The FSL Chronicles – A story of an early Fintech startup
The foundation of FSL was laid in the front room of a small terrace house in Greenwich in September 1993 by David Pirrie. Initially started as a home project, this fledgling Microsoft Access development progressed toward a full Capital Gains Tax management product. The new software was named ‘CGiX’ by compressing the words ‘CGT’ and ‘indexation’ and in August 1994 Stockbroker Software Ltd (SSL) was formed to take it to market.
David’s brother, Andrew, joined SSL during these early days and, while also holding down a full-time job, reviewed contracts and prepared accounts for the business. The first employee joined a few months later to help create the CGiX user interfaces. David worked several days a week on external contracts, to support the business, then continued the design and development of CGiX in any free time.
In 1995 Louis Halpern, an extraordinary sales and marketing force, joined the company and soon had two major banks lined up as clients setting the company on its way. In October that year and now confident, SSL moved to its first office, the size of a storage room, above a firm of solicitors in Welbeck Way, London W1 owned by Louis’ uncle.
The Welbeck Way days were frantic, uncertain but exciting times, working seven days a week and sometimes through the night to meet deadlines. The calculation was proven, front to back interfaces written and, most importantly, a well-structured relational database of all UK corporate events since 1982 was built. This corporate event database remains a unique product and extraordinary when considering it was cut from data mostly in hard copy, in different formats and from different data vendors. It underpinned the CGT calculation accuracy and gave CGiX a market advantage. Our relationship with data vendors in those days is a story in itself and goes far to provide a moral backdrop to what was then the predacious nature of large companies toward the small. How that tide has turned!
Louis’ success at grabbing the attention of prospective clients meant that larger premises were required to accommodate urgently needed staff. In July 1997, SSL took on a basement office in a townhouse near Baker Street station. We soon outgrew the basement and shifted to a larger 2nd Floor office – an act of generosity by the landlord we thought until the summer heat arrived and the office became stifling even with air conditioning units hanging out of the windows.
During the three years in residence near Baker Street, we grew into a company proper. We changed our name to Financial Software Ltd (FSL), which more closely reflected what we did. We implemented structure and procedure and sowed the seeds of the service culture on which our reputation grew. The story was not without growing pains as we became acutely aware of competition when an upstart newcomer won a yearlong bid with our then largest prospect. Financially this was a disaster but rationally it was the most important event in our history. We worked to improve everything that we did: we became more competitive and certainly more professional in the management of the business.
In the March 1998 Budget the then Chancellor, Gordon Brown, announced a major reform of CGT. He was to introduce a taper relief on gains and scrap the indexation allowance. FSL set about trying to understand and implement these proposed changes. With gaps in our understanding and some confusion over the practical aspects of implementation, we held a conference with our clients and other tax practitioners to discuss the issues that we had identified. Our assessment of the proposed Finance Bill 1998 changes to CGT was written about in the Financial Times and we had direct contact with HMRC. With clarification, the 1998 Finance Act introduced Taper Relief and abolished indexation allowances for individuals, going forward. FSL and particularly CGiX had become far more market relevant. The boost to our profile was enthusiastically welcomed.
FSL made the big move to the City in December 2000, moving into temporary offices at Bankside House, Leadenhall Street EC3 – walking distance to most of our clients. Then, in what seemed like a moment, in September 2001, we moved to Windsor House, King Street EC2. In our brief stay at Bankside House, we had managed to migrate our database platform to MS SQL Server. Imran Khan had also joined us, in 2001, as a Project Manager to oversee this platform migration.
Being in the City seemed to bring opportunity knocking at our door. It is as if we had finally been let into the club. Government agencies and trade bodies talked to us and there is no doubt that we benefited from their guidance and inspiration. The King Street years was a period of solid growth and, while it’s difficult for a small business to break the hand to mouth trader mentality, the stability gave an opportunity to change toward a long term business model where quality of staff, through training, produced quality of product and service. If there is a takeaway to offer, it is that the various trade bodies including the IoD, the Securities Institute and the old DTI, through Business Link, encouraged and assisted us toward the next level of professionalism.
In November 2006, following three months of preparation, assessments and interviews FSL was awarded its ‘Investor in People’ accreditation. The assessor’s comments “Financial Software is an excellent example of a company who have embraced and used the IIP framework to underpin changes in their business”, highlighted our ‘embrace change’ attitude. This investing in people ethos of the company supported staff in acquiring Level III Certificates in Securities, ATT tax technician accreditations, PRINCE II qualified project managers, an MBA, Chartered Director status and more technical qualifications than can be mentioned.
