Which is why economia’s interview with Gregor Mowat, who worked for KPMG for more than 18 years in Brazil, Thailand, South Korea and the Commonwealth of Independent States (principally Russia, Kazakhstan and Kyrgyzstan), is not only enlightening but testimony to where a chartered accountancy qualification can take you.
Mowat says he might not have considered the profession at all (he studied English literature and language at the University of Durham) had his father not been a chartered accountant, and his grandfather before him. He says the conversation in 1999 where he told his dad he wanted to travel the world was one of the hardest he’s ever had. “Dad was senior partner in his own firm, William Duncan & Co, at that time. He had been partner, and then senior partner, and wanted me to continue that tradition. I wanted to work with bigger companies, to learn a foreign language, and felt the landscape was changing for smaller accounting businesses. So I sorted out a position with KPMG in Brazil.”
It was to be a life-changing decision for Mowat, who only came back to work in the UK in 2016 – initially as an investor in credit-improver.co.uk, now CFO and co-founder at financial inclusion fintech company nooli – because of the war in Ukraine. He was CFO of KPMG’s CIS business at the time, and explains: “It was not so much the fear from a physical perspective but concern economically about what might happen.”
He learnt a lot about people and culture in his time away, and about the skills the emerging markets sought from accountants, especially those accelerating into growth. He describes his experiences as “vast and vastly different”. Coming out of Scotland “and the shadow of a family business” and joining a Big Four firm was “fantastic” and “crazy”. Only two of the team of 70 he joined in Rio de Janeiro spoke “passable English”. The CFOs didn’t tend to speak any English either so he embarked on learning the language. “It was intense. Getting up at 6am to study Portuguese, going to my lesson at 8am, going to work, doing a Big Four-style day’s work, catching up with my wife, studying again… After six months of that I could speak the language and was able to operate in the country.”
He’s frank about why he moved around at KPMG so frequently: every decision was “entirely around how I could manage my career trajectory”. He went to South Korea, for example, “because there was no room to go up in Thailand and the chap who ran the Standard Chartered audit in the UK needed somebody to go to Korea to oversee the audit there, because they’d bought this troublesome bank”.
So that’s what he did. He remembers the Korean operating environment as “very challenging” from a legislative, regulatory and reporting perspective, “but with hugely outward-looking, immensely fun people”. Still, he didn’t particularly enjoy playing the bad cop role – he was responsible for oversight of the capital markets – nor did he want to return to the UK as a “bottom line partner”, so when he was offered the chance to set up a financial services business for KPMG in Kazakhstan, he didn’t hesitate.
He was in the region for six years, as CFO for KPMG in Russia and the CIS, and managing partner of KPMG in Kazakhstan. “I arrived in Almaty on 25 August 2008, days before Lehman,” says Mowat. “The financial crisis slammed into Kazakhstan as it did everywhere. Two of the top four banks effectively went bust and were nationalised. In the ensuing chaos KPMG did most of the advisory work supporting these banks and then did the audit of one of them, so we had the good fortune to get a banking franchise. And now we’re the biggest banking franchise in Kazakhstan.”
Mowat often refers to KPMG as “we”, even though he left in 2016. After everything they went through together, it’s no wonder he’s fond of the firm. When he was given oversight of the Kyrgyzstan office, for example, there was a revolution.
“There were guns in the street, so we were making sure people were safe and business could return to normal as soon as possible. People don’t want to stop working because they don’t know if they’ll start again. Later there was a terrible ethnic cleansing in the Osh Valley, which involved hiding the family of one of our members of staff. And then we had the Ukrainian war. We had an office in Donetsk that was nationalised. They basically took it. We got the people out well before that and tried to salvage a few computers.”
He disagrees that managing a team across regions is difficult: “People are people are people.” He applied that philosophy to his clients. “I used to audit the national bank of Tajikistan, after it had been subjected to a $1bn fraud. That was one of my more interesting pieces of work. I had to map a five-year plan to bring it from the edge. In the fifth year we got them there. It had been very messy and they were terribly ashamed. So it was a massive sense of achievement.”
Of course there was more to that role than empathy. The corporate governance process was meticulous. “Within KPMG at the time we had a more rigorous quality control process than pretty much anywhere else in the KPMG world. There was zero tolerance, a forensic background search on potential clients. To mitigate any form of pressure (political or client – some of these people are quite powerful) every set of financial statements that was going to have an audit opinion issued was sent for independent review in Moscow. That took that pressure off the table,” he says.
