Andy, tell me a little bit about your role at Lloyds, and what sectors you specialise in.
I run the Lloyds Bank SME broker development team. I’ve got a national team of around 90 business development managers working with commercial finance brokers right across the UK.
You were the headline speaker at the NACFB Commercial Finance Expo, and you talked about ‘Blending people and digital to create omni-channel client experiences’. Who needs to get digital more: your average customer or the bank that serves them?
I think the external marketplace is changing whatever aspect of life we look at. We see an increasingly digital world. But I was very touched around the whole digital people piece, many years ago actually. It was something Steve Jobs said back in 1996, when he first talked about launching iPhones. He said these words: that you’ve got to start with the customer experience and work back to the technology. You can’t start with the technology and try to figure out where to sell it. And that’s something that’s lived with me for an awful long time. With digital being a key enabler right across commercial banking, retail banking and frankly our entire lives, but equally the importance of people, nevertheless, remains really key from my perspective.
I think there’s a lot of insight out there in the external market. And when I replay that to commercial businesses in particular, what we see is clients increasingly expecting a better digital experience – and a digital experience in the commercial world that’s based on their personal and retail experiences. Equally, we’re seeing commercial clients wanting to be able to self-fulfil simple needs by way of a digital environment.
That said, what I’m really thoughtful about is that people – relationship managers, business development managers working with commercial clients – are still really important specialist support for complex or sector-specific needs, and providing businesses with strategic support as they develop over the years.
Going back to your Steve Jobs anecdote, something we’ve been saying for a couple of years in financial services is employing the outside-in approach, where you’re looking at what the customer needs and then delivering that instead of the other way around.
I think outside-in is a really good description. As I go around the marketplace, quite often what I see is digital enablement in what a funder might describe as “lower-value segments”, so let’s call that a small deal. If you turn that around and look at it from the client perspective, whatever the size of the client, actually a small deal in their lives is a really big deal. Therefore, that’s why I think a blend of both digital enablement in terms of speed and efficiency is really important, but equally that human interaction to be able to think forward. How does this particular transaction fit as part of a wider strategic desire the business owner might have, and how does it work with their aspirations? Rather than digital, which is great for transactional business and simple tasks.
Making a dent in SME banking
Am I right in saying the UK is the largest SME market?
I don’t know if it’s the largest SME market, but it’s certainly a very big SME market and growing. It’s also now a very competitive marketplace. We’ve seen a huge number of new entrants increasing competition within that market space; some specialists, some niche providers, and that’s healthy for the growth of our SME business.
There’s a nice mix of traditional providers of services and the challengers that are coming through. And the challengers are really making a dent in SME banking, aren’t they?
I would absolutely agree. What I would say is that I don’t think there’s any one funder out there who can do everything for everybody. So having a wider choice is a real positive in terms of the development of the SME market, and ultimately economic growth.
I saw an article that said Virgin Money plans to offer SME business banking in branches. I know Lloyds has done an awful lot in branch banking over the last couple of years. Could business banking be the saviour for the high street branch?
We still operate a massive branch network under the Lloyds banner in England and Wales, and obviously the Bank of Scotland banner in Scotland, and certainly for more complex needs, there is always someone available within that branch network locally to be able to talk to. If I look at SME banking in particular, we’ve got 700 relationship managers dotted around the UK all looking after portfolios of customers. Some of those will be trading businesses, but we also have sector-specific relationship managers, particularly things like manufacturing, healthcare and real estate, all out there designed to support SME businesses, frankly whatever their size.
Catching up to retail banking
Do you think small businesses have been left behind in the digital sphere? Has there been more focus on retail customers and on staying up to date for their demands rather than the SME? Have they been left behind a little bit?
I think the commercial environment is probably catching up with the retail environment, and certainly catching up very fast. But I go back to the key driver behind that, which is that our retail – our personal experience – will be driving our commercial decisions as well. My experience of, for example, Amazon … I’ve got that way, therefore when I’m running my own business going forward, my expectations are that my business experience can equally look like my Amazon experience, particularly for smaller, less complex transactions. Equally, I would want access to specialist support, particularly for more complex needs, and equally strategic support and wider business support.
And that’s the omni-channel side of what you spoke about.
Absolutely. What I was talking about is that, for a lot of business owners it won’t be either/or. It actually has to be both, with the choice driven by the client. So their ability to self-fulfil, to be able to access transactional, simple needs really quickly, but equally having the ability to work with a human being, a relationship manager for more complex transactions, effectively as a trusted partner. Not just to work on a transaction, but what is the strategic direction of that business, and how does that transaction fit into that strategic plan.
Let’s talk about the customer. Customer-centricity is fast becoming a cliche – an overused phrase. Yet, perhaps we should be overusing it! I think there’s a case for buzzwords being created, mocked and discarded, and the underlying sentiment or motivation gets ignored. Am I being pessimistic?
I can only speak from a Lloyds Bank perspective … the customer is at the heart of what we do, because we want to create valued, trusted, long-term, sustainable relationships; earn the trust of those clients and be able to work with them over a longer period of time. That’s probably very different to a personal transactional relationship, which I might have with a digital provider. Very, very different.
The road ahead for Lloyds
What’s next on the Lloyds roadmap in terms of SME banking and technology? What can you tell us?
Lots going on in the technology space. A new payments platform has just been launched, which is absolutely fantastic, making international and domestic payments a lot easier for the client to be able to control from their desks. We’re looking at other aspects in terms of digital development as well, all designed through APIs to enable clients to be able to self-serve smaller transactions more quickly and more efficiently.
If I look specifically at the broker space, which is my area of specialty, we’re working on a digital portal for brokers, very much designed by brokers for brokers. I go back to my Steve Jobs quotes at the moment in that I need to understand what my brokers want before I can provide, rather than just designing something in isolation.
Equally, I’ve just announced from a Lloyds Bank SME perspective a significant increase in the number of business development managers we’ve got out there in the marketplace. Specifically for … the client, whatever the size of that client – while it might be a small amount of money, it’s still a big deal for that customer. Therefore, this is a way of working with them on a long-term basis.