The first bank in the UK opened in 1650, and whilst the basic principle of ‘keepers of cash’ still applies, they’ve innovated over centuries to be of significant value to business. Sean Williams, the head of regional customer banking for Clydesdale and Yorkshire Banking Group, explains to BQ’s Suzy Jackson what this looks like in 2018.
The banking landscape is changing, Sean says. “It’s continually evolving. We need to adapt, be creative and nimble in terms of our delivery approach in considering the future under Open Banking, which is set to redefine and potentially revolutionise mainstream banking as we know it.”
Open banking is a step change in how banking is conducted in the UK. The new rules state that banks must create open APIs, so that customer data can be shared with authorised third-party applications in a secure, common and consistent format. At CYBG, the team is embracing the principles and investing in new ways to improve the service they offer, particularly to their business customers.
“Customer demographics, their needs and buying habits are constantly changing,” he tells me. There’s evidence of customers using branch networks less and we’re having to adapt to meet the needs of the future, tech-savvy generation, investing heavily in technology that combines ease of access, with better decision making, enabling customers to take greater control over their finances.
“The status quo across UK banking is being challenged and we believe that success in the future will be defined by our ability to connect data and customer insight, continually innovating and developing customer-inspired propositions and technology, that together create a truly personalised banking experience. Customer choice is around having access to financial services at their fingertips, at their convenience 24 hours a day, so banks have to remodel their propositions, and evolve to facilitate that superior customer experience.”
CYBG is the owner of the Clydesdale Bank, Yorkshire Bank and its digital brand, B, and is a bank with a long history. It was demerged from National Australia Bank at the beginning of 2016, determined to combine its strong foundation and community roots, with new ideas to better serve customers and to attract the next generation to bank with it.
The bank has been supporting the UK economy for almost 180 years. In that time, the conditions in which it operates has seen significant change, and they’re working hard to adapt in order to build competitive edge and to growth their UK franchise. Now an independent Banking Group with a strong personal customer base and a business banking capability through a UK-wide network, there has been recent commitment to a £350m investment programme to deliver the bank’s digital aspirations.
CYBG has created a platform called iB, which enables the bank to integrate and connect to FinTech partners, while also providing big data insights that help customers make better decisions and take greater control over their money. It’s taking major strides in transforming CYBG into the UK’s leading digitally-enabled challenger bank, positioning itself strongly for the future banking landscape.
Sean adds: “Our iB technology platform is ready to explore Open Banking with full ‘plug and play’ FinTech capability, meaning we can offer real-time, integrated services for our 2.8 million customers. We are making significant advances in our customer and digital capability - from launching innovative technology such as Selfie ID, cheque imaging and introducing a market leading e-lending solution for SMEs, with decision making typically taking place in around 10 minutes. And there’s much more to come through 2018”
Unlike anything else on the high street, CYBG’s concept ‘Studio B’ innovation hub, in London, enables collaboration directly with customers and other interested parties on the design of future banking products and services, with the best ideas showcased and tested with colleagues, customers and members of the public – all alongside a fully functioning bank.
Designed to encourage the next generation of customers to shape banking in the future, Studio B is an important part of the Bank’s strategy through combining its history of local relationships with world class technology, providing a platform to develop new ideas and gain inspiration from customers, early adopters and from across the business community.
More recently, the launch of the Bank’s B-Tox Challenge attracted national attention through a high profile event with top consumer media and influencers getting involved with the campaign and kicking off the Bank’s theme to get the UK financially fit.
In fact, they’re applying the principles of innovation discussed throughout this report to their growing banking business. But for them, the customer remains at the heart of the service they offer; listening to their feedback and responding through building centres of excellence within their customer service teams, enhancing the retention process and making it easier to switch products.
“We talk consistently about the customer experience and constantly test our delivery.” Customers may want to interact with us in a number of channels. They may apply for a product or a service online so we need to have the infrastructure but follow up with a telephone conversation, or complete the transaction in person at one of our customer banking centres. We need to have the capability to seamlessly move from channel to channel. The value is in a slick, effective delivery experience for our customers, providing them the service they want, when and where they want it.
CYBG is committed to increasing its support to help businesses invest and grow, particularly in its core areas of Scotland and the North of England. With its roots in supporting businesses of the North, its belief is that no bank is better placed to help drive economic growth in the UK regions.
The Bank is helping to fuel the growth of SMEs across the Midlands, North of England and Scotland through its lending programme. Last year, it committed £6bn of new SME lending to businesses over three years. With over £2.1bn of lending committed over the last year, CYBG’s target is well on track.
Sean continues: “We are committed to working with SMEs in the North of England, ensuring they have the support and funding they need to grow and develop, to reach their full potential.”
“We are developing strategic partnerships across Manchester and the North West, for example working collaboratively with the Growth Hub on the Innovation100 programme and are looking to further align with the University of Manchester to support scale up businesses needing mentoring support. We are also forging ever closer links with our civic leaders and key regional influencers, believing in a strong public and private partnership.
