bcsg overview
TRANSCRIPT
BCSG IntroductionSeptember 2012
Agenda
1. Business Centric Service Group (BCSG) Overview
2. The small business sector: an under-served opportunity
3. The BCSG approach – and overview of some BCSG solutions
4. Case studies
5. Indicative timelines
1. Business Centric Services Group (BCSG) OverviewSeptember 2012
Established and proven We support over 150,000 small businesses worldwide
We understand small businesses and Financial InstitutionsSole focus on delivering innovative propositions to the small business clients of financial institutions
Breadth of capabilityFull service across technology, operations, support, training and marketing
Full service provider of best in class, small business products and services
Clients include:
Company History:
Established 2005 SaaS focus since 2010 Headquartered in London 100+ full time employees
Partners include:
BCSG Overview [1/3]
We have recently won…
Been shortlisted for…
And been featured in…
Key staff experience is unparalleled:
Inception and growth of Barclays Bank SMB innovation to £30M revenue
Recent delivery of innovative SMB service across Royal Bank of Scotland/ NatWest Group
Core competencies across product development and sales channel enablement
Specialists in developing IT platforms that provide cloud-based services to thousands of small businesses
Australian, New Zealand & Asian Managing Director has a track record in driving growth and productivity in the underserved small business and NFP sectors in the UK, Asia and Australia
BCSG Overview [2/3]
Focused on International Growth:
Strong pipeline of overseas FI clients in US & Europe and looking to establish banking client in Australia by end 2012
BCSG Overview [3/3]
2. The small business sector: an under-served opportunity
September 2012
The problem of non-consumption
01 Small business (<$2M annual revenues) owners are time poor and often don’t use the tools that correlate with success
- 53% do not use financial management software
- 49% have not created a website- 71% of micro business do not have a web presence- 40% have not created a formal business plan
- 70% are not credit checking their customers- 94% have late payment problems- 9% of all small business are negotiating late payments
02 More than 46% of small businesses fail within the first 4 years. Key reasons are: - Failure to control cash, manage cash flow
- Poor planning and insufficient marketing- Inexperienced management- Lack of cash cushion
03 Existing small business solutions are considered confusing, costly and complex
Australian Gov. Department of Innovation 2011
Sources: NAB, Intuit research, PKF Research, dnb
The Smallest Businesses Represent the Largest Volume Opportunity
Source: Australian Gov. Department of Innovation 2011
1,306,000
740,000
81,0006,000
Micro Small Medium Large
0 employees 1-19employees
Number of business in Australia by size calculated by number of employees
There is a broad macro opportunity for banks to take a leading role in helping micro/small business be less reactive and more proactive in ensuring their success.
New eco-systems emerge as industries converge
New start-ups and big players with deep pockets are all trying to get into this space and they are focused on addressing the barriers to non-consumption: cost, complexity and relevance
3. The BCSG approach & solution examplesSeptember 2012
LendingLending
FeesFees
DepositsDeposits
Value/Volume Margin Impairment
Value/Volume Margin Impairment
Value secured for lending
Value secured for lending
Start-upsStart-ups
Switchers OutSwitchers Out
Cease TradingCease Trading
Switchers InSwitchers In
Customer Stock
Customer Stock
AcquisitionAcquisition
FundingFunding
OperationsOperations
Value Map – (Small business banking on a page)
RevenueRevenue CostsCosts ValueValue
Account fees/ Tariffs
Merchant Fees Transaction Fees Referral sales Other NII
Account fees/ Tariffs
Merchant Fees Transaction Fees Referral sales Other NII
Marketing Account Opening Selling Costs
Marketing Account Opening Selling Costs
Account servicing Tech investments
Account servicing Tech investments
Paid on deposits Wholesale markets Government
Schemes
Paid on deposits Wholesale markets Government
Schemes
LendingLending
FeesFees
DepositsDeposits
Value/Volume Margin Impairment
Value/Volume Margin Impairment
Value secured for lending
Value secured for lending
Start-upsStart-ups
Switchers OutSwitchers Out
Cease TradingCease Trading
Switchers InSwitchers In
Customer Stock
Customer Stock
AcquisitionAcquisition
FundingFunding
OperationsOperations
BCSG Spheres of Influence
RevenueRevenue CostsCosts ValueValue
Account fees/ Tariffs
Merchant Fees Transaction Fees Referral sales Other NII
Account fees/ Tariffs
Merchant Fees Transaction Fees Referral sales Other NII
Marketing Account Opening Selling Costs
Marketing Account Opening Selling Costs
Account servicing Tech investments
Account servicing Tech investments
Paid on deposits Wholesale markets Government
Schemes
Paid on deposits Wholesale markets Government
Schemes
PRIMARY INFLUENCE SECONDARY INFLUENCE NO INFLUENCE
LendingLending
FeesFees
DepositsDeposits
Value/Volume Margin Impairment
Value/Volume Margin Impairment
Value secured for lending
Value secured for lending
Start-upsStart-ups
Switchers OutSwitchers Out
Cease TradingCease Trading
Switchers InSwitchers In
Customer Stock
Customer Stock
AcquisitionAcquisition
FundingFunding
OperationsOperations
Key Themes
RevenueRevenue CostsCosts ValueValue
Account fees/ Tariffs
Merchant Fees Transaction Fees Referral sales Other NII
Account fees/ Tariffs
Merchant Fees Transaction Fees Referral sales Other NII
Marketing Account Opening Selling Costs
Marketing Account Opening Selling Costs
