worth noting this isn’t Blomfield’s first time at the rodeo. The 29-year-old started and sold his first company, Boso, while reading law at Oxford. He then grew his second financial startup, GoCardless, to a company processing $200 million low-cost direct debit transactions annually. So what’s it like, doing this again with the added experience?

“It lets you be more ambitious,” says Blomfield, referring to how he worked with Passion Capital for several years at GoCardless. This meant his bold plans to launch a brand new bank were actually given the time of day: “Instead of saying: ‘Get the hell out!’, they said: ‘Okay, that’s interesting. Tell us more.’ … It feels like a step up in terms of ambition. It feels like this is the big one.”

He has a point: after starting a bank, how can you top that? “I can see myself spending a good proportion of my life on this, if it goes well. But it feels like this has been a long time coming: banking is so fundamentally broken. It hasn’t changed in 30, 40 years.” There are potential problems ahead for Mondo of course, but not the ones “traditional” bankers see: “The technology and licensing are serious undertakings, but they are pretty well known. Making something people really want is the biggest challenge, for any start-up,” says Blomfield. “You only really know by getting [the product] into their hands and seeing their reaction.” And Mondo won’t be for everyone: lots of people like having a branch. But this isn’t for them: “This is a bank for people who live their lives on their phones and hate waiting for anything. And if that means only addressing a third of the population, that’s fine: that a lot of people!”

That could actually end up proving a conservative target market for Mondo, judging from figures from the British Bankers’ Association: mobile banking has eclipsed not just branch-based banking, but also web banking, this year. Having said that, there’s no doubt that Blomfield is fully aware of the blue-sky potential for Mondo: “I think banks have an extinction event on their horizon. I want to be building the kind of company that replaces them!” He laughs again, but you can tell he’s serious. “I love technology. I love the way it can just make everyday life much, much better. … Sometimes it feels like we’re living in science fiction. It’s incredibly exciting.”