Building a Green Banking Solution with Will Smith (Tred)

Andrew Welcome to byProduct Live where we unbox everything SaaS and product. We talk with experts and leaders in SaaS and product to understand their approach to leadership and ways of working to share their knowledge and understanding. Andrew For today's episode of byProduct Live, I'm joined by Will Smith, co-founder of Tred, the green business current account with sustainability at its heart. Tred was founded four years ago by Will and his business partner, Pete.

And today we're going to talk to Will about Tred's journey, the recent launch of their business account, and what makes Tred special. In his free time when he has it, Will is a keen runner and he's currently climbing every peak in the Yorkshire Dales with his dog, Mayo. Will Smith you Andrew He also holds the record for the world's fastest tree, which is an interesting fact. And when he was younger, he wanted to be a musician, having played the drums for 26 years.

Welcome to the show, Will. How are you today? Will Smith Yeah, good thanks. It's great to be on the podcast.

Andrew Cool, so we're going to dive into things in a second, but most important question I think today is you play the drums, you wanted to be in a band, so if you had the choice now, which band would you want to be in? Will Smith So great questions. I think just for the amount of time on road and the places in the stardom, it would have to be with Elton John. The man is a myth and an absolute legend.

So yeah, it would probably be Elton John's band. Andrew Yeah. Yeah, cool. Definitely a good option.

after hit. And he's very good live, actually, although he is knocking on a bit now. Will Smith I've actually... Yeah, well, yeah, maybe in their heyday, but I've seen five.

Unbelievable. Andrew Yeah, cool. So let's start and dig into Tred and your journey. So to kick things off, do want to just give us a little bit of background about Tred and why you founded the business?

Will Smith Yeah, so how businesses manage their money has a massive impact on climate change, whether it is through where they hold their money or what they do with that money. And what we found is that larger banking institutions, they kind of do two things. One is that they use customer and business deposits to loan out to other companies. And so it's not necessarily there for when a company needs it.

And the second thing is quite a lot of the big providers are actually using that money to invest in fossil fuels. Andrew Yeah. Will Smith more and more businesses are waking up to that fact. And so what Tred does is we don't do that.

And so we have 100 % fossil fuel free current accounts, which means that businesses, their finances and their current account are actually supporting and in line with the values of that business. That's one half of the product. And then the second thing is that more and more businesses and specifically small businesses are being asked to produce carbon impact reports, sustainability reports. Andrew Okay.

Yep. Will Smith either because they're going for government tenders, they're going for grant applications or they're in a supply chain of a larger business. And it's really expensive and it's difficult to do. And so over the past four years, we've developed the technology to automate all of that.

Andrew Yeah. okay, cool. I certainly know from experience, having done tenders in the past, that it's so high on companies' agendas. But as you say, the ability for smaller businesses to be able to report that is difficult without using a third-party provider.

And I think that third-party provision can then become expensive as well to try and get reports from other people. So the fact it's actually bolted into the product is fantastic. Will Smith And one of the things that we found is that, I mean, the stat that I love is that if you hold a hundred thousand pounds with one of the high street providers, it has the same financed emissions as about 254 flights between London and this. And that's just because they're investing your money and businesses money into fossil fuel projects.

And it's like hidden emissions that businesses are becoming more and more aware of. As you see it in the news, you're reading about it all the time, you know, with confidence. Andrew Yeah. Wow.

Yeah. Will Smith climate change news and businesses are waking up to the fact and they're looking for green providers and just it doesn't exist here in the UK. So that's kind of we found the tread and that's kind of the sweet spot that we're sitting in. Andrew Yeah.

Yeah, I guess unethical practices by big institutions. It's unbelievable when it just gets swept under the carpet. It shouldn't make sense really and they shouldn't be allowed to do it. Will Smith Yeah, and it's, I mean, we've seen so we are growing customer base at the moment.

see them, you know, digital marketing agencies, we've got small shops, we've got IT consultants, all these kinds of businesses and they're, you know, they're very sustainably minded, or sometimes they're not sustainable minded, and they're actually just looking to become, you know, greener and more ethical. But then when they send an invoice out, they've got Barclays on there. It just doesn't quite tally and so more and more are coming towards us to say, know, actually we want to be banking with, you know, with Tred.

