Lucy Cohen, CEO and Co-Founder of Mazuma: “It’s no longer acceptable to wait three weeks to open a bank account”

Author. Entrepreneur. CEO. Not a bad trio of epithets, and Lucy Cohen, CEO and Co-Founder of Mazuma, can claim all three: the business she co-founded almost two decades ago continues to thrive, while her book – Forget the First Million – won Best Short Business Book at 2022’s The Business Book Awards.

So we were keen to hear Lucy’s insights into the fast-changing world of fintech. After all, Mazuma has kept growing through two turbulent decades for the industry as a whole; it’s little wonder that she lists “agility” as the key thing that traditional finance and banking companies can learn from fintechs.

If nothing else, read Lucy’s insights into the changing role of the finance department (Mazuma was the first subscription-based accounting service for small and micro businesses). If it’s still purely a functional department, you may well be missing out on opportunities to grow.

We also love Lucy’s mentoring words for people who are interested in following in her footsteps. “My advice centres on three key areas,” she told us, “acquiring knowledge, embracing flexibility and continuous learning, and cultivating a robust professional network.” Keep reading to find out more.

Recommended reading: Accelerating RegTech adoption is a gamechanger for the UK’s financial sector

Could you please introduce yourself to our audience and share how you ended up working in fintech?

I’m the Co-Founder and CEO of Mazuma. We were the first subscription-based service in accountancy, providing affordable and accessible accounting services to the UK’s small and micro businesses. Founded in 2006, we pre-date cloud technology in our sector in quite a way! So we’ve grown up as a business by creating efficient systems to deliver the service, and have leveraged technology as it’s become available to us. More recently, we have been developing our own proprietary platform as the engine that runs the company.

What do you think traditional finance and banking companies can learn from disruptors in the fintech space?

The key word here is agility. We live in a world now where it’s no longer acceptable to wait three weeks to open a bank account or get a decision on a basic financial requirement from your bank. More traditional companies will need to drastically change their approach if they are to keep up with the disruptors.

Fintechs excel in creating ecosystems that cater to niche markets or underserved customer segments, providing services ranging from micro-financing to specialised investment products. Traditional banks should be looking to learn to incorporate similar strategies, particularly by using data to understand customer preferences better and by adopting more flexible, scalable technology platforms. This can lead to more personalised banking experiences, more efficient operations and, ultimately, a stronger competitive edge in a rapidly changing financial landscape.

Related reading: Patric Glassell, Head of Sales at Kwanti: “Aspiring fintech professionals should embrace risk and uncertainty”

In what ways is artificial intelligence impacting the fintech sector?

AI is reshaping the fintech sector by automating complex processes, enhancing decision-making, and creating never-before-seen personalised customer experiences. These technologies are enabling the analysis of vast amounts of data to identify patterns and insights that were previously inaccessible, allowing for more informed decision-making.

In credit scoring, for example, AI can evaluate non-traditional data sources such as mobile phone usage or shopping behaviour to assess creditworthiness, thereby expanding financial access to otherwise underserved populations. The power of this data is, at the moment, barely being tapped, but it’s certainly snowballing now, and I expect the pace of change to keep accelerating.

We’re also seeing AI-driven solutions improving security and compliance in financial operations. These algorithms are now capable of detecting fraudulent activity with higher accuracy and speed than traditional methods – another place that traditional companies will need to look to keep up.

AI is also playing a crucial role in regulatory compliance, where it’s helping companies keep pace with constantly changing rules and regulations by automatically updating systems and processes.

As AI technology evolves, its integration within fintech will likely become deeper, driving innovations such as voice-activated banking, more sophisticated robo-advisors, and automated wealth management services. It raises questions about ethics, when companies will have to declare AI vs human interactions, but ultimately if customers are getting what they need more quickly, companies will find a way to make it work to keep their competitive edge.

How has the role of the finance department changed with the advent of fintech?

Fintech has suddenly transformed the role of finance departments within companies, pushing them from traditional back-office functions to more strategic, front-line roles. Automation and sophisticated financial software have streamlined routine tasks such as transaction processing, budget management and compliance reporting, freeing finance professionals to focus on strategic decision-making and value creation.

Finance teams can now use predictive analytics and machine learning to forecast market trends, assess business performance and drive corporate strategy. The integration of real-time data into financial planning allows for more agile responses to market changes and informed risk management.

Interestingly, we’re seeing finance departments become increasingly involved in driving digital transformation initiatives within their organisations, advocating for investments in fintech solutions that can enhance operational efficiency and customer satisfaction. This shift not only elevates the role of finance teams but also integrates them more deeply into the operational and strategic fabric of the company.

For example, just at Mazuma, we are looking to our finance function to go way beyond the traditional role of processing ledgers and budget management, into a more strategic use of BI and data to give colour and scope to the numbers in our organisation.

Recommended reading: Top ten breakthrough fintech companies

How does your company differ from its direct competitors in the fintech space?

We see ourselves as the interface between high-tech fintech performance and the end user who perhaps does not live in a digital world. We reach across the divide and make sure that even those who do not enjoy using technology or digital methods to manage their accounting, still have access to the data they need to run their businesses or save for their tax bills.

Getting data into a system is a real pain point for so many small businesses – and we have ways to make that far easier for them. This is a huge differentiator for us from our competitors who tend to insist that their client bases use an incumbent cloud software to manage their day-to-day bookkeeping. Our research suggests that when small businesses are forced to manage their own bookkeeping, the incidence of mistakes is significantly higher and tensions arise between professionals and their clients in terms of whose job it is to rectify those mistakes. Our technology and business model eliminates all of that.

What advice do you have for aspiring professionals wanting to work in fintech?

My advice centres on three key areas: acquiring knowledge, embracing flexibility and continuous learning, and cultivating a robust professional network.

Firstly, and maybe obviously, you need to develop a strong foundation in both financial services and technology. Gain a solid understanding of financial principles, products and regulations and the challenges they create for companies. Simultaneously, immerse yourself in technology skills relevant to fintech, such as data analytics, machine learning, payments and cybersecurity. A general understanding of the landscape and existing trends and products within it will stand you in good stead!

Secondly, the fintech landscape is dynamic and fast-evolving, you’ll need to be adaptable and committed to lifelong learning. Stay updated on industry trends and technological advancements. Engage with ongoing professional development opportunities, attend industry conferences, and participate in relevant workshops and courses. Tech moves fast, so you’ll need to as well!

Lastly, build a strong network within the fintech community. Connect with peers, mentors, and industry leaders through professional networking sites, fintech meetups and forums. Fintech really is a very vibrant community and you’ll find people are very willing to get to know you if you put the effort in.