SME Banking Conversations: Katalin Kauzli (CharlieIndia)


With this first episode of SME Banking Conversations with Olena Gryniuk, we are launching new series of inspiring interviews on SME Banking, digital transformation, and people making the innovations happen in the industry!

The recording of the first episode took place in March in Budapest, Hungary. Olena Grynuik – CEE Regional Director at SME Banking Club, conducted an exciting interview with Katalin Kauzli – co-founder & Business Development Director at Charlie-India, and the main ambassador of the e-invoicing implementation in the CEE region. Olena Grynuik, together with Katalin Kauzli, discussed the implementation of e-invoicing for business customers in Hungary and other countries in the CEE region, as well as challenges and regulations, competitors, Charlie-India`s activities, projects, and plans.

Listen to this conversation on our SoundCloud channel:

Olena Gryniuk: Now we’re in Budapest, your city, and the city of Charlie-India’s office, where you’re a co-founder and business development director. How everything started?

KK: We met with Peter (ed. Malaczko) back in 2014, he already had an online invoicing solution and already had been working together with the IT team for several years. I was at that time a freelance consultant. He wanted to have a business evaluation. And a common friend connected us. After that, we started talking. I did the evaluation. He already had the idea of connecting e-invoicing and banks. We were very lucky to meet OTP Bank at the very right time because they were doing such a solution in which our solution exactly fit. This project is known as OTP eBIZ today. And then when the project was finished and then we decided that we would build a company around the business case. In 2017 we went to New York to watch Finovate Fall and then we decided we would be back on stage. That’s all how it started.

OG: We will talk about OTP eBIZ and your implementation there, but before let me ask you how does your teamwork looks like: how do you divide the responsibility with your co-founder Peter, and who is the heart and the brain of your team?

KK: Peter is an IT guy, he is responsible for all the IT colleagues, who are all the colleagues, except me, he has a product vision. We also have a CTO, who is responsible for the practical implementation of Peter’s vision. And I’m myself is responsible for marketing and business development activities. Then we think about strategic issues and product development issues. We do brainstorming, always brainstorming together, and we inspire each other. All the team members are committed to what they’re doing. Everyone is very enthusiastic and puts the best what they are capable of. This is how the teamwork looks like. I would say there is no single mind, no single heart in Charlie-India, it’s more like interconnected minds and hearts together that make up the company.

OG: Cool! Now let’s get back to your solution because you implemented it in Hungary with OTP Bank and Budapest Bank, which are the biggest ones and have the main part of SMEs in the country. Your solution gives the opportunity to exchange invoice data between banks, this is an interoperable ecosystem. I have 2 questions here because this is a very unique solution: how long did it take you to implement in these two banks? And which advantages these banks see and promote after they implemented?

KK: We implemented two projects with 2 years of difference. OTP project started back in 2016. Firstly, that was a pilot project or prototyping project. And after that, it was an actual project, and this actual project from the start till the market launch of MVP took four or five months. After that, we still supported OTP and eBIZ team with the additional features. But after that babysitting period, it became completely independent, so they are maintaining their solution right now. We started a Budapest Bank implementation in 2018. The Bank had a different approach to the project than OTP, it was a longer project. The product launch was in 2020, so it was one and a half years eventually. And about e-invoice data exchange. We implemented our solution in both banks independently of each other. And our technology ensures that the banks can exchange invoice data without being integrated with each other. Back then this was a very unique solution, in a way it is still a very unique solution now. But in 2018 Hungarian Tax Authority brought the regulation of continuous transactions control, which also ensured, de facto standardized, the structured data exchange between any counterparty. This is already implemented by the majority of ERP softwares. Hungary is very advanced in that respect, similar to Italy. And there are also regulations coming in Europe and worldwide.

OG: Creating such kind of ecosystem requires engaging a lot of people, not only banks but also governmental organizations, tax authorities, etc. Was it difficult for you? And was it simpler for you to implement in the Hungarian market because of the regulations?

KK: Before the regulations came, we approached accounting software providers and online invoicing service providers with our concept of interoperability. And generally, they were not really very open to it, because of the integrations effort they should have done. They didn’t see actual benefit from the connections. On the other hand, this completely changes, because everyone was forced to do it because of regulatory compliance. After that really the situation changed. Invoice data is available, it can be exchanged between the parties, but also data can also retreat from tax authority systems. So, yes, when you don’t have the regulatory push it’s very difficult to convince other players to do the work, but once the regulatory push is there it just becomes evitable, it must be done. On the other hand, for someone who implements our technology, it will be very easy for them to enter into the world of interoperable e-invoicing, it can be done in Hungary and in any country in the world.

