At Usable Balance, we’re not a payments company. We’re an automated accounting product for small businesses. But we realised early on that direct bank connectivity was crucial. As Jason explained, we have to think beyond the immediate future. It’s not about the payment solutions we have today; it’s about enabling what the next generation will want to do.

To get there, we need to build the underlying infrastructure first. We need solid rails to build the innovative solutions of the future on top of. That’s the real opportunity with open banking in New Zealand.

“This is something we've been talking with people a bit about, around how banks need to have these rails in place because that allows people to build innovative solutions on top of it.”

The great fee debate

It’s brewing in the US over whether banks should be able to charge for access to financial data. Jason’s take? Making everything absolutely free is a risk. It incentivises banks to do the bare minimum required by regulation, and that’s not what anyone who wants a thriving ecosystem should want. A middle ground is needed.

For commercial use cases, paying for access makes sense. It recognises the value of the service and feeds back into the ecosystem. But we also must ensure we’re not excluding non-profits, charities, and people building financial literacy tools. There should be a way for them to have fee-free access. It’s a balancing act between creating a viable ecosystem and preventing innovation from being stifled.

Changing the way to allow others to access your bank accounts

There’s a lot of excitement around decoupled flows for logging in and allowing organisations access to your banking payments and account information, and the tech is undeniably cool. But Jason played devil’s advocate, pointing out two potential issues:

1. It’s a new thing. New user flows can be confusing for customers, creating a risk of spoofing and scams. Banks need to be on the front foot with educating their customers on what a legitimate decoupled flow looks and feels like.

2. It’s not for everyone. Decoupled flows are great for consumers and small businesses who have a mobile banking app. But what about Steve in accounts at Air New Zealand? He’s probably not using a mobile app for his work. We must build an ecosystem that scales and is just as useful for enterprise as it is for consumers.

"If what you're trying to do is build an ecosystem that scales... that's gonna be as useful for enterprise as it is for consumers and small businesses, um, that we need to be thinking about these use cases and making sure we don't lose them."

Eat your own dog food

When asked what one change he’d make to open banking in Aotearoa, Jason’s answer was simple: he wants to see banks consuming their own APIs.

It’s the ‘eat your own dog food’ principle. If a bank builds something for its own internal use, it’s going to be well-architected and enterprise-ready. If they’re just building to meet a compliance standard for a consumer model, it’s going to be more limited. When banks start using their own and each other’s APIs, they’ll see what works and what doesn’t. They’ll see the friction points and be incentivised to improve. This is how we’ll get a better system for everybody.

A continuous process of improving things

Open banking is not a "one and done" project. We aren't building a static ecosystem. It's a continuous process of improving, fixing problems, and developing new standards. This requires dedicated resources from the banks and ongoing engagement from the entire industry.

The API standards we have now were developed five years ago. The conversation has changed since then, and it will keep changing. That’s why industry engagement is so vital. It’s still early days, and the goal isn't perfection on day one. The goal is to build something that is commercially viable and genuinely helps people and businesses throughout New Zealand.

You can listen the full podcast here:

We often get asked, how did you get the usablebalance.com domain?

As my first post alluded to, we started back in 2019 with Simple Balance. That was the concept, simple balance, all you need.

Simple, yet Available.

But then I got obsessed with the Simple Balance being incorporated into Internet Banking. There are two balances if you’ve ever paid attention - Available Balance and Current Balance.

For those who didn’t know the difference:

• Current Balance was the current funds in your account at that point in time, including pending transactions like pending transactions on a debit card, cheques waiting to clear. So not actually what you have, but kind of an indicator.

• Available Balance was the funds available to you right now, that had cleared and were absolutely yours. The kind that small business owners like, they can touch and feel.

Well, that was my dream, Simple Balance should be the Available Balance for small business bank accounts.

So the first pitch deck was made, with internet banking in mind, your own business’s Available Balance.

But, it was very apparent, very quickly, that this was not going to be possible to be positioned first with banks. Not because banks can’t be innovative, but because people needed to trust what this Available Balance was, how it worked, and what was behind it. It was a simple concept, but required a LOT of trust behind it to be adopted by banking users.

That’s when we focused on building a brand name of something that wasn’t necessarily related to banking terminology, but could be plugged in later on.

What’s Available?

We then did what any good founders do, we trawled through our trusted domain name registers to see what’s available. We wanted, no, needed a .com.

Conversations from back in 13th January 2023

Then Jason suggested usablebalance.com. And like any crappy co-founder does, I completely ignored his suggestion, and went on to suggest much higher quality names like kushy.com

But Jason took away my shiny things and was persistent, then re-quoted his suggestion again to me. Thank god he did, because we could have ended up landing with a gen-z level spelling of our product name (whatstheguap.com) just to get an available .com domain.

