How we got into “RegTech”
By Prof. Adam Beaumont
In 2002, I’d just made my first “platform tech” money from building one of the first domain name scaleups in the UK. I realised that in the dot com goldrush, the best thing was to sell the shovels AKA the domain names and hosting, so that’s what I did. However, I realised that the industry was being rapidly commoditised, so I looked to invest in the next “thing” – which I felt was Voice-over-IP – or IP telephony. At the same time, we’d also invested heavily in SMS messaging – so I was juggling the go-to-market of an SMS API based messaging service – which was simple and unregulated, with the challenges of going to market with a regulated telecoms service to provide IP telephone numbers to the ISP community. The latter was unexpectedly more difficult.
However the epiphany was the business model. Unlike domain registration, where you would buy a domain for £5 for 2 years from Nominet and sell it for £10 for the same period: If you can build the infrastructure to be a Regulated Communications Operator (which cost us a few million at the time), you could be “allocated” numbers by Ofcom and you could sell them to end users, or to resellers. A business model with a largely fixed up front cost (and a barrier to entry), but with great annuity revenues.
So that’s what we did. We built the technology and network. Our route to market led us to choose to deal with partners and resellers rather than the end customer. So – for the last 15 years, we’ve been the suppliers to dozens of national and international award winners as the unknown engine who’ve made this happen for our clients -we’ve focused on good engineering and reliability which is paramount to ensure that “phone stuff just works”.
The two transformational moments for aql both involved automation in addressing key challenges in entering a new technology domain.
Challenge one was – how to apply for phone numbers in every town, city, hamlet in the UK… ? We wrote a script which grabbed the data from the Ofcom website, worked out which number plans were free, created the right Ofcom forms as PDF’s and sent them to Ofcom – completely automated. We ended up with 650 area codes and millions of numbers.
We then needed to solve other challenges. Suddenly – we’d enabled many of the UK ISP’s to provide broadband voice (ie voice over IP business telecoms) to their customers – including huge callcentres to small businesses. We’d also enabled B2C channels – such as some of the largest consumer broadband operators in the country. Many hundreds of thousands of businesses use our numbers, many without knowing. If you google for “network lookup” – we have a tool which tells you who-owns-which-number – and you’d be surprised how often it’s us.
Getting to market meant getting our Regulatory (with a capital R) compliance right. One of the challenges which came from the Regulator was – how do you address 999 calls ? – A newly-created “General Condition 4” defined the obligations to make sure that it was possible to call emergency services and also, wherever possible, the blue light responder could find them at an address. (or – equally importantly – know that it could absolutely not find them at an address – ie they were a nomadic user of voice services over the internet). We then realised we had a serious obligation – a real risk of sending an ambulance to the wrong address. We needed a way to ensure that internet phone users were flagged as such and those working from fixed locations could update those locations. This compliance had to be automated – we had to create “RegTech” to do this.
We wanted to build a service which allowed our resellers to sell our phone numbers as if they were their own, where we sit, hidden in the background. To do this, we created a series of API’s – interfaces for software developers, so our systems can be integrated seamlessly into many other partners’ systems – a business model which aql uses extensively (we have API’s for almost everything to do with telecommunications).
So – we solved the problems – How to sell phone numbers to end users – and make sure that ourselves, the resellers and the end users were compliant. Not only did we host our own phone numbers, but we worked out how to host millions of phone numbers for other operators and ensure their compliance and that of their users.
Unwittingly we built one of the largest “RegTech” platforms on the planet – a platform which assured regulatory compliance whilst allowing agile issuance of numbering and enabling startups with communications services, including one of the largest wholesale 999 emergency services address databases in the country. We have API’s allowing our partners, resellers and end customers to update their details in real-time. We have API’s to allow our partners to search for and order and activate millions of numbers in a matter of minutes.
What marks success for me, is that as a wholesale operator, we see many of our partners winning awards for their telecommunications services and we can quietly pat ourselves on the back for providing the engine which powers their services. This is the aql model – we are the hidden enablers, providing the engine which allows innovators to get to market faster and to scale-up seamlessly. What fires up our team is seeing a small customer scale up and become a household name whilst “powered by aql”.
These days, we’re also the largest operator of SMS-enabled inbound numbers, powering the two way SMS market, which dovetails with our voice offering perfectly. But we’re not standing still. Telephone numbers are not quite a thing of the past, but they are questionably also not part of our future. More on this to come!