From XU Magazine, 
Issue 37

Checking in with Firmcheck

Plus a conversation with Kevin Lord, their General Manager of the UK

This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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XU: Can you share the origins of Firmcheck, its journey so far and how things are going in the UK market since the launch 6 weeks ago?

FC: Firmcheck was born in the misty mountains of Wellington, New Zealand, from a company called Connectworks. We created a software product to solve the pain points of company secretarial and trust management activities for Accounting and Law firms in New Zealand. This proved to be a successful company for the last 8 years.

Over the last 3 years, our customers started to ask for a solution to manage their AML requirements. We built this into the Connectworks product, and it is currently being used today. Hamish Edwards, a co-founder of Xero and an integral part of Connectworks, wanted to see if our product would solve the pain points of different geographical markets outside New Zealand. From that moment, we initiated intensive research focusing on the UK. We quickly found that most accounting firms were satisfied with their company secretarial needs, but they were screaming out for an AML solution that tried to cover the full spectrum of activities a firm needs to do to be compliant.

Over the last 12 months specifically, the team in New Zealand put a lot of sweat and tears into creating a product we believed would be the leading AML solution in the UK. We were lucky that our New Zealand AML product was already comprehensive, but we wanted to launch from a strong foundation. We listened to the accounting firms, talked to bodies and institutions, and created a space where we feel we take care of the stress and pain of AML for firms today — from education to software.

And we’re only just beginning. We launched at Accountex Manchester, and the response to our brand and product has exceeded expectations. As Xero did in the early days, we will continue to listen and develop to the needs of the market — which is exactly what we’re doing with our Firmcheck customers today. We’re looking forward to the journey ahead, building a comprehensive, yet simple AML management system alongside our customers.

XU: Firmcheck is a product that has come out of NZ, and you’ve done a lot of research in a number of markets, are there any specific challenges or themes that have emerged during your journey?

FC: As we just touched on, AML compliance is just generally a challenge for firms. It’s not a value add, it takes time, it adds complexity, but it's just something you have to do.

No matter how big or small the firm was that we spoke to during our research, there was a common theme that kept cropping up:

“AML is a necessary evil and it keeps me up at night.”

Solo practices, to top 50 firms all shared similar issues with AML compliance – firm size just made the complexity of those challenges much higher.

When you hear that sort of consistent sentiment from your research, it is pretty clear that whatever processes, tools, education or solutions that are out in the market today are not fully solving the functional and emotional needs in this space. This gave us the confidence to commit all our resources to building an AML management system for the UK, and the response we’ve had to our launch has aligned with the research.

What has been clear throughout our research and in launching into the UK market is that the maturity gap between practices is expansive – you’ve got some firms out there who are managing AML really well, and in some cases doing more than “just meeting their compliance requirements”, whereas you’ve got others who have little idea other than they know they need to do something, but aren’t sure what.

That’s one insight that is driving us here at Firmcheck – we want to close that gap and make sure the accounting industry has a much better basic level of understanding when it comes to AML compliance.

XU: Addressing AML compliance is essentially what Firmcheck is all about. Can you elaborate on how the platform assists clients in managing AML through the client lifecycle, for both new and existing clients?

FC: We are an AML management system — so we aim to assist you in being compliant across the key pillars of your firm's requirements. To keep it light here, this can be categorised across three areas: Managing your clients, your firm, and your personal development.

  • Our system gives firms accessible and engaging education courses to ensure you stay on top of your annual AML training requirements for CPD.
  • We provide user-friendly software to manage your new and existing clients AML needs.
  • What this means is that everything is kept in one place, including documentation, ID verifications and determinations, meaning you have a complete digital “paper” trail for when you need it.
  • And, we provide firm-wide risk assessment templates.

The goal of Firmcheck is to make sure you have the tools you need to meet your AML requirements with ease, speed, and efficiency. We also try to do this in an affordable commercial model, as we know firms don’t want to spend their budget in these areas.

XU: How does Firmcheck provide assurance to users that they are meeting AML compliance obligations effectively? Are there any unique features or strategies that distinguish Firmcheck in this regard?

FC: Today, there’s a wide variation in how firms manage AML.

Unfortunately there is a perception that simply running an ID check and documenting that outcome is enough to stay compliant, which we know isn’t true. We’ve engaged with the UK bodies who share the same frustration.

To answer your question, we stay unique and distinguished and focus purely on the things you need to be compliant and try to put that all into one offering — so you can stop worrying if there are any gaps in your AML process.

