Ep. 202 Interview Ross Dalzell

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ST:  Welcome to Fintech Insider Interviews, I'm Simon Taylor. Today, I have the pleasure of speaking with Ross Dalzell, the Head of Business Banking Product and Propositions at Barclays. Welcome to Fintech Insider, how are you, sir?

RD:  I'm-, I'm very happy today.

ST:  Always glad to be around a former Barclays colleague. Could you tell us a little bit about your work at Barclays? And, you know, what is a head of Business Banking Product and Propositions? That's a lot of-, a lot of words.

RD:  It is. It's certainly something that, if you're ever at a dinner party, it's pretty hard to explain to someone what the hell you do. So, yes, so I look after building all the products and new digital services that are sold to small businesses in the UK. So, that can be the traditional stuff, like current accounts, and loans, and savings accounts, how they're priced, what they do, what features come with them, how you access them, how you use them, so I look after all that, but also some of the new things, which is perhaps what we'll talk about today. The new kind of services about how do we create value for small businesses, how do we make them more successful, how do we get them to take advantage of all these amazing new tools that are becoming available for them?

ST:  We did an episode, a number-, I think a couple of months ago, one of our new shows, called SME Is So Hot Right Now. Small/medium enterprises have been traditionally very underserved. What would you say the challenges are, if you are a small business right now?

RD:  There's a really funny story about this. So, the Open University ran a survey, every six months, for about 30 years, with small businesses. And they asked 20,000 small businesses in the UK, "What are the biggest problems that you face?" And they stopped running the survey, in the end, because they got the same answer for, sort of, 30 years, and twice a year, and the answers were the same things. They were cashflow, every small business has a challenge with cashflow. Pretty much every small business you will meet will talk about that. Finding customers. Finding new customers is almost always a challenge. Finding good people, like, hiring, is a consistent challenge, almost whatever industry you're in. And time. My wife runs her own business, all of those things would be true of her business. I've never met a small business owner who wouldn't die for some more time. So, they're the-, they're the big challenges, and I think anyone who plays in the small business market, anyone who wants to help small businesses be more successful, that's what they need to do. You need to-,

ST:  You've got to be a timesaver-,

RD:  You need to get in to some of those things.

ST:  You've got to help me manage my cash, you've got to really get that sort of stuff. I was speaking to an executive from another financial institution, some months ago, and one of the things he said, that was really interesting to me, was that the gap between the bank and the customer seems to have been growing over the last few years, but actually, maybe we're starting to see that close a little bit, in the last couple. We've seen a lot of fintechs come in to the space, and we're seeing Open Banking now. How do you think Open Banking is really-, and DO you think Open Banking is really going to change how fintechs, or not just fintechs, but how small businesses can really live, day to day, managing their business?

RD:  The big challenge with Open Banking is it's-, it's a fabulous piece of technology, which is great, and cool, but how does it really make a difference in the real world? And it probably goes back to your previous question. So, it has to save time, or make cashflow management easier, or help you find new customers, or help you find great people. If it solves some of those problems, then you're going to see Open Banking have a real transformative effect, and really take off. And really, that's what we've been working on. So, we, about two years ago, started thinking about-, we knew this was coming, we weren't quite sure what the product was going to be, that was going to make this come to life, and we found a-, a fintech, a partner we could work with, called 9 Spokes, they're actually a Kiwi-based startup, and we worked together with them to say, "Okay, how do we bring together all of those fabulous cloud applications that are starting to appear? We know small businesses that adopt those grow faster and are more successful-,"

ST:  So, these cloud-based businesses being your Slacks, your-, that sort of-,

RD:  Exactly. I mean, there's pretty much a tool for every major need, so if you want-,