Andrew Yeah, cool. from setting up the business, it's not all been kind of plain sailing since you set things up. I think last time we spoke, you were much more in the current account space. But now you've kind of made that pivot to be more business focused.

So what kind of drove that decision? Will Smith Yeah, so what we found is that, so we used have a consumer product. What we found is that actually most of our customer base was actually small business owners, either because they wanted to have that fossil fuel free current account or they needed to know their carbon impact. And it was always something on our roadmap because launching a product like ours is difficult and there's so many things to get right.

And so we were always going to be doing consumers first, then into the business space. But what we found is that most of our active customers were small business owners. And so we basically decided that actually we should be focusing our efforts there. Kind of two reasons is one, it's what our customers were and that we should go get more of.

And then the second one is that businesses have a much greater impact on the planet because they hold more funds, they're spending more money and actually they're the ones being driven slightly more towards net zero. And so. Andrew Yeah. Okay.

Will Smith we basically ended up just shifting our priorities. instead of doing consumers, which allowed us to all of the testing that we needed to and refine our payments technology, refine those carbon calculations, but then we just shifted across into the business space slightly earlier. And it's been great. We've seen an amazing amount of traction with small, smaller businesses.

And that's really what our product is being catered to is it's a sort of slight extension of a consumer product, but for businesses. Andrew Yeah. Yeah, yeah. And there's obviously lots of new banks out there.

We've got neo banks, we've got challenger banks out there in the market. what do Tred provide along with the sustainability and the better for the planet? What do you guys offer beyond some of the other providers? Will Smith Yeah.

So, so what we found is a couple of different things. So what one's obviously the sustainability side, but actually I would say 95 % of our customers are coming from high street providers. So, you know, your Barclays, your HSBC, and what they find is that they feel a bit forgotten because unless you are the size of Tesco's or, you know, PWC or something massive, they, they, don't really invest in you they don't really care. So people are starting to feel.

a bit more like a number rather than a business. And so what you found is personalization and actually having a person to speak to is so instrumental. And so that's kind of one of the key things. you we offer everyone, I meet every, me or Pete meet every single one of the customers that we onboard.

They can put a name to a face and that seems to really resonate with a lot of customers. So there's a personal element and then also just the technology. legacy providers have legacy systems. I mean, in the current account space, I'm sure most people will have either a Starling or a Mondo, but in the business world, it's actually very rare that you have that same user experience.

And it's just clunky. Great example, I was speaking to someone the other day, they were banking with a provider, they didn't give them a debit card. Everyone needs a debit card. And then I don't know if you remember, you remember the little PIN sentries that some people used to use?

Andrew Yeah. What? Yeah, I had my business accounts with Barclays and I could never access my business account. It was always my finance people.

I could never find the PIN sentry machine. So I couldn't get into any of my own business accounts. It was mental. And then you try and get a new one from them and they won't send you one out until you return the old one.

It's bonkers. Will Smith It's stuff like that, to the normal person, it just seems pretty archaic. And so we're finding that obviously the sustainability is a big thing, but just simple usability and prioritizing the features that people want, know, making sure that you can give your payees a nickname. So we pay people, we pay three or four different accounts for different reasons, all for the same business.

I'm trying to remember the sort code and account number of the right one that you're trying to pay is a nightmare. So just look, it's just really basic things that people are wanting that the big providers just don't do. So one is the technology, two is that the personal approach. And then the other one is the sustainability side of things as well.

Andrew Yeah. Yeah, cool. I think on top of this, and I was going to ask you about at the beginning of the conversation, we spoke about obviously banks using your money without you knowing to fund things like fossil fuel projects. I was going to ask, how does Tred kind of make sure that doesn't happen?