We don’t do the work for you, we’re very clear on that, and nor do the institutions want us to, but we make the work that you need to do easy to follow and manageable. And that’s why you’ll see us continuing to work with experts to create educational content, actively sharing insights on LinkedIn, and consistently producing easy-to-digest articles on our blog.

Keeping this simple philosophy seems to be working for us right now.

XU: In terms of technology and innovation, how does Firmcheck stay ahead in the industry? Are there any upcoming features or enhancements that users can anticipate?

FC: Oh, we have a lot of ideas for how we want to evolve alongside the accounting industry – but the main thing we want to do over the next 12 months is to keep our ears to the ground, listening to the firm's needs, keep close to the pulse of any new regulations, and ensure that our customers have what they need to feel confident in their AML process. This is a political answer, but this is how we have succeeded today and will continue this method into the future. So, I can’t share those ideas/details until we confirm them with our customer's needs.

XU: The growth in cloud apps has created other challenges around data security and compliance - which we know are paramount in the financial industry. What measure does Firmcheck take to maintain integrity when it comes to security and complaince?

FC: The joys of being a startup within a mature software company are that we’ve gone through these elements throughout our 10-year existence.

We’ve stayed on top of all GDPR requirements and built strong infrastructures and operational processes to maintain a stable and secure platform in Connectworks. It was easy enough for us to move these principles into Firmcheck.

Our Chief Technology Officer and Chief Operating Officer lead in this space. And with some Xero expats onboard, we have all the experience we need to deliver the latest technologies to ensure we can still develop features at a quick speed into the market without impacting our stability.

XU: And, given the dynamic regulatory landscape, how does Firmcheck adapt its services to ensure clients remain compliant with evolving AML regulations?

FC: You might hear us say this a lot, but a key component to our success is staying on top of this evolving landscape.

A lot of work goes on behind the scenes to do this correctly, from building the right internal practises, having an agile development mindset, hiring the right people who are passionate about solving these pain points, working alongside the institutional bodies, and connecting with the AML experts within the industry.

Laws and legislation will continue to evolve, and you can’t not stay on top of that – where we know we can add value is by helping accounting firms understand the ‘why’ behind that – there isn’t enough of that explaining happening right now.

We will continue to work hard in this area as we believe this is needed to help accountants today and tomorrow.  

XU: You’re obviously early on in the journey, but do you have any success stories from Firmcheck customers so far?

FC: Yep, for sure. Outside the unexpected number of people who are now our customers within such a short time, here are a few snippets for your readers. Our free AML education has been incredibly well received, with comments like “I wish I had this last year, as it would have saved my firm a lot of cash” to “This is the least boring AML course I’ve done”, which we have taken as a compliment.

Our software has been talked about in a few social forums recently, which has also bought a smile to our faces:

"Firmcheck is really impressive. Signed up earlier in the week."

We want to stress that a key part of creating more AML success stories is by working hand in hand with our firms, which has an education component at it’s heart, if customers win, we win, and if we remember why we do AML compliance in the first place which is to reduce financial crime, the world wins.

XU: Looking ahead, what can we expect from Firmcheck in terms of growth, new features, or expansions into additional markets? What is the company's vision for the future?

FC: We launched with a product we believe is the leading AML management solution in the UK.

Our plans over the next 12 months are twofold: do our best to educate the market about their AML requirements (in turn growing the overall AML maturity amongst the accounting industry), and continue to build features alongside the industry needs.

If you haven’t gathered already, our vision is echoed in our previous answers – staying close to the pulse of the industry is how we will continue to evolve, not building things to become a system of complexity, instead building features that reduce the pain points, and doing it in a creative, smart, intuitive way.

We are not a traditional software product; we must comply with the regulations. Making sure we help our customers do this as efficiently and effectively as possible is an excellent north star for us.

XU: Let’s talk a bit about the team – what strategies and values drive the company's approach to team building and leadership, and what makes you confident you’ve got the right ingredients for growth?

FC: If one of your readers hasn’t met us yet, I hope they can resonate with the sentiment we’ll share in this answer.

We are a human-centric company.

This word can be misused in technology companies today, so we’ll try to give some details to show we mean it at Firmcheck.

We work hard in this area, as we have a lot of experience growing successful software products within this company. And the key ingredient for us all has been motivated, caring, collaborative people with a self-improvement mindset. Having these pillars within your team gives you an excellent foundation for success. You must implement systems and processes from there to align with your strategy and people's skills. These things are very contextual, and we do our best not to use templates or copy/paste methodologies. We adapt them to the context we are in.

An example is moving from a mature software company like Connectwork to sprinting back into a startup mode for Firmcheck. This takes a culture shift, requires a lot of communication, and restructuring teams — doing our best to give people clarity, alignment and focus. It’s not easy to do, but when you have the right foundation with your team, these things can be achieved.