We slept on it, for almost two weeks. But then Jason did “the pitch”, and won me over. This ended up being one of our most fortuitous (I am using this big word to impress Jason) decisions as we thought it was a typo of the actual spelling - you know US english vs UK english or something. Why else would such a simple yet elegant domain be available when something like kushy.com wasn’t?

I’m a fan of literal, my last venture was commonledger.com and the literal nature of it helped people understand the product without much of a pitch.

Usable, not Useable?

So after triple checking we had the spelling correctly and registering 30 odd domains later (I am not kidding you) such as usableinvoice.com, usableaccounting.com… we have our, usable, brand. I am still impressed this day with Jason making this discovery and suggestion.

Three iterations and we had our new logo.

Well, I hope this one entertained you because I enjoyed going down memory lane for a moment there. While there’s still a lot of work to do, and we’re excited for this years’ launch - we also really have enjoyed the fun we’ve had so far.

Here’s to another 9 years. 🍻

I needed some change. An icebreaker can only sustain its push for so long before something gives.

I forever respect Liz MacPherson and Mark Sowden for putting up with a non-traditional person in a non-traditional role of leading Data Ventures at Stats NZ, but am so proud of the team we had who had been there across the stages (Aimee, Nereida, JB, Alice, Sarah, Rath, Blair, Taylor, Jing) and the three that were there through the thick of it with me (Holly, Robert, Jamie).

So I announced my departure, and gave myself a few months to recover, spend time with family and reflect.

As the word got around I had left, that led to people asking what I was up to, and if I’d be interested in helping them and their organisations around data. With multiple opportunities (which I was absolutely humbled by), the best way was to setup a fractional Chief Data Officer role and… *sigh*… contract.

To be clear, I hate contracting, I had never ever done it before, as I prefer skin in the game as an employee of a org (be public sector, someone else’s or my own) and having accountabilities and responsibilities. This is unlike many (not all) of the consultants in the market.

Well, next thing I know I’m on the other side of accounting to where I was with Common Ledger, paying myself through my business I had dormant for 10 odd years. GST, PAYE, Income Tax, all those things that you dread when needing to focus on keeping the lights on. And well, Xero hadn’t moved on much from when I was deeply intimate with it at Common Ledger.

That’s when Jason and I came together, he’s been in the thick of small business while I have been jumping around various roles and opportunities. And we just started throwing around working together finally, as it’s been something I had wanted to do since around 2014 - when he helped me as a reliable source of advice, and sanity through the years.

And then, with a simple gesture, yet the official paperwork behind it as Jason likes to do, a partnership was formed and what was how originally “Simple Balance”, at this point being touted as “Available Balance”, and finally to be named “Usable Balance” started….

But that’s the next part of the story, and not just my story anymore, which we’ll get into next.

In the first period of Data Ventures @ Stats NZ, we spent a lot of time validating opportunities that could be focused on as our key product/service.

I explored various channels to identify what people have seen as opportunities for Stats NZ to innovate, deliver or make available.

The channels were vast, around 15, from OIA’s to custom data requests through the Custom Query team. Stats NZ was sitting on a gold mine of customer feedback, validation and opportunities.

Throughout the process, I made a principle - all IP we create in the early stages of Data Ventures is public IP. The goal was to provide transparency, and offer equal opportunity for others to pick up from the same validation we were performing on each potential venture.

The funnel of ventures went from 75 opportunities, down to 18 through desktop validation (i.e. market research using Stats NZ data, or searching for information). Each was run through a lean canvas process with the team, and we scored each opportunity - they can be found here: GitHub (dataventuresnz)

From there it was simple, which ventures were the team at Data Ventures passionate about progressing. For the ones people were keen on, they essentially became a mini CE for that venture.

Four were chosen by the four team members.

The one that is key to this story was nicknamed - What's Left - Cash flow as a Service.

The other three were “So Lo Mo” - which ended up being Population Density, “Top Down” - aerial photography utilising our national carrier (AirNZ) in their regular flight patterns to capture high frequency but low resolution imagery, and “Stats NZ Assurance” - a method to help assure statistics/algorithms with Stats NZ oversight.

Lets focus on “What’s Left”. If you’re interested in more Data Ventures history, or the other ventures we focused on, get in touch.

The first steps of taking this venture forward was to validate it beyond the desktop research. That meant talking to potential partners, customers, sector players and talk with the wier community.