ST:  Zenefits, and-,

RD:  Yeah, Xero, for your bookkeeping, Unleashed for your stock management, Shopify for your ecommerce website, right through to the big boys, like Google Analytics, to manage your website, or the big social media platforms, or MailChimp, to manage your social media advertising. There's a whole gamut of fabulous tools out there. There are a number of problems, though, there. So, one, how do you know which one to use? For your particular small business, what's the particular suite of tools that are going to be most useful? Also, which ones do you trust? What's been built by a great business, in a secure way, where the business that's providing it is secure, and is going to be around for the long-term? So, the first problem we thought we could maybe help solve is, bringing together a store with some of the-, the very best tools that are out there, to help small businesses run more efficiently. The second problem, which is the time point, is what we've seen start to happen, is, okay, I've got, I don't know, five or ten different bits of toolkit that I use to run my business. Now I've got to spend 20 minutes every morning logging in to them all, and working out what the hell's going on, and then working out what I need to do next. So, we thought, "How do we bring all that together?" How do we use this open data architecture, which is the same thing that underpins Open Banking, so that we can really stitch together, in one place, all that data that says, "Okay, I can see how my big web campaign's gone, I can see from my bookkeeping packages who I've got-, who owes me some money. I can see my bank account, how much cash I've got. I can see on my Google Analytics what my website traffic's like, and then I can take action off the back of those things." And that's what we call Smart Business, it's a combination of those two things. A store-,

ST:  And Smart Business is a web-based tool that I log in to. Is that alongside my bank account, or is it-,

RD:  It's part of online banking. So, we see it as an enhancement to online banking, it's literally, you click in to online banking, click the Smart Business tab at the top, and it takes you straight in to your dashboard, for free. It shows you all of those pieces of kit, sort of, stitched together. We were really conscious that we didn't want to-, let's use something like bookkeeping as an example. There are some fabulous bookkeeping tools out there, whether you talk about Xero, or Sage, or Intuit, or FreeAgent, there are some great services available to small businesses, and they all provide a great service. And in the past, how banks have tended to operate is, we would do a partnership with one of those, and then kind of work together to go to the customers, and there's nothing wrong with that, necessarily, but I think that the bookkeeping package a small business chooses should be down to the small business-,

ST:  Mm-hm.

RD:  Probably with advice from their accountant. It's probably going to be those two people having a conversation. My job's to get out of the way. My job is to make sure, whichever one you choose, it's easy for you to integrate it with Barclays, and easy for you to use your bookkeeping and your banking, side by side. Which is what we've done. So, in Smart Business, you've got all four of those packages, you can choose, with your accountant, which one you like, I genuinely don't mind, and if you've already registered for it, you just register your tool on to my platform, and then you can bring the two platforms together and see, make choices, and work together.

ST:  And so, what does that experience look like? Because one of the things I've experience, running-, having been involved in running this, 11FS, but also my own small businesses, in the past, is, generally, pre-Smart Business, that you would have a feed from your bookkeeping-,

RD:  Mm-hm.

ST:  To try and-, and then you would try and reconcile with your bank, and the thing always seemed to break, and the two never fit together. Is it really about fixing just that? Or is there value add over the top of that? 

RD:  So, I think the feeding data from bank to bookkeeping package is still really important, you need that two-way flow of information, and Open Banking is one way we can create that pipework to move data back and forth, so we're definitely doing that. But, actually, the important bit, and the bit that really adds value, whether it's bookkeeping, or anything else, is, you want to piece data together and make a decision. So, for example, if you can see, in your bank account, that you've got three big direct debits going out tonight, and they're going to take you beyond your overdraft limit, and you can see, right next to it, in a little widget in your bookkeeping package, "Here are the three big invoices you've got outstanding. Here's who owes you some money." Well, you can go, "Ah, well, I'll double-click on that widget, it'll take me straight in to my bookkeeping package, with single sign-on, and I can now send a chaser email, to chase the invoice down, to get paid, and save me money. And it's that sort of ability to join up the different services, so you can see the whole picture, and then take whatever action it might be. I think that's where the value is, and that's what'll save customers time.

ST:  Do you think, though, that-, I mean, some of the things I've seen, when I've looked at some of the Open Banking things, your TrueLayers, your Buds, your Railsbanks, your-, and some of the aggregators out there, and when they're looking at the small business sector, really, then, they're abstracting that further, in to the cashflow forecasting-,

RD:  Yes.

