Scotsman.com Business - Banking & Insurance - Dotcom power to the people: Dotcom power to the people
INTERVIEW: JIM SPOWART
GUY DIXON
(gdixon@scotlandonsunday.com)
JIM Spowart strides across the room with applause ringing in his ears and a smile on his face. An audience of about 80 has gathered in the Edinburgh offices of Lloyds TSB Scotland eager to hear him talk about how he turned the banking world upside down.
But as he begins speaking it quickly becomes clear that Spowart, who has recently founded his fifth financial services company, does not want to dwell on the past. After the obligatory opening joke, he delivers a breakneck resumé of his corporate life before switching to his latest venture. Spowart, 55, may have built a few empires - notably at Standard Life and HBOS - but he is a restless creator of new enterprises and wants to concentrate on his next project.
The creation of Direct Line with Peter Wood is dealt with in a couple of minutes. Standard Life Bank and Intelligent Finance (owned by HBOS) are given similar treatment. St James' Place Bank is hardly mentioned. Spowart is in a hurry to get on to his central theme - what he sees as a recent lack of progress in the financial services industry and how the new company he has just founded, PeoplesChampion.com, is going to turn the sector on its head once again.
"I have seen little innovation in the financial services sector in the last one-and-a-half to two years," he tells the Business Forum, a networking organisation. "We will see a huge change over the next year or so because there's no hiding place for banks, building societies and other institutions.
"This is because of price comparison websites. We have seen the telephone revolution and the internet revolution, and now we are seeing the internet revolution which gives everyone access to the whole marketplace and not just one bank's products."
PeoplesChampion.com allows users to compare up to 4,000 savings products, 8,500 mortgages, 100 life insurance policies and 300 credit cards and claims all its information is unbiased to allow consumers to make the best choice about their finances.
"We are giving value for money to consumers, giving them choice and trying to be an honest service which gives information so you can make a good call on what products you should have," he says.
Well, he probably would say that and no doubt will be challenged by any user of the site who finds otherwise.
The website went live last weekend with little fanfare - a deliberate ploy, according to Spowart. He says he has learned lessons from the launch of IF, which was postponed for several weeks in July 2000 because of computer problems.
"We did have problems with the launch of IF, and we learned from that," he says. "I have been staggered by the volume of consumers who have done business with us since we opened the doors. We have had 2,300 customers."
Spowart's plan is to create a business which will be similar to The Motley Fool or Google in its ubiquity and the first place people choose to look as a source of information. It's highly ambitious, but Spowart has a proven track record and an insider's knowledge of the industry his website tracks.
Despite establishing four businesses, he is said by friends to be "well off rather than wealthy", which may partly explain his ambition in setting up his latest venture.
After school, he started as a junior clerk in the old National and Commercial Bank in his home town of Cowdenbeath in Fife before joining Royal Bank of Scotland at the Edinburgh HQ.
At RBS, his talents were quickly recognised and, in 1993, he helped found one of the first telephone banks, Direct Line Financial Services, working with Peter Wood.
Standard Life approached him and in 1997 he joined to oversee the creation of Standard Life Bank, where he pioneered the idea of flexible mortgages, allowing customers benefits such as withdrawals to buy other goods and payment holidays.
James Crosby, then chief executive of Halifax, approached him and Spowart hatched his biggest plan to date, Intelligent Finance. He came up with the then revolutionary concept of offsetting - allowing interest earned on current and savings accounts to be counted against interest paid on loans, credit cards and mortgages.
After a shaky start, IF went on to change the marketplace and plans were hatched to roll the business out overseas. But the plans were pulled suddenly and Spowart resigned from HBOS in May 2003, in a move which stunned the banking community. He has his share of detractors within the close-knit Scottish banking sector, no doubt partly inspired by a degree of jealousy of his successes.
Since leaving HBOS, he has spent time helping the Maggie's Centre in Dunfermline, and began building links with mainly small IT firms.
He is also involved in the youth information network Young Scot, where he is spearheading the Scottish Executive-backed initiative to offer new products and services to the country's 18 to 26-year-olds. He received an honorary doctorate in business administration from Napier University last November and has been working on his next "big thing".
One of Spowart's talents has been persuading some of the UK's biggest financial services companies to back each venture. In his new company, the Glasgow media group, SMG, is coming on board. The owner of STV and Virgin Radio is looking for new revenue streams as advertising revenues from its core analogue TV business fall, and it has taken an 80% stake in the website.
Spowart, Kenny Kemp, a former business journalist, and three executives from The Union, an advertising agency based in Edinburgh, hold the remaining 20%.
Kemp knew Spowart from his time as a journalist and three of the founding members of The Union - chairman Ian McAteer, creative director Andrew Lindsay and planning and research director Mark Reid - came on board after seeing the plans.
SMG will spend £1m advertising the site annually and estimates it will generate revenues of up to £5m in three years. The company will earn income by taking a commission on each transaction. Spowart is evidently keen to emphasise that he has the backing of a publicly listed company and the credibility this lends his company.
"PeoplesChampion.com was an idea I had that I bounced off Donald Emslie [acting chief executive of SMG]," he says. "There's no risk to the consumer. "
A UK advertising blitz will begin this month, starting in Scotland.
Despite having made a comfortable living from financial services, Spowart is now critical of the hand that has fed him and claims innovation is being hampered by the need to increase profits. He says financial services companies are not doing enough to help customers ensure they get the best deal.
"My message to consumers is to be vigilant [when choosing and using financial products]. When your car insurance goes up, look at the whole marketplace. When your home insurance goes up, look at the whole marketplace."
If things work out, the website will be expanded to include other areas. Plans are being hatched that could result in People's Champion-branded products being offered in conjunction with a financial services company on the website.
Spowart is quick to point out that his products would be ranked objectively along with those of rival companies. Other types of consumer products could follow on the website.
"The plan is to go into utilities. We are talking about doing something quite soon. Mobile phones is a massive marketplace where there are big issues. The concept will evolve and there is no reason why we couldn't put on cars, white goods and a variety of products."
He also admits to feeling pressure to make his latest business as successful as the others, and is all too aware that people have invested in the expectation that he will work his magic again. With this in mind, he is not setting modest targets. "Our goal is for People's Champion to become a household name. People's Champion is going to be known in every household in Scotland. This is going to be very successful."
