FinLab FinovateFall 2012 Interview: John Davis of BCSG

2nd October 2012

By pf wilson – 20/09/2012 15:29:31. Podcast available here.

BCSG is a U.K.-based concern that helps small businesses operate more efficiently. Partnering with banks, BCSG offers a wide range of products that allow business to more easily take care of back office operations, so they can concentrate on the business itself. At FinovateFall 2012, BCSG demonstrated Business Hub to rave reviews. John Davis of BCSG spoke to FinLab from his office in London. Read our interview, or download an audio version and take it with you anywhere.

How are things in the U.K?

Pretty good, thanks.

Can you explain what BCSG does?

Yes, BCSG helps small businesses to be more successful, to survive and succeed, and we do that by creating great products and services that try and pick off all the key headaches that small businesses face. That might be around cash flow, or credit management, or securing critical data, employing staff— so we create those products then we work with large banks to distribute those products to their customer bases creating three distinct benefits for the banks.

Does BCSG operate worldwide?

Yes, BCSG was born in the U.K. several year s ago now, we have a successful business here in London that we are now taking internationally, so the U.S. has been a focus of our for a year or so now. We’ve got a couple of deals with financial institutions in the U.S. we also have a number of conversations in several European countries and elsewhere. We’re sort of headed toward worldwide coverage but not quite there yet.

Do small businesses in North America face the same challenges as those in Europe, or other parts of the world?

I think there are inevitably some differences not the least of which is in the differences in the geography of the two countries so clearly much smaller market here in the U.K. physically as opposed to the U.S. I think though that there are probably more similarities than differences. What one finds when they talk to a small business owner is they set up their business because they are passionate about the thing that they’ve chosen to do whether that be fixing cars or IT consultancy. What they also find though is that there are numerous things they need to do alongside their passion that are things that they weren’t expecting. They need to manage their finances, invoice their customers, or chase bad debt when it goes overdue, or create an employment contract for a staff worker. And where we try to help those small businesses is in doing all of hat managing of the business, leaving them time to do the bsuiens sthat they set up to do in the first place.

What did you demo at FinovateFall 2012 in New York?

We talked about a product called Business Hub. Which is an online subscription package comprising five market leading applications helping a small business with their accounting, business planning, help them to create a professional looking website,  helping them with creating legal documents that they require like employment contracts or health and safety policies, and finally with securing their business critical data.

What was the response at Finovate?

It was actually really terrific. We demoed at Finovate in London (in February 2012) and had a very good response, but that response tended to be 30 percent from financial institutions and banks that might become partners of ours, clients of ours, and the other 70 percent from the vendor community. I think in New York we saw more like 60 percent banks and 40 percent other potential vendor relationships. And the banks we saw were the ones who really saw Business Hub resonating with their customers, and were interested in talking with us about white label Business Hub for their own particular customer base.

What has been like working with banks in the U.S. so far?

It’s been very much the start of our journey in the U.S., but a very encouraging one. We work today with Oklahoma Financial and a regional bank called Wintrust out of Chicago, and we have conversations ongoing with many financial institutions today where we’re at varying degrees of progress in terms of launching our services with them. I think our one thing that is clear about banks the world over is you don’t get knee-jerk decisions that happen very, very rapidly. Typically banks will take a little while to digest something and work through the process of brining something to market, but that’s true in the U.K. just as it is in the U.S. as well as other international territories. So we’re really encouraged by how we’re getting on and Finovate Fall (2012) was real shot in the arm for BCSG in terms of our progress in the U.S.

Do you have a lot of customers at the moment in the U.S., or are you still rolling out the platform?

So in the small business area, we are still relatively small scale. We are in tow bank markets at this time. Across the world we support more than 100,000 small business customers, and tens of thousands of those customers subscribe to platforms that we distribute via other financial institutions. We have a really good feel for what’s current, for what small businesses want and how we can help them. And we’re very excited about being able to bring that to the U.S.

So, a small business in America who is interested in BCSG signs up with you directly, or through a partner bank?

Today our route to market is through banks. Unfortunately as a small business in the U.S. today unless you’re banking with one of our partner banks, our products aren’t yet available, but we’re hoping that’s just a matter of time. Our belief I that by helping banks distribute products and services like business hub it really enhances the dialogue the bank has with the small business. It positions the bank as a trusted advisor and helps them differentiate what they have to offer their small business customer so we use that as our route to market.

What inspired the creation of BCSG?

I worked for Barclay’s here in the U.K. for many years in the small business market. And there was real understanding of what Barclay’s was doing in the small business market, the wider business services space which is what we call the products we offer which are related to banking, but aren’t banking. Barclay’s had huge success with that for the last decade going back to 2004, and we felt that BCSG we felt there was an opportunity to take some of that success and sprinkle into other financial institutions who were also trying to offer their small business customers a more rounded and more comprehensive proposition of services.

Did business folks approach you and say “we’d like to see this particular product or service offered?

Absolutely. We have very regular contact with tens of thousands of small businesses through our subscription packages and through our customer support. And that’s constantly generating new ideas for us so like I said Business Hub has five services and there are many others that we are investigating around domain names, or email, or payroll services. Each of which is designed to pick off one of the pains that a small business experiences when they first set up.

So you have many things in the hopper as we say in America.

Yes, absolutely. Whilst we’ve been around, and we have a very successful business in the U.K., it feels like it’s very much the start of this journey. So, we feel like we have a lot to develop and all sorts of things I would love to do for small business. I’d love to create a proposition that genuinely delivers customers to small businesses. That would be a fantastic piece of product development that would help small businesses. We have plenty ideas in the hoper as you say, and we’re looking to bring them to market in the coming years.

That sounds like it would involve mobile couponing which is a very interesting space.

I think it really is, and I feel there are things to be done there around loyalty programs and vouchers or coupons, but today we’re pretty well into some of the larger and medium sized business, but perhaps less so at the really small end. What we’ve tried to do historically is try to democratize, if you like, the things that large businesses and corporations take for granted as things they can get at a reasonable cost, whereas small businesses haven’t really had the opportunity to get that stuff at a cost they can afford and with the degree of simplicity for their requirements.

Sounds like things are going well for BCSG.

Thank you we’re certainly encouraged by where things are and where we want to take them.