ST:  And I know there are a number of tools out there, in the fintech space. Is that something that's in there? Is that something you can do?

RD:  It is, yeah. So-, so, we-, we've definitely put, kind of, a cashflow forecast at the heart of it. I said at the start, cashflow is probably the-, the single most important point. But, again, let's say I've got a wonderful cashflow forecast, and that's great, I mean, as I say, we provide that service. But the important bit is, what are you going to do next?

ST:  Mm-hm.

RD:  So, if you can see a cashflow issue coming, you need to either apply for some funding with us, and I can present you a pre-assessed lending limit, in the tool, and let you take an overdraft instantly, or a loan instantly. Or, you might go, "I'm going to chase down my invoices, and reduce my debtor days," or, "I'm going to manage my stock harder," or, "I'm going to run a campaign, to get more sales in the door," but, actually, even that, I don't think, is abstracted far enough. The trick, for me, is when you can go from insight to action, seamlessly, and that's really what we've been trying to create with Smart Business, is an opportunity for the customer to work out what's going on in their business really quickly-,

ST:  Yes.

RS:  Not waste time figuring out where they currently stand, and then, without having to remember passwords, and what have you, get straight in and do whatever the action is.

ST:  You can actually take the action-,

RS:  Yes.

ST:  Because the-, the tool's right there, click it, and off I go. So, you've partnered with a company here-,

RS:  Mm.

ST:  As you mentioned. What have you learnt about partnering with small companies, during that process? Because I imagine, you know, there's-, there's a lot of value fintech companies can add, and now, with Open Banking, a lot of fintech companies, and companies, broadly, will be looking to add value, and partner. So, you know, what have you learned, and what advice would you give out to the fintech community?

RD:  Yeah, I mean, so, first of all, fintechs can be hugely valuable partners to banks, and those relationships can be fabulous. The one with have with 9 Spokes, say, who's our partner in Smart Business, has been really transformative, which really helped us move the game on at a speed I don't think we could have done internally. But, to your question of, kind of, how, so, I'm the guy who will often be sat across the desk from a fintech who approaches Barclays, particularly if they're in the SME sector, and wants to do business with us. So, I'll have, I don't know, 10 or 20 of those meetings a month, sometimes, where I'm talking to those customers. The things that I've learnt. So, the first conversation we have, I'm probably looking for three things. There's probably three main questions in my head. The first question I'm thinking about is strategic fit. So, is there a proposition that's really coming to life for me, that's really going to make small businesses more successful, and that a bank could credibly offer? So, you've got to get me excited, you've got to get me at the (? 10.36), with something that's, kind of, really going to-, I can see how it could add value, and I can see that Barclays could credibly be involved. Actually, a lot of fintechs are pretty good at that. They've, kind of-, usually, they wouldn't have got that far, if that wasn't the case. The second hurdle, and I'll move there pretty quick, once I've-, once I've, kind of, realised the first one, is doability.

ST:  Mm.

RD:  So, I really want to know that the technology stack is credible. I need to know it's going to be really secure, it's built in an industrial strength way, the person can talk to me in a way that demonstrates to me they understand that, and understand how a bank thinks, and probably that they've maybe-, I use Salesforce for a lot of my infrastructure, so have they worked with Salesforce before? Have they worked with MuleSoft before? Of course, coming together now. What kind of technologies have they worked with? So that-, I'm not a tech guy, but I'm going to know enough to test the mettle a bit-,

ST:  Yes.

RD:  To get you the opportunity to speak to my tech team. Because I'm usually partnering with a fintech in the name of speed and innovation, if I go, "Oh, this is vapourware, isn't it, and there's nothing really under the bonnet," or, "It's not really industrial strength," that's going to-, I'll check out pretty quick. And I tend to find that part of the conversation is usually weaker than the propositional pitch.

ST:  Yeah.