Finally, to stay aligned with the self-development point, the company itself needs to partake in this. So, we’re always listening to our team and how we can improve each week using tools like Officevibe — which hopefully results, from the outside view, in an excellent customer experience.

In conversation with Kevin Lord, General Manager of Firmcheck in the UK

XU: What motivated you to join the Firmcheck team?

KL: From my first interaction with the Firmcheck team, I could feel the sense of pride they had with working with one another. There is a culture in place of autonomy, self-improvement and working towards a common goal that I found irresistible.

Our Executive Chairman, Hamish Edwards, recently gave incredible advice to a group of accountants in that they should “treat their practice as their number one client and by doing so, your clients will get the best service from you”

That is very much the Firmcheck way - we try to create an exciting, challenging, enjoyable and supportive environment for each other first and foremost. In return, it will result in a high quality product and service for our customers. There is proven experience and success in this industry within the team so I’m delighted to play my part in that.

XU: You clearly have a lot of passion for Firmcheck, what’s the motivation for trying to change the shape of AML in the accounting industry?

KL: AML in the accounting industry has been seen as a “necessary evil”: a legal obligation that, for most, is a pain in the backside to do. We are also seeing a HUGE inconsistency in what accountants think AML entails and what their obligations are.

Financial crime is on the increase and as legislation tightens, the role of accountants in tackling AML becomes even more important - society as a whole suffers from an increase in financial crime and accountants, with their forensic knowlege of the client’s businesses, can play a fundamental part in stopping this.

Call me bold, but we will be the the leading voice for the accounting profession in all things AML, through:

  • Educating the industry on what their AML obligations are and how to meet them effectively,
  • And, shifting the task of AML from a time consuming necessarily evil to one that, not only helps you meet your personal and professional obligations, but creates value in your practice through other means.

XU: No doubt since you launched the product at Accountex in Manchester you’ve spoken to lots of potential customers, and we’ve seen the popularity of AML softwares grow, any insights from those conversations as to why the time is now for AML compliance software?

KL: The accounting industry as a whole is suffering from an increase in demand and a decrease in resources to meet these demands. Plugging a lot of these gaps are the dedicated practice software you are starting to see spring up.

As financial crimes increase and regulations tighten, the accounting bodies are reacting appropriately and are increasing the amount of AML audits/reviews being carried out each year.

So the initial emotions I am experiencing from accountants around their current AML processes are shame and fear.

Shame in that the practice has not prioritised AML, has let those processes slip and perhaps not treated it like a legal obligation; and fear in that they have no idea where to start in order to get this important issue fixed.

In my early conversations, there is an overwhelming gap in knowledge when it comes to what is required to be compliant and then how to put systems and processes in place which leaves accountants with a feeling of dread of any audit. With an increasing number of fines being handed out, it’s rising to the top in terms of importance, as no one wants to see their reputation damaged.

XU: What do you believe sets Firmcheck apart from the rest of the pack, and where are things heading in the future? Any spoilers?

KL: We want to make AML a valuable part of your accounting practice. What that looks like is having a slick, professional journey in place for new and existing clients, combined with a systemised process that protects you and your clients business – put that all in one place and you’ve already started to streamline your AML processes.

We intend to be the authoritative voice for accountants when it comes to their AML obligations.

So building relationships with the regulatory bodies and legislators will be vital but also providing more stories on the reasons why AML is important, and examples of how good AML process has contributed to a more positive society overall.

In the future? Even now there is a huge amount of products and services (banking, finance, insurance, to name a few) that businesses use via their accountants - almost all require AML/KYC checks. I can see Firmcheck playing a huge role in streamlining usage of these products and services via your business….ultimately enhancing the client/accountant relationships.

XU: Is there something we should keep an eye out for over the next 6 months, that you’re really excited about?

KL: We will be expanding our presence in the UK which will help double down on our ability to really listen to accountants and their pain points around AML.

As our reputation grows, we are excited about influencing not only the AML space, but the practice tech space in general.

We’ve got a number of exciting webinars in the pipeline ranging from tech stack decisions, to dedicated AML compliance talks with industry leaders – add to that a really exciting event coming early next year (I don’t want to give too much away) there is some really great stuff happening.On the product front, it’s all about having our eyes and ears to the ground – so maybe you’ve got something you need in an AML management tool, and you’d like to share that with us? Maybe that’ll be the most exciting thing to keep an eye on in the next 6 months.

P.S. you can always keep on top of what’s coming by giving us a follow on LinkedIn.

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