Customers; it was clear when talking to small businesses that cash was king. While GST is simple in New Zealand, it’s complex knowing what is or isn’t yours in the bank account at the end of the day. The reality is, not many businesses were mature enough to put money aside for GST, as they would often also put away too much. It’s easy for working out GST to put aside for income/revenue, but hard when balancing expenses. This reduces the perspective of available capital in the business.

Partners; we focused on Xero and MYOB here, as we didn’t want to build our own accounting product if we can just add value over the top. While they have the ability to do what we’re proposing through the venture, the focus from their side seemed to be on the accountant and not the business owner. This was due to the nature of where the main decision making comes for the purchase of their product.

Sector; for us the best party to go to was IRD. They are the main stakeholder for not just the collection of revenue, but were also a key stakeholder looking to improve the ability for businesses to be sustainable and meet their obligations. Businesses failing is bad for everyone involved. IRD showed tremendous support, and started introducing us to really key people in the organisation to help progress what we were trying to achieve.

An important thing to note, is Data Ventures being part of Stats NZ is part of public sector. It made sense for two public sector agencies to work together around improving New Zealand’s economy. Demonstrating that this was not just a viable venture, but also a highly impactful one.

Community; as a way to help with procurement and create a speedy way to work with partners/vendors in a shared risk way (we are investing, and we wanted them to invest with us), we ran an event.

At the event we pitched all four ventures to the public and local tech companies - garnering not just interest but also partnership opportunities. Unfortunately Data Ventures was a bit too progressive, and we only found people willing to provide themselves as a paid supplier/vendor, not a shared equity partner.

Fast forward six months, Data Ventures had the resources to only focus on one venture. A “Go / No Go” event was planned, where we brought in the investment community around New Zealand to critique and guide where best we invest our resources.

What’s Left did not make the cut.

As we focused on the chosen venture, What’s Left fell back to the public being offered the IP via Github, and an opportunity for others to carry on our investment into the public IP.

That was back in 2018.

If we then fast forward to 2020 when I left Data Ventures to consult through my own business, I then re-realised the value of What’s Left.

That, is for the next post.

I love me some Sam Stubbs as much as the next person, he’s a pretty onto it guy, but when people start saying that “proper open banking” is going to be our ticket out of one of the least competitive banking ecosystems I start to get worried.

It took us 40 years to get into this extractive banking mess, and it will take 20 years to get out of it. But KiwiBank beefed up AND proper open banking will go along way.

And he’s not alone! The New Zealand Commerce Commission said much the same thing in their bombshell report on the competitiveness of the personal banking sector, essentially offering the enablement of open banking as one of the two main recommendations to increase the competitiveness of the banking sector.

Don’t get me wrong - I understand the appeal: a banking sector where customers can securely and easily connect their bank account to diverse and useful ecosystem of applications that might help with financial planning, enable easier access to credit, allow instantaneous bank-to-bank to consumers or businesses, and seamlessly allow you to switch banks.

In this “proper open banking” utopia small banks and banking startups can compete on a level playing field with the big international banks that currently dominate the New Zealand market as everyone has access to the same open banking ecosystem and there is a low barrier to moving between banks.

But is that the open banking ecosystem that we’re currently building?

As someone who is currently involved with the creation, regulation, and utilisation of of the open banking ecosystem and APIs I think we’re running a real risk of building something that locks in the lack of competitiveness in our current banking system.

Let me tell you why:

1. The barriers to entry for startups and small companies wanting to engage in the Open Banking system are currently far too high, and there is a real risk that they’re just going to get higher. This risks strangling the ecosystem before it even starts and ensures that only large, well capitalised, companies are able to participate.

2. Currently only the big 4 Aussie-owned banks (ANZ, ASB, BNZ, & Westpac) are required to have open banking APIs available. With Kiwibank (theoretically) having their APIs available in 2025/2026.

We’ll leave a deeper dive into the barriers to entry for another blog post but I think the real issue is around the banks that will be supporting these open banking APIs. These are the banks that that are going to have access to the applications and capabilities that will develop in the open banking ecosystem which will be a compelling incentive for consumers to shift away from the smaller NZ banks that don’t support open banking to the large Australian banks that do.

The net result is likely to be a movement of consumers to the Australian banks which will continue to reduce the competitiveness of the market.

How do we solve this? Do we fund the development of open banking capabilities for smaller banks, cooperatives, and credit unions? Do we hope that digital-first banking competitors will emerge?

I don’t know. But we’d better figure it out if we don’t want to be stuck in the same place 20 years down the track.

Over the last 6 years or so we would meet up whenever Drew came to Auckland (assuming he remembered to tell me) and over bowls of ramen or fried chicken sandos he would read out from a long list of startup ideas that he’d emailed himself. We’d discuss technical feasibility and commercial viability and I would reprise my normal role as the sceptic - poking holes in ideas where they could be poked.