RD:  So, I think that's-, that's an important point. And then the final piece would be, I need to be sure the business model is aligned, so, I need to be really confident that, if I win, the fintech wins, and if the fintech wins, I win. Because if that's not the case from day one, at some point in the future, you'll start to have problem, and probably within that, I really appreciate companies I talk to, or work with, who will come in and give me a model that we think-, they think is aligned, and they've clearly thought about that, but there's also a bit of flexibility, where they, kind of, want to have a conversation that says, "But if you've got a different idea, or you've got a different set of pressures, we can find-, there might be a different way for us to tweak this a bit." That helps.

ST:  So, it's a thoughtful approach. It's kind of a, "Hey, here's what we think. What do you think?" 

RD:  Exactly right. If we can co-create together, I think that's kind of-, just like any two fintechs coming together, or a customer and us, or a customer and a fintech, it's that ability to-, to-, to build together, that I think is-, when you can, you know, get off to a-, a good partnership, really.


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ST:  And what do you think drives value for end customers? I mean, you mentioned the four things that the SME sector looks for, but with that fintech, is it really about, you know, this time save? And if I'm a fintech coming to you, on the proposition side, what should I be saying to get your attention?

RD:  So, um, it's tough to say, because clearly there's lots of different-,

ST:  Yeah.

RD:  Territories one can play in, but certainly something we're very thoughtful about at the moment is, particularly if you're going to play in the insights and the data space, so that's something like our Smart Business product, then what we've learnt is, if you go and research that with customers, they'll always tell you they love it. "I'd love more information, I'd love more insight. Yes, sounds lovely." And we all think that. But they won't actually use it, necessarily. Because it's a vitamin. It's something that's, sort of-, it's one of those things you know you should do. It doesn't mean you will. So, where we are kind of focused is to go, "How do you get in to the workflow of the small business customer? What's the thing he or she has to do every day, that you can make easier?" And if you've got a technology, or a piece of capability, that they should do that, and my description was, if you need to reconcile the bookkeeping package and the bank account, that gives you a reason to go there, and now, once you're there, I can give you all these other really powerful insights that make your business more successful. But if you aren't-, haven't got a product or a capability that really gets you in to a workflow of a small business, that helps them run their day better, do something they have to do, more efficiently, adoption is hard yards, in my experience. And so we tend to look for that. We tend to look for a partner who we can work with, who gives us that option.

ST:  Absolutely. So, as you look in to the next two, three years, obviously Barclays has done a lot with the Rise programme, and now Eagle Labs, and there's-, there's more to come. What's exciting you, in the small business sector? What do you think the opportunities are? Obviously, there was a lending gap, and that's starting to close, we've seen OakNorth just became profitable-,

RD:  Mm.

ST:  I think there are a few things starting to-, to happen. Do you think we'll see more of this, and do you think there's-, there's more things to come from yourselves?

RD:  Yeah, I think so. So, certainly, we've got lots of exciting ideas, and lots of ways we can take our products forward. The bit I'm both excited and scared about, actually, I'll probably answer with a bit of both. So, I think there is some really transformative change coming to all industries, banking is one, through Open Banking, but to all industries. Um, I'll give an example. I saw a company the other day called Tesloop. They're basically a taxi company that run between San Francisco and San Diego. It's about a 200-mile round trip. And they've been running a Tesla S, night and day, for two years, and this car's done 480,000 miles in two years, and all they've changed is the tyres. It's not driverless, or anything like that, it's a driven car, but it's barely breaking down. Now, that's coming, right? Whether driverless cars are going to happen, or when, is a different conversation, I'm not qualified to say, but the electrification of the car fleet is probably going to happen. What does that mean for the small businesses I bank? And what's my responsibility, to really help them be successful? If you run an MOT centre, what job have I got to do, to help your business be the one that wins, in that environment, and to help you be really successful? And I think that wave of change, in different ways, and at different times, is pretty much going to hit every small business in the UK, and a big opportunity, I think, for someone like Barclays, is to be the enabler and the support of that, providing funding, providing advice, connecting you up, providing you the tools. So, that excites me and scares me, I think some small businesses will have a tough time, change is difficult.

