It all started with a tweet from 11:FS co-founder Simon Taylor. If the U.K. government could be persuaded to provide financial support to the self-employed during the Coronavirus crisis, as it has already pledged for full-time employees, then Open Banking technology could be used to self-certify lost income, and therefore overcome one of the main hurdles of administering potential compensation.
The founders of two other London-based fintechs, Fronted and Credit Kudos, were first to accept the challenge, and soon they were joined by dozens of other volunteers from the wider U.K. fintech community with the aim of turning around a working prototype of "Covid Credit" in just 48 hours.
"Like many, we saw a challenge for non-salaried workers who are currently ineligible for government relief," says Fronted's Jamie Campbell. "By using Open Banking, we have been able to quickly develop a simple process that allows non-salaried workers to generate a proof statement which details their past income and the impact of COVID-19".
The Covid Credit team's hypothesis is that evidencing and validating the income of a sole trader is significantly harder than a salaried worker, and that there was an opportunity to use Open Banking (via Credit Kudos' existing API) to quickly access and analyse data from the bank accounts of a sole trader and generate a validated income statement, something Campbell frames as a "Covid Credit ‘minted’ self-certification".
"Using the application, applicants answer a few simple questions relating to their legal status and the impact of COVID-19 on their income," he explains. "The application processes this information and creates a unique link that (in time) can be shared with the appropriate government body in order to prove loss of income."
Under the hood, Covid Credit exists as a standalone Python web application which is running on Google Cloud. The app uses the Credit Kudos API and aggregates data from an individual's bank accounts, applying a number of pattern recognition algorithms in order to calculate key income figures.
"We believe Covid Credit can provide a crucial piece of the puzzle in identifying and validating the needs of freelancers and non-salaried workers affected by COVID-19," adds Campbell. "In practice, this might help extend the reach of furloughed worker relief (part of the government’s package for full-time workers) to include self-employed workers, though, this is just a hypothesis. We plan to present the finished solution to key stakeholders this week and support the potential roll out in the coming days."
To that end, the Covid Credit team say they have already engaged with a number of key stakeholders across HMT, HMRC and the FCA, and are hopeful that sole traders will be supported, with or without the app being part of the solution.
"This afternoon the Covid Credit team have spoken to @TheFCA, @HMRCgovuk, submitted a response to @hmtreasury and been given direction to help Number 10," tweeted Campbell yesterday.