I think that'll probably then come back to your carbon accounting products. And that would be part of that. I'd be right in thinking. Will Smith Mm.

Yeah, so the stat that I love is that 153 million pounds every single day is invested by the big five providers in the UK into fossil fuel projects, which is just an eye-watering amount and it's absolutely staggering. That money is from money held in current accounts. Trader takes a slightly different approach, which is we don't touch customer funds. So it is sat in a separate ring fence account.

We do not loan it to anyone. But what that means is two things. There's two benefits. One is that your money's always there when you need it, because if there's a run on the bank, sometimes they've loaned out all your money and so you can't get it.

Hence why the bank passes. And then the second thing is because it's just sat there and we can guarantee that it is not invested in harmful industries. And so it's always there when you need it, however much you have in it. Andrew Yeah.

Yeah. Will Smith it's always there for you when it's needed and that's you can guarantee that it's not into harmful industries. Andrew Yeah. Yeah, cool.

And then when it comes to the element of being able to report things, this is what the carbon accounting product is for. And actually, there are lots of businesses out there where this is their kind of sole business function. So the fact that you've actually added this into your account is quite the achievement. So just talk a little bit about how that's utilized and how businesses are using it.

Will Smith Yeah. So when you're our, so our product is perfect for, you know, typically less than 50 employees. And it's really difficult to just get on with running the business and like it's day to day. And it's really difficult to dedicate resources to calculating carbon footprints.

And what we've developed over the past four, four years is that spending data is the most holistic way to calculate a carbon footprint because it, we know where you shop. Andrew Yeah. Will Smith It knows how much you've spent, know, the vendor, you know, the location, all of that metadata can then be used. We then push it through our algorithm that says, okay, well, we've spotted you spent this much in a fuel station.

Okay. We know the carbon footprint of that. You spent this much on flights. This is what the carbon footprint is.

And what it does is it automatically does it. So instantly with no resource attached from a business point of view, we can then tell you what the carbon impact of that transaction is. Andrew Yeah. Will Smith There are new elements that aren't captured by spending, is employee commuting, working from home now post COVID.

Andrew Yeah, that's an interesting one. Everybody's got the heating on all day. Will Smith Well, well, and so everyone has to commute into work as we build additional tools that sit alongside that to do it. And what the benefit for businesses is that instead of paying, you know, consultants to do it, is absolutely perfect for reporting on scope one, scope two, scope three emissions.

And then the thing that we're just releasing at the moment is sort of an automated report that says, here are your biggest emitters, here are the biggest like categories, so is it travel? Andrew Yeah. Will Smith Is it, know, computers, et cetera. And then we can then start giving you an action plan to say, here are the vendors that we recommend.

This is what you should be doing about it. And for a lot of use cases, so whether it's, you know, grants, it's certifications, it's B Corps, that that's a really helpful and, and basically an automated way of you getting that, that, that process hasn't been a lot, hasn't been easy to get to that point. A lot of development, but businesses really resonated with businesses. Andrew No, I can imagine.

Yeah. Yeah, and I think alongside the reporting piece, there's a real opportunity for actionable behavioral change as well, because if businesses can get that report and break it down on an employee level, there's, well, there might not necessarily be a financial benefit, actually, the social impact that a business can make, they're then able to manage or encourage their employees to behave in a different way. So I think that's Will Smith Mm. Andrew surely a byproduct of that.

Will Smith It is. And one thing we're actually looking at at the moment is almost like employee benefits as well, which is we know that the carbon emissions are from, you know, staff entertainment or whatever the thing is. And we're starting to look at partnerships now that say, actually, here's a benefit you can give to your employees that will reduce your business's carbon footprint, but also has a financial benefit to the the individuals. The other side is that actually just by moving your money to Tred, Andrew Yeah.