ST:  Mm.

RD:  The other big opportunity, but bigger threat, is cyber fraud. Particularly small business owners-, I work for a guy called Ian Rand, who's the CEO of Business Banking in Barclays, and he has a really nice analogy on this, where he talks about, fraudsters used to target the vulnerable. That was the target market they went after, you know, it's an awful thing, and we-, I see those cases every day, and they're not nice to see. They've got a new target market now. It's the busy. Because busy people are vulnerable, too. If you're flat out, and you've got 100 choices to make in the day, you can do a silly thing, and you can share data, or click on a link that you shouldn't click on, and small businesses are the target of that, because there's no one busier than a small business owner. So, I'm very thoughtful about how do we keep small businesses safe, let them use these amazing new technologies that are coming online, Open Banking, and all it enables, open data, more generally, and what that brings, but keep them safe, in an environment where they are under threat-,

ST:  Mm.

RD:  And that's got to be banks, with regulators, and with the customer, themselves, actually, kind of educating each other, and working together. But I think they're both frightening, but also, kind of, opportunities, in their way.

ST:  And I think it's an interesting mix of ideas you've given me there. Before we-, before we finish the interview, I can't believe how quickly it's gone, there's a couple of questions we ask, you know, really to help people entering the sector-,

RD:  Mm.

ST:  And, kind of-, and kind of, like, looking to get in to fintech, looking to get in to banking. First and foremost, like, what's the best career advice you've been given, or would give?

RD:  The best career advice I've been given or would give. Um. So, I was thinking about this the other day, actually and why do I do the job I do? And, um, I came to the conclusion, whenever I'm at my best at work, two things happen. One is, it has to pull at my heartstrings. So, I mentioned earlier, my wife runs her own business, my dad runs his own business, my mum runs her own business. I literally grew up in a small business. So, I do the job I do at Barclays, because I think we can help small businesses be more successful, and I-, there's no people I respect more in this world than people who've set up their own business. I think it's the most incredible thing you can do. So, it has to-, any job I do, that I'm going to be good at, usually has to have something like that to it. It has to have a real emotional pull. And then, secondly, it really matters who I work with. I need to really respect my peer group, the people who are in my team, my bosses. The people are what-, you know, I spend more time in the office than I do with my wife and two young children, so it matters to me, that-, that-, that, kind of, really works. So, my career advice, which, it sounds a bit fluffy, but would be, be really clear on what are the one or two things that really, really motivate you-,

ST:  Mm.

RD:  And be ruthless about seeking out an environment with those in them. Once you find-, once it's got those things ticked, everything else is easy.

ST:  It's looking for those properties-,

RD:  It is.

ST:  Rather than-, because I think people go in to their career looking for the job, or the role-,

RD:  Mm.

ST:  That'll be perfect, rather than the things about-,

RD:  Yeah, exactly, the features, yeah, yeah.

ST:  The features of it, so it's an interesting perspective. And, like, how did you get started? Like, how did you get in to it?

RD:  My degree was in Genetics and Biochemistry, so, um, I'm not a classical banker, I suppose, in that sense-,

ST:  Which is an interesting point, isn't it? So many people, that end up with a type of job, didn't get the qualification for that job-,

RD:  Yes.

ST:  But we assume we have to be qualified in that job.

RD:  Yeah, so I-, I didn't, at all, and I was considering doing a PhD in that route, and realised I wasn't patient enough, so I got on a grad scheme at a big energy company, actually, so I started off in the energy sector, and then found this job called product management in big organisations. And, in particular, as someone who'd never been trained in, sort of, management science, or anything like that, I didn't really know that job existed in a big organisation, or what it was. And what I found was, there was this job where, it was my job to find an opportunity, or a threat, facing the business I worked for, come up with a solution to that, pitch it to the organisation, get buy-in, deliver it, and see if it had the effect I wanted. It's kind of like being an entrepreneur, just inside a really, really big organisation, with all the benefits, and sometimes challenges, that being in a really big organisation has. And, really, