Building a revolutionary bank in record
In a time of turmoil among new e-banks, a newcomer burst on to
the market. After its first full year of business, this bank had
won STG£5.3 (US$9.6) billion of mortgage lending, a full 9% of the
UK mortgage market.
By the beginning of 2004, this same bank had amassed assets of
STG£15.5 (US$28.1) billion and customer accounts had reached
820,000, up 35% on the previous year.
The Intelligent Finance story is about a new approach to
banking, built around customers. Also, it is about how the new bank
was built by VISION within a seemingly impossible timescale.
Jim Spowart, one of Britain's most innovative telephone bankers,
wanted to create a new type of bank. It would connect mortgages,
savings, credit card, loans and current accounts so customers would
only have to pay interest on the balance of the money they really
It was a radical proposition for a deeply conservative industry.
When he invited a lone VISION director to a meeting in October
1999, Spowart produced a sheet of paper with all five accounts laid
out conceptually in a single bank statement.
Spowart had the notion of creating inter-linked accounts, which
he called "jam jars". These jars would allow customers to see how
the money in their debit and credit balances measured up. He
envisaged an offsetting function across all products so customers,
if they so chose, could only pay interest on the money they
actually owed the bank.
For example, they could qualify for a 0% credit card if they had
more money on deposit than their credit card balance. For a
mortgage holder, there was the prospect of substantial savings over
the term of a flexible mortgage.
Spowart had resigned as chief executive of Standard Life Bank to
implement his radical plan. Intelligent Finance was supported by a
STG£120 (US$218) million investment by its parent, Halifax plc, the
UK's largest mortgage lender.
The options for Spowart's bank were seemingly unlimited. "Can
you build the engine for this" he asked. "Yes", was the VISION
So began a major initiative that would transform a greenfield
site in Edinburgh into one of the UK's fastest growing telephone
and internet banks, employing a staff of nearly 2,000 by the end of
its first year of operation.
VISION had worked for Spowart at Standard Life Bank and he was
impressed by its work in the retail banking sector.
VISION was commissioned to produce a detailed plan for the
programme, called a Design in Action (DIA). Completed within eight
weeks, it detailed the sheer scale of the project.
The DIA addressed five key challenges:
- The customer proposition for turning the 'jam jar' dream into a
reality while enabling consumers and professional advisers to
access the bank 24x365, across multiple channels
- The design of what was required to support and deliver that
- Technical architecture of a wholly innovative nature
- A delivery programme that included mobilisation plans, training
and systems infrastructure
- The delivery of a business which, at that stage, was still
operating out of temporary offices
What was needed was complex solution architecture to process up
to 250 core service requests with re-routing subject to any of the
myriad of options exercised by the customer. The Customer Service
Consultants' (CSCs) desktops were Web-based for all aspects of
During the DIA, 23 vertical project streams were identified from
solution design through to technical design and technical
Casting the net
With people, processes and technology so tightly interwoven, in
January 2000, VISION was tasked with overall management of the
programme. The company mobilised 500 consultants, project managers
and developers in three months.
VISION had overall responsibility for integration and
implementation. It took 300 people to develop the software over the
course of ten weeks. The recruitment net was cast as wide as Chile,
California, India and South Africa.
In parallel, CSCs and administration teams commenced training
with teams of VISION 'resolvers' fielding breakdowns and passing
lessons back to designers.
The telephone bank went live in September followed by the
website in November 2000.
Sophisticated mortgage customers
Strategically, Intelligent Finance had to attract in significant
numbers the highly coveted, sophisticated mortgage customers who
would purchase two or more other products and generally maintain
higher than average balances. Intelligent Finance met or exceeded
its strategic objectives, as is evident from these figures:
- In the first year, Intelligent Finance attracted 70,000
checking accounts with average balances of STG£4,500 (US$8,180),
well over the industry average. It now manages over 500,000
- By the end of the first year, Intelligent Finance had 260,000
customers with an average of well over two products per
- The average mortgage value of an Intelligent Finance
borrower was STG£100,000 (US$181,000) compared with the
industry average of STG£72,000 (US$131,000), and the average loan
to value ratio was 63%, compared with the industry average of
The bank won a number of awards including 'Best Large
Organisation, in the National Business Awards of Scotland, '5 Star
Mortgage Provider' by Financial Adviser and 'Mortgage Provider of
the Year' by Bankhall while the site's functionality came first in
the 'ease of use' for online credit cards in a survey conducted by
"The development of the IT for this project was peerless and
a huge task. The bank's success was undoubtedly dependent on its
successful implementation. Industry experts have predicted that it
would have taken any other bank up to five years to launch a
similar type of operation."
"We have a world-class system in a seemingly impossible
timescale. The fact that we received it in under a year is a
reinforcement of the scale of the work undertaken by VISION. Nobody
has ever attempted to integrate five products in that timescale
George Scarlett, Intelligent Finance, IT