If you're a frazzled freelancer this bank might be music to your ears.
Being a freelancer is scary.
I say that and I’ve been doing it for nearly a decade.
Often you don’t know where next month’s rent money will come from and you’re entirely responsible for your own success.
Plus there’s a host of complicated things to keep track of, not least insurance and tax.
When it comes to finances, freelancers like me often find ourselves adrift, figuring out how to do things by first of all getting it wrong.
And if you’re looking for support, your bank can sometimes be more of a hinderance than a help.
“I feel that banks actively throw up barriers to freelancers” argues entrepreneur Sam O’Connor.
“They do things like ask for a business plan and that doesn’t acknowledge the simplicity of what a freelancer’s business model is.”
Frustration with his experience as a freelancer, led O’Connor, and business partner Adam Goodall, to build a solution – one that might be music to the ears of sole traders across the country.
Coconut, launching in the UK later this year, is a bank that’s being built especially for the self-employed.
It’s designed to help frazzled freelancers with three things: managing their expenses and receipts, keeping on top of their taxes and getting paid on time.
And if you’re familiar with banking app Monzo, you’ll also recognise some of the nifty touches with live data: you’ll get instant notifications on transactions, for example, which take at least one day to show up on your high street bank account.
“Banks have really neglected very basic stuff that we think should happen in this data driven world. Things like a good data feed to accounting packages, and other tools. It’s a much more seamless experience,” O’Connor told The Memo.
Now, you might wonder why freelancers need their own specialist bank, but the founders of Coconut say traditional banks don’t treat sole-traders any differently to large businesses.
“It’s quite farcical really” says O’Connor. “They look at this market as ranging between businesses of 250 people down to a freelancer. In grouping everyone together the tendency is to offer products that suit the higher end, bigger businesses. What we’re looking at is segmenting and providing something for this group of people who have been underserved.”
Unlike your current bank, with its many thousands of staff, Adam & Sam are the only employees of Coconut. The rest of their work is done, true to form, by freelancers. “We like supporting the market” says O’Connor.
You can’t join right away: there’s a waiting list while the product is in beta, but they hope to launch Coconut later in 2017.
And the potential market is bigger than you might think.
Figures from the Office of National Statistics reveal nearly 5m Brits were registered as self-employed last year.
That’s a 21% increase since 2008.
The appeal of working for yourself is reflected in Coconut’s name, evoking the romantic image of lying in the shade of a palm frond while working on a design for a client a thousand miles away.
“I think people are tired of the idea of working in the same place in the same office every day with the same people, having a gradual career path,” O’Connor told The Memo.
“Freelancing gives them the freedom to work with who they want on their own terms and be flexible in how they work.”
Customers are notoriously reluctant to change banks so a lot will depend on whether Coconut can convince freelancers to make the switch.
But with the gig economy only getting bigger, it’s probably about time freelancers had something just for them.
Adam Westbrook is Associate Editor of The Memo’s Creative section. He’s an independent video artist, filmmaker, and occasional lecturer in journalism and production.