We’ve had some extraordinary employees over these years who took the initiative and put in the graft to secure us from threats to the business. One notable employee was Shrity, our data manager. With single-minded determination, she expunged and replaced the data from one of the aforementioned ‘difficult’ data vendors, so we could then cancel our licence. This was laborious work. Interpreting thousands of records, recalculated factors and auditing the data sources from a multitude of new suppliers. The benefits from this labour have been huge and we are regarded as having the most accurate and detailed securities taxation data set in the market (with less data support issues than before).
After being awarded his MBA from Kingston University in March 2006, Imran Khan was appointed a Director of FSL. The additional gravitas of the Director role along with Imran’s hard work and initiative rewarded FSL with new projects and new clients. In December 2007, after 13 years as Managing Director, David Pirrie stepped down from this role. FSL had an enviable reputation for professionalism, a healthy balance sheet and a strong management team. It was time for a fresh perspective. Imran Khan was handed the Managing Director baton to take the company forward with new ideas.
In 2008, FSL and Seven Investment Management (7IM) teamed up to build a web-based discretionary portfolio management system. The new system (eventually called IMiX) was to combine advisory order routing and discretionary portfolio management, modelling and GIPS compliant performance measurement. IMiX was announced in a press release on the 12th January 2010 with the IT Director of 7IM being quoted as saying that ‘the system provides unique functionality’. Two years later the management of FSL felt that the development of IMiX should be moved into a separate company, so in December 2010, ‘Financial Software IMiX Limited’ was incorporated to do this. This new company subsequently changed its name to Investment Software Limited (ISL) in January 2011.
The Corporation of London were looking to redevelop our King Street office building and so in September 2011, after 10 years in King Street, we moved into a new office in Eden House on Wilson Street EC2M. Changes bring challenges and during this period, we saw the departure of some of our long-term employees: those who had been there at the early stages and had contributed so much to the business with their ideas and initiatives, their experience and skills. We are pleased that all have done well with their new employers and ventures.
It became clear in 2013, that the focus of the management had become heavily biased toward the IMiX product development to the detriment of CGIX. David and his brother, after lengthy discussions, agreed to go their separate ways with David taking total ownership and full control of Financial Software Limited and CGiX, whilst Andrew and Imran took ownership and full control of Investment Software Limited and IMiX. By April 2014, negotiations were completed and with handshakes and wishes of good luck, the ownership split of Financial Software Limited and Investment Software Limited was signed off. As part of the company split agreement, Imran Khan and Andrew Pirrie resigned as Directors of Financial Software Limited. Ken Gillingham then joined FSL as its new Managing Director with a brief to re-energise the company and build a new management team.
In many respects, the three years that followed the company split were like the Welbeck Way days back in the late 1990’s. Frantic, uncertain but exciting times. The technical accomplishments during this period cannot be understated; we upgraded our Software as a Service offering to such an extent that our processing times fell by an order of magnitude. The security of our systems and operations became second to none (paraphrasing comments made by the auditor from a top four bank), we have a Triple ‘A’ security rating for our website and technologically speaking there is little left of what we started with. Under Ken Gillingham’s leadership, FSL has become nothing short of operationally excellent.
Prior to the full acquisition of FSL, David Pirrie had been working in Dubai. The UAE is a very good place to get a strategic view of the changes and challenges to global economies from a point between the East and the West. It therefore seemed like a good idea to establish an FSL branch office (FinSoft DMCC) in Dubai. This has proved successful in not only translating the economic changes and challenges to international finance but also to see the sentiment change toward emerging countries and their markets and the emerging technologies so readily adopted by these markets. Many of these insights form the basis of our current strategy.
April 2016 heralded another office move to our current location in Great Winchester Street, London EC2N and a new outlook. Quite literally out-look. During the rebuilding of the business, we had been necessarily looking inward. It was now time to look outwards. Strategy is now a very large part of the new management team function and to support this FSL recruited its own research department early in 2018. Now with quarterly offsite conferences (both home and abroad) the management team deliberate on the research team’s findings and our insights into new markets and technologies. FSL is now strategically focused and in a period of rapid growth. We are taking on new staff and the business is buzzing!
So, in conclusion, 25 years on from the front room in Greenwich, the business is as alive as it was in those heady startup days. The challenges will always be there and so they should be, because they are what has made us FSL!