“Most recently, we demonstrated our commitment to the region by joining the Northern Powerhouse Partnership Programme as a key strategic partner. This underpins our belief that the Northern Powerhouse represents a significant opportunity for businesses to unlock the economic potential in the area and bridge the earnings gap with the South, through working together to one pan-northern agenda.
Sean continues: “We believe passionately that SMEs are our future lifeblood in terms of delivering economic growth and prosperity as well as attracting the infrastructure and wider investment capital to support the rebalancing of the regional economies, building skills, retaining talent and driving productivity. All of this is an opportunity we cannot pass up.”
Innovation is flourishing across the Northern Powerhouse, in all its forms, and CYBG is working across the spectrum to support SMEs, who are investing for growth and scale. “Innovation, to me, is a business constantly looking to evolve,” says Sean, “to be more creative and improve efficiency and productivity through small step-changes, listening to their customers, their staff and supply chain.
“Through the Innovation100 programme, it was inspirational to see the thought processes and practises that harness the collective, creative energy across businesses in Greater Manchester and spanning a diverse range of sectors and industries. Big and small - I was blown away by the foresight these business owners have in looking to constantly evolve their propositional thinking and in seeking out ways to maximise their competitive positions.”
At CYBG, the appetite for supporting innovation is strong, with the Growth Finance team just completing its second successive record year. Headed up by David Hayers, his team has been helping scale-up businesses to borrow money based on the quality of their equity backing and the extent of their intellectual property (IP).
IP is often a key asset of a fast-growing, early-stage business, but it is nearly always overlooked by lenders. Companies may have invested many hundreds of thousands or even millions of pounds into developing their proprietary software or patenting a product or process that gives the company a competitive advantage. Yet, when it comes to securing finance, most institutions will look to tangible assets or even personal guarantees to secure a loan.
Rarely will the CYBG Growth Finance team see a business that has any significant tangible assets.
Instead, the team consider the growth trajectory of the company, the extent and depth of the equity support and the nature of the IP. This approach can unlock a vital source of funding for these high-growth companies and taking on debt can often provide an attractive alternative to being further diluted through a new equity round.
Whether the innovation is bold and audacious, or small and incremental, CYBG is supporting those firms making advances as it continues to transforms itself – for its customers, and for the North.
Sean added: “We recognise that the funding landscape for SMEs can be complex and confusing at times and we’re striving to ensure our teams are skilled and knowledgeable, as well as being on hand to help businesses owners navigate their way through the myriad of options out there - building ecosystems that ensure management has access to the best support and finance, at the right times.”
Focus on: ResponseTap
Clydesdale and Yorkshire Bank’s Growth Finance team client, ResponseTap, is accelerating their growth plans with a £3.5m funding package from the bank.
The business to business Software as a Service (SaaS) firm, established by founders Ross Fobian and Richard Hamnett, are leaders in Call Intelligence, allowing their clients including British Gas, Hiscox and Virgin Money, to manage their end customers’ user experience, from websites to phone calls via call centres.
Call Intelligence provides real-time, actionable insight into what makes the phone ring, for marketers to optimise campaigns and call centres to maximise the value of sales. If the phone is an integral part of a customer’s buying journey, then make every call count.
ResponseTap came about over a few beers in a university bar, and a conversation between Ross and Richard about the disconnect between online and offline customer journeys. Within two years, they had launched their campaign level tracking project, the first in Europe to be integrated with Google Analytics.
A further two years later and visitor level tracking was live, the business had 100 customers and ResponseTap had joined the Telegraph’s Tech Start-Up 100 most promising technology start-ups in Europe. Today, the CYBG client has 80 staff, 50 new customers every month, offices in London, Manchester and Atlanta, and billions of web visits, phone calls and associated transactions processed every day.
Ross said: “Since 2008 ResponseTap has been pioneering visitor level call tracking. Heralding many industry firsts, including integration into Google AdWords and Google Analytics, the business continues to grow with innovation at its core.
“Our team of customer success managers listen to our customers, so that our teams of product managers and developers can then act on their requests or suggestions. This starts from the top of the business through our co-founders, and trickles down across the business, inspiring each employee to be an innovator.
“The business has developed a modus operandi that has removed silos and fosters creative thinking to help differentiate our product from our competitors.”
ResponseTap has more than 2,000 customers, providing analytics on more than 1 million calls per month. The firm has already raised more than £5m in venture capital through Eden Ventures and Beringea.
Ross added: “The last few years have been incredibly exciting for us and we’re hugely appreciative of the support we’ve received. We’re in a fast-moving industry, and it was vital to know we had a banking partner who understood our vision and plans. We’re focused on growing the business and this new funding will enhance our ability to invest further.”
The deal was delivered by Usman Ali from Clydesdale and Yorkshire Bank’s Growth Finance team, a specialist UK-wide team that provides senior lending for innovative and rapidly expanding businesses with strong software and intellectual property assets and existing venture capital.
Usman Ali, director of growth finance at Clydesdale and Yorkshire Bank, said: “Ross and Richard have built an incredible business in a short space of time, delivering state of the art solutions for some of the UK’s biggest companies. It’s extremely rewarding to have the opportunity to partner with such an innovative and ambitious firm and we look forward to working with them as they continue to grow.”