For the record, the original Simple Balance (the name Usable Balance was originally pitched under) was 100% Drew’s idea. I was hooked from the first time I heard the pitch: how much of that money in your bank account is actually safe to spend? I’ve spent my career as a small business owner who works closely with other small business owners, so I know how hard it is to keep on top of cash flow and how quickly a seemingly healthy bank balance can just evaporate after payroll and GST and income tax and ACC and on and on and on. The idea of giving business owners real time visibility into their actual cash position felt like shining light in a dark place.

The concept has evolved a lot since then, the improvements of which I will lay some claim to, but the underlying ethos is the same. I like to distil it down to this:

Our aim is to automate the tedious administrivia of running a business.

Usable Balance is our first foray (and where we’re currently pouring all of our blood, sweat, and tears - so many tears), but it won’t be our last.

New Zealand small businesses deserve better. And we aim to enable an ecosystem that gives it to them.

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The concept was simple, show what a business owner has in their bank account minus what they owe to IRD and when. Sounds familiar? It’s because fundamentally it hasn’t changed, nor has the pain to the business owner.

Back then, it was known as Simple Balance.

But before this date, there is some context needed.

In October 2016, my mum passed who was my biggest supporter in all the (ad)ventures I chose to follow - no matter how crazy it was. As a solo mum, even when working multiple jobs, she always had time for me. Gosh I miss her.

In November 2016, I had received the news that Penny was to shutdown unexpectedly. Penny was the P2P lending company I was CTO for, and unknown to me, they were struggling and could not raise the required $20M capital to please the FMA concerns around being able to sustain any losses when launching. It was dead in the water, leaving me without a job coming into the Christmas period.

In my infinite wisdom, I thought the best thing to do was try launch a new company, and off the back of Penny - which I was passionate about building money literacy through P2P lending (turning borrowers into lenders), this seemed to make sense.

Reality is, I wasn’t ready for it. I tried pitching to Westpac, to a good friend Lewis Billinghurst. It needed refinement, my pitch deck was weak. It needed much, much more validation and modelling to even get a bank to consider it.

I didn’t have it in me.

Mentally exhausted, physically weak, I needed a break. I took a December and January off just to be with family, reset, find a stable job and put this on the back burner for now.

End of January 2017, I joined ACC to lead their flagship project. The goal was to bring people online into a digital experience, away from paper and letters and get instant access to the support they needed. My time there was a huge success, I thrived in quasi government/public sector, and got involved in the business side of ACC too.

And that’s when I saw the stars align, ACC has a struggle with business owners knowing what they owe and when. I’m inside the business/customer, I can identify the key individuals needed for this to happen, this is the chance…

… or not. As I positioned, got the right people together, I then got approached for an executive role in Government. I had to focus on this new role, it was the second role in government, first time executive in public sector and it started off with their Legal Counsel risk assessing my character to ensure they hadn’t made a mistake bringing me on board to lead Data Ventures.

I will end this part of the story with a link to the IP we released to the public domain at Data Ventures when assessing opportunities to invest in and launch. It’s a key part for the next part of the story.

For me, this isn’t my first foray into the fintech space, where I’ve had two really great (and not so great) experiences founding companies and have many thanks to amazing individuals who have supported me along the way - founded PAPERKUT (providing paperless receipts in your internet banking experience - acquired by Antipodean Labs, San Francisco in 2014) and co-founded Common Ledger with Vince Warnock (connecting accountants to their clients, no matter the accounting product - exited 2017).

Those two ventures brought me almost 10 years of exposure to financial technology, banking, accounting, growing business and the world of capital raising. At the same time, I had two children who both had health issues, and trying to be the sole income for the family at the same time. I burned out.

But that was years ago, and I’ve had amazing time with my family, time to recover, amazing experiences in government, private sector & advising. Now it’s time to talk about what we’ve been up to with someone I’ve wanted to work with for a long time - Jason Danner.

It’s time to get serious again, and with what I think is a seriously great offering to the accounting software space that will bring in the new step - automation.

Having spent time observing the fintech space in the years I’ve been away from it - I’ve been talking with people who have since left Xero and MYOB, learning issues in each of those companies and products, testing concepts and product models, plus the timing in the market around what’s achievable, now’s the right time with what we’ve done.

So this is my first post of many about Usable Balance, the industry, related news, and highlighting what we find interesting. Expect to hear from not just myself, but Jason and Stokes who has just joined us - which they can introduce themselves in their own reckons.

Like any good content creator, like and subscribe below for more.

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