2. 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
4. BCSG Overview [1/3] Company History:
Established 2005
Full service provider of best in SaaS focus since 2010
Headquartered in London
class, small business products and 100+ full time employees
services
Clients include:
Established and proven
We support over 150,000 small businesses
worldwide
We understand small businesses and
Financial Institutions
Sole focus on delivering innovative
propositions to the small business clients of
Partners include:
financial institutions
Breadth of capability
Full service across technology, operations,
support, training and marketing
5. BCSG Overview [2/3]
Key staff experience is unparalleled: We have recently won…
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 Been shortlisted for…
and sales channel enablement
Specialists in developing IT platforms that provide
cloud-based services to thousands of small
businesses
Australian, New Zealand & Asian Managing And been featured in…
Director has a track record in driving growth and
productivity in the underserved small business and
NFP sectors in the UK, Asia and Australia
6. BCSG Overview [3/3]
Focused on International Growth:
Strong pipeline of overseas FI clients in US & Europe and
looking to establish banking client in Australia by end 2012
7. 2. The small business sector: an under-served
opportunity
September 2012
8. 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
Sources: NAB, Intuit research, PKF Research, dnb
Australian Gov. Department of Innovation 2011
9. The Smallest Businesses
Represent the Largest Volume Opportunity
1,306,000
There is a broad macro opportunity
for banks to take a leading role
in helping micro/small business be less
740,000
reactive and more proactive in ensuring
their success.
0 employees
1-19
employees
81,000
6,000
Micro Small Medium Large
Number of business in Australia by size calculated by number of employees
Source: Australian Gov. Department of Innovation 2011
10. 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
11. 3. The BCSG approach & solution examples
September 2012
12. Value Map – (Small business banking on a page)
Customer
Customer
Revenue
Revenue Costs
Costs Value
Value
Stock
Stock
Start-ups
Start-ups Value/Volume
Value/Volume Marketing
Marketing
Lending
Lending Margin
Margin Acquisition
Acquisition Account Opening
Account Opening
Impairment
Impairment Selling Costs
Selling Costs
Switchers In
Switchers In
Value secured for
Value secured for
Deposits
Deposits lending
Account servicing
Account servicing
lending Operations
Operations Tech investments
Tech investments
Cease Trading
Cease Trading Account fees/
Account fees/
Tariffs
Tariffs
Merchant Fees
Merchant Fees Paid on deposits
Paid on deposits
Fees
Fees Transaction Fees Funding
Funding Wholesale markets
Wholesale markets
Transaction Fees
Referral sales
Referral sales Government
Government
Switchers Out
Switchers Out Other NII
Other NII Schemes
Schemes
13. BCSG Spheres of Influence
Customer
Customer
Revenue
Revenue Costs
Costs Value
Value
Stock
Stock
Start-ups
Start-ups Value/Volume
Value/Volume Marketing
Marketing
Lending
Lending Margin
Margin Acquisition
Acquisition Account Opening
Account Opening
Impairment
Impairment Selling Costs
Selling Costs
Switchers In
Switchers In
Value secured for
Value secured for
Deposits
Deposits lending
Account servicing
Account servicing
lending Operations
Operations Tech investments
Tech investments
Cease Trading
Cease Trading Account fees/
Account fees/
Tariffs
Tariffs
Merchant Fees
Merchant Fees Paid on deposits
Paid on deposits
Fees
Fees Transaction Fees Funding
Funding Wholesale markets
Wholesale markets
Transaction Fees
Referral sales
Referral sales Government
Government
Switchers Out
Switchers Out Other NII
Other NII Schemes
Schemes
PRIMARY INFLUENCE SECONDARY INFLUENCE NO INFLUENCE
14. Key Themes
Customer
Customer
Revenue
Revenue Costs
Costs Value
Value
Stock
Stock
Start-ups
Start-ups Value/Volume
5 Marketing
Value/Volume Marketing
Lending
Lending Margin
Margin Acquisition
Acquisition Account Opening
Account Opening
1 Impairment
Impairment Selling Costs
Selling Costs
3
Switchers In
Switchers In
Value secured for
Value secured for
6
Deposits
Deposits lending
Account servicing
Account servicing
lending Operations
Operations Tech investments
Tech investments
Cease Trading
Cease Trading 4 Account fees/
Account fees/
Tariffs
Tariffs
Merchant Fees
Merchant Fees Paid on deposits
Paid on deposits
2 Fees
Fees Transaction Fees Funding
Funding Wholesale markets
Wholesale markets
Transaction Fees
Referral sales
Referral sales Government
Government
Switchers Out
Switchers Out Other NII
Other NII Schemes
Schemes
1. Improve Acquisition 2. Improve Retention 3. Increase Lending Income
4. Increase Fee Income 5. Reduce Cost of Acquisition 6. Reduce Operational Expense
16. Business Hub – Solution
Single sign on portal Access to all your business tools Customizable selection of
from one place software and partners
Bookkeeping
Business Planning
Legal Manager
Data Backup and Storage
Website Builder
…and many more
Business Hub easily re-branded: Our Current Partners Include:
17. Benefits to the Small Business Customer
Access solutions for significantly cheaper than if purchased on their own
Easy 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
18. CreditHQ– Solution
3 Key Values Easy to use credit management Specifically built for small
tool 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:
Our Current Partners Include:
19. CreditHQ– Customer Needs
01 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
02 keeping them up at night
03 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
20. CreditHQ – Customer Benefits
Cash flow benefit – get paid earlier by being on top of credit management;
act early when chances of recovery are better
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.
22. Case Studies
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
23. Improved perception of bank and relationship
Before BCSG Hub After BCSG Hub
The majority have lost faith in the The My Works Platform increased their
effectiveness of business managers and overall satisfaction with bank with the
prefer a distant relationship with the bank majority saying they would recommend
the product to other small business
Most valued relationships (in descending customers
order)**
1.Accountant – Tax advice Customer: “My business manager
2.Lawyer definitely understands my business – it
3.Financial advisor – Financial advice
4.IT support – IT/process advice is savvy for them to offer tools to help
5.Bank me grow and strengthen my business.”
“The relationship manager at the bank is over- Staff: “At last!!! A fantastic opportunity
promised” to enhance support to our customers …
making us look professional in our
“No-one at the bank understands me and my recommendations.”
business”
Source: UK Bank Proprietary Research
24. Halo Effects for the Bank
Fee income
Differentiation – Acquisition
Seller pride
Awareness of bank as broader solution provider
Retention – Deeper relationship
Better customers – higher success rate
26. Steps to Delivery
Product testing
Sales training
Financial/Technical due diligence
Contract signing
Technical/ Operational
Design/Specification sign-off
Operational process sign-off
Product build
Sales/Marketing
Components Marketing campaign definition
Pricing Targets/Incentives within product mix
Branding/ Customisation Performance measurement and MI
End Oct ‘12 End Nov ‘12 Start Dec ‘12 End Jan ‘13 Start Mar ‘13
27. Implementation Spectrum: Go-to-market options
Option A: Product Integration Option B: ‘Lightly’ Branded Option C: Link & Launch
Integrated Referral
• Custom product • Proposition • Fast to market, low
development (charged enhancement cost
as min commitment) • Basic training and • BCSG does billing
• Embedded training and customization and support
coaching resource • Joint demand generation • Marketing-driven
• FI does billing activity