Yeah. Will Smith there is a saving of carbon because you're not holding it with fossil fuel funding banks, you're holding it with Tred instead. And what we're actually finding is that sustainability is becoming more and more sort of the norm way of business. But what we found is that people are using it as a really good use for growth because they're looking to stand out in a crowded market.

And so more and more are turning towards sustainability. So instead of it being, we do this thing. Andrew Yeah. Yeah.

Will Smith and we have a sustainability agenda, it's becoming part of that brand which helps attract more clients. It helps win more government tenders or whatever the thing is. And so it's not just better for the planet, it's also better for businesses, what we're finding. Andrew Yeah.

Yeah, yeah, all really good points. And as we kind of reach a conclusion on our chat today, we always like to give our listeners some key takeaways. So we'd like you as a guest to do that. So what three key takeaways have you got for our listeners today other than to switch their bank to Tred?

You're welcome. Will Smith I wasn't going to say it, but thanks for the plug. So I think there's kind of three takeaways, is, green finance isn't just possible, it is such a powerful business tool. I just know in 30 years time, green finance is going to be the norm, whether it is mortgages, loans, credit cards, and now is the time that actually it's being used as a beacon of Andrew Yeah.

Will Smith you know, a beacon and a way of attracting customers. so customers are looking for sustainable partners, companies are looking for sustainable partners, and switching your current account is one of the most impactful but easiest things to do to improve your sustainability credentials and start that journey towards a greener business. That'd be number one. Two is embracing change and the opportunity to take slightly different directions.

And we set out on the journey. we thought we were going to be a consumer facing current account. Quickly learned that businesses have a bigger impact and they were using our products more. And so it's the, if there are things that are screaming you in the face, it's make sure that you take the direction when you take it because it might well be the right choice for you.

And instead of resisting, it's kind of taking that on board. The other one is then partnerships are key. So, Andrew Yeah. Will Smith We have not built this product on our own.

have had, we partnered with MasterCard. We've partnered with lots of different providers. And I think that's crucial to both customers success, but also success as well. So there is a bit of a shower other than opening a, tread account.

any listeners listening and want to reach out for either partnerships or wants to have a chat to me about the start of the world or what accounts do, then please do just reach out on LinkedIn. Andrew Yeah. Will Smith Find me under Will Smith and then it's at Tred, which is T-R-E-D rather than Tred with an A in it. Andrew Cool, brilliant.

Look, I've really enjoyed the conversation today. It's been really interesting to find out about the business and obviously the impact that other people can make. I've got one last question before we go. And that is, how do you hold the record for the world's fastest tree?

Will Smith You said you weren't going to put me on the spot. So early days we wanted to come up with creative ways of marketing. Andrew A bit of Gorilla Will Smith Bit of grill up and we have done everything. So we've done jet washing this.

I don't know if you've heard of clean graffiti. Andrew Yeah, yeah, where you put a template on that. Well, I've seen it actually where you put the template on the pavement and then you jet wash it in. yeah.

Will Smith Yeah, so we've done jet wash stencils. But the other one was I actually got a space on the London Marathon about three years ago, and I've always wanted to have a world record. And so we decided that I would run the London Marathon in a 10 foot high, unmissable tree costume with tread blazoned above my head. And so yeah, so it got us on the BBC.

It got us on ITV. It got us on so many news outlets. Andrew Ha Brilliant. Will Smith But yes, I also then broke the world record for the fastest marathon in a tree costume.

Andrew Can you remember what time you got? Will Smith Yeah, I did it just at just over four hours and the thing. Well, if you, I thought it was so warm. It was so, so, so hot, but yeah, it was one of the toughest things I've done and everyone else was cheering me on, but it was amazing marketing.

was a, yeah, it went down. It went down well on the social media. Andrew That's very impressive Yeah, brilliant. Cool.

Well, thank you very much for your time today. I've really enjoyed the conversation. We'll catch up soon. Bye.

Will Smith Great stuff, thanks so much. Cheers, bye. Andrew Thank you very much for listening today. We hope that you found the byProduct Podcast valuable, useful, and informative.

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