Working in such circumstances, he enjoyed the camaraderie. “There’s this huge, aspirational middle class who function in dysfunctional countries. The governments are not democratic, and there’s a huge amount of corruption. So for these guys to operate and stay on the straight and narrow is difficult. I have so much respect for them. My one learning is yes, cultures are different but people are people. Maybe the Brexiteers should think about that!”
When Mowat met Tom Eyre, the founder of Credit Improver and now his business partner, on his return to the UK it gave him a purpose. With his family back in Britain and loving it, he says, he decided his commute from Russia and Kazakhstan was unsustainable. “I thought, ‘I’ve got a decent crack at my age of doing something else’. So I came back with the objective of setting myself up as an angel investor, picking two or three projects and getting a few non-exec roles. I met Tom, who needed help with structure and process as much as funds. So I invested but changed my plans to full-time help as CFO.”
That was only one year ago but things have moved on significantly since then. Mowat is co-founder, with Eyre, of nooli, which has two products – Loqbox and Credit Improver. “The nooli business is about helping people who are locked out of the credit system come into the system in a safe and responsible way,” he says. “Payday loans, or high-interest short-term credit, we’re the solution for that.” Inclusion is close to his heart, he adds. “I wanted to invest in something that works for the general good, something that’s adding value from a social perspective. It had to be in an industry I understand – financial services – and I’m in it for a profit so it had to be scalable. Financial inclusion in fintech is where I’ve ended up.”
He’s also landed in the frenetic start-up environment, after nearly two decades with a Big Four firm. “I had not intended to be full-time, right down to building the accounting system myself,” he says. “We’d like to grow. We’ve met Innovate Finance for connections and tips on how much money we want and where to get it.” They’re seeking around £5m, “to scale Britain, launch in one emerging market, and America”.
That’s why he’s so loquacious about credit systems. He’s in sales mode. He believes nooli, or more specifically Loqbox, can help the portion of the population that falls into the subprime category and is therefore blocked from “accessing basic goods and services”. He cites research by PwC UK, which says “there may be between 10 million and 14 million people, around a quarter of the total adult population, who may find it difficult to access credit from mainstream sources, despite having only relatively minor blemishes on their credit history” or because they have no credit history at all. The solution, and here he draws a picture to illustrate, is to assist some of those subprime people.
“We can help those who are coming out of a bad debt situation and need to start showing they can be trusted again, and we can help the thin files [those with a limited credit history]. Loqbox helps you build a credit history, learn about responsible financial management and save up a regular payment of between £20 and £500 per month (we know the FCA is keen for people to show they can handle multiples of minimum payments). And it’s completely free. We’re making the invisible people visible in a positive way,” he says.
It’s good patter, and it’s resonating with some high street banks, which is where nooli makes its money. If Loqbox customers want to continue saving after they’ve achieved their credit payment history – “90% of our customers have told us that having established a savings habit, they’d like to continue and 87% have told us they’d like to keep their savings separate so they don’t spend it by mistake” – nooli recommends a partner bank. “We’ll pay their savings into that partner bank account, they pay us an introductory fee. It’s a virtuous circle. The bank is happy because it gets an aspirational customer.”
They’re currently working with RBS and NatWest; more are in the pipeline. And Mowat is excited about the potential to pivot. While Loqbox is about credit exclusion in developed economies, it could be about banking exclusion in emerging markets as well. “Which altogether changes the dynamic. And makes me feel a huge sense of happiness that we could potentially fix a disgraceful situation.”
He’s referring to a World Bank figure that puts the number of unbanked adults worldwide at two billion. “We can take people who are completely unbanked, which in South Africa for example is 48% of the adult population, we could take them through our process and in so doing we’re demonstrating behaviour to banks. So not only do we pass that aspirational South African on to a mainstream bank, we’ve also created a profile that allows them to be accepted. And that is very cool.”
He’s keen to maintain a NED position, for his sanity if nothing else. “The fintech world is brilliant but informal. We all move around in trousers that are too tight! I didn’t want to lose contact with my Russia and Kazakhstan base,” he says, or the more formal world he used to inhabit, so he accepted the role of chair of the audit committee and independent non-executive director at Nordgold.
He’s got his work cut out over the coming years, but he’s up for the challenge. And at least he doesn’t have to learn another language.