Account servicing Tech investments
Account servicing Tech investments
Paid on deposits Wholesale markets Government
Schemes
Paid on deposits Wholesale markets Government
Schemes
1
2
3. Increase Lending Income
3
4
5
6
1. Improve Acquisition 2. Improve Retention
4. Increase Fee Income 5. Reduce Cost of Acquisition 6. Reduce Operational Expense
Packaged Solutions to Support Successful Business Practices
September 2012
Single sign on portal Access to all your business tools from one place
Business Hub – Solution
Customizable selection of software and partners
Bookkeeping
Business Planning
Legal Manager
Data Backup and Storage
Website Builder
Business Hub easily re-branded: Our Current Partners Include:
…and many more
Benefits to the Small Business Customer
Access solutions for significantly cheaper than if purchased on their ownEasy to use. Each component has an intuitive interface and single monthly bill and one username and password rather than dealing with multiple accounts
Flexibility to scale up as business grows
Save money on professional advisers – self-service on basic tasks and only pay for advice on most complex, specialist issues
Access from anywhere, share easily
No upfront costs to purchase hardware or software
Always have the latest version / free upgrades as new trends or functionality develop
3 Key Values Easy to use credit management tool
Specifically built for small businesses
Search for customers quickly and easily
Credit scores and payment performance clearly presented and explained
Monitoring Emails
Instruct Debt Collection with 1 click
CreditHQ easily re-branded:
CreditHQ– Solution
Our Current Partners Include:
60% of small businesses extend trade credit to customers, of them: 94% have late payment problems Bad debt is estimated to cost them $thousands each year
42% of small businesses say that getting paid quickly is the key issue keeping them up at night
70% of small businesses are not credit checking their customers because of cost and complexity
Sources: SBA. June 2010 data point and surveys, Proprietary primary research of small business owner managers (n = 453), Survey by Decipher, Inc. for Intuit
01
02
03
CreditHQ– Customer Needs
Reduce risk – be the first to know when issues arise; decrease the chance of bad debt
Designed for ease of use
Save money on credit checking (average company with fewer than 10 employees that credit checks purchases 25 credit reports per quarter* at greater than $100pcm)
Access from anywhere, share easily
No upfront costs to purchase hardware or software
* Source: The Business Credit Index, April 2008, Credit Management Research Centre.
Cash flow benefit – get paid earlier by being on top of credit management; act early when chances of recovery are better
CreditHQ – Customer Benefits
4. BCSG Case StudiesSeptember 2012
Business Hub• Barclays Launched their own-branded product called MyBusinessWorks and achieve
the following:- More than 40,000 signups in first year- 85% of users said the product increased their overall satisfaction with Barclays
- 73% of users said they would recommend the product to other small business customers- Winner of Innovation in Product Design – Financial Services at the Financial World Innovation
Awards, 2011
• European Bank with their own-branded product achieved direct correlation to customer acquisition and retention:- Increased average small business product holding from 2.2 to 2.7 per customer - Reduced impairment rates by 50%
Credit HQ• A European Bank offered a version of Credit HQ and found:- 70% of customers have recovered some or all of their debt- More than 10,000 Credit Alerts generated each week to customers
Case Studies
Improved perception of bank and relationship
Most valued relationships (in descending order)**
1.Accountant – Tax advice2.Lawyer3.Financial advisor – Financial advice4.IT support – IT/process advice5.Bank
“The relationship manager at the bank is over-
promised”
“No-one at the bank understands me and my
business”
Before BCSG Hub
The majority have lost faith in the effectiveness of business managers and prefer a distant relationship with the bank
Source: UK Bank Proprietary Research
The My Works Platform increased their overall satisfaction with bank with the majority saying they would recommend the product to other small business customers
Customer: “My business manager
definitely understands my business – it
is savvy for them to offer tools to help
me grow and strengthen my business.”
Staff: “At last!!! A fantastic opportunity
to enhance support to our customers …
making us look professional in our
recommendations.”
After BCSG Hub
Fee income
Differentiation – Acquisition
Seller pride
Awareness of bank as broader solution provider
Retention – Deeper relationship
Better customers – higher success rate
Halo Effects for the Bank
5. Indicative timelinesSeptember 2012
Start Mar ‘13Start Dec ‘12End Nov ‘12End Oct ‘12 End Jan ‘13
Steps to Delivery
Financial/Technical due diligence Contract signing
Technical/ Operational
Design/Specification sign-offOperational process sign-offProduct build
Sales/Marketing
Marketing campaign definitionTargets/Incentives within product mixPerformance measurement and MI
Product testing Sales training
Components Pricing Branding/ Customisation
Implementation Spectrum: Go-to-market options
Option A: Product Integration Option B: ‘Lightly’ Branded Option C: Link & Launch
Integrated Referral
• Fast to market, low cost
• BCSG does billing and support
• Marketing-driven
• Custom product development (charged as min commitment)
• Embedded training and coaching resource
• FI does billing
• Proposition enhancement
• Basic training and customization
• Joint demand generation activity