OG: Yes, and who will be the first grabs the market.

KK: Absolutely, that was a very huge experience in the Hungarian market, when the first-mover advantage is really important in this field.

OG: When do you predict other countries will implement e-invoicing for their business customers?

KK: Yes, regulations are coming everywhere. In the next 2-3 years, I think, most of the countries will bring the regulations, even those who don’t have them on the map yet. In Europe, Italy and Hungary already implemented e-invoicing mandates in 2018. Gradually it is coming this year in Serbia, in Poland with a gradual roll out from this year, Slovakia – this year, Bulgaria – next year, France will launch the e-invoicing from 2024, Belgium – next year. It’s really coming everywhere. So, a lot of things will happen in the next 2-3-4 years. And because of the regulations both, large and small companies, need to pick a solution. And that’s why we’re promoting our solution for the banks because they are the players who can really effectively onboard SME customers, they can solve the solution of regulatory compliance and also take the burden of daily financial administrative tasks from the SME shoulders.

OG: This will concern both businesses in B2B and B2C sectors, right?

KK: Yes, regulations can differ by country, but the regulations are extended to all B2B relations, and in some cases – B2C relations as well. In some countries B2C relations will be done in the form of e-reporting, so not the invoice data should be submitted, but aggregated data set must be submitted to the Tax Authorities.

OG: Let’s talk about the advantages and challenges when implementing e-invoicing. I do see a lot of advantages both for the SMEs themselves and for the banks. For the SMEs, of course, this is the automation of their daily job, and not also issuing the invoices but also receiving the invoices from the counterparties. And as you have it – for example, I receive the invoice from the counterparty it’s automatically added to the system, and I can pay it in 1 or 2 clicks. This is just a fairy tale! And for the banks, there are a lot of advantages, and probably the main one is having invoice data and payment data, many banks also started implementing online accounting as well, so having all the data on the customer, they can finance them and less risky, faster and more automated way. So, knowing all these advantages for both parties, what are the main challenges do you see when implementing with the banks?

KK: I think the very first challenge for the bank is to decide that they want to get into this e-invoicing space, because it’s a non-core offering for the banks at the moment, it’s a huge step. But once they arrive at the point that they want to do it, the main challenge is rather the nitty-gritty of the product that they are not invoicing experts, they need assistance on how to do customer journeys, how to define really the solution so that in the need it’s a good solution. By far the most important thing is to make the decision to move to that online invoicing space. And just to understand that from the customer perspective, this is one problem, and if they package invoicing and banking together then they can really provide a blockbuster offer for the SME sector.

OG: How big team is required in the bank to start and keep this project alive?

Depending on the scope of the project, the banking side team can be anything from 7-8 people to 15—20 people, but it really depends on the scope of the project.

OG: Do you have competitors here on the market?

KK: I would say, we don’t have direct competitors who would have had the same concept and the same technology solution. However, who can be treated as competitors for us: one is the in-house development of the bank itself. The bank might decide to do the online invoicing and develop it in-house with its own team. What can also happen is that they acquire a team that has already built an online e-invoicing solution and then they integrate it into the bank. The other strategy of the bank can be when they team up with the third-party solution provider, and they do it as a partnership together. In this case, the bank doesn’t really have a customer-facing application, it is on the service provider side. We think it’s better for the bank to do it in-house or to keep the application in-house and package it together with an online or mobile banking application.

OG: What are your plans for this year?

KK: Oh, we have a lot of plans! As we discussed already, e-invoicing regulations are coming everywhere. Of course, we keep up approaching banks as our main target segment. But with all the regulations coming we decided to open source some of our software assets so that developers and software companies all over the world can join the world of interoperable invoicing. We specifically develop solutions for the French market. We’re members of the US E-invoicing Interoperability workgroup, there is a pilot going on. Obviously, we’re following closely the developments in Poland, Serbia, and all in Central Europe. But our future solutions will be really unique in a way that it will be very easy for any kind of less experienced developers to get connected to the e-invoicing, local tax authorities, and even to set up an e-invoicing solution. We’re working on that. We have a new pet project as well – we’ve just started experimenting with blockchain invoicing, and what invoicing can mean in a blockchain environment.

SME Banking Club thanks Katalin Kauzli for participating in our new project and for sharing her experience and other useful information with the audience!


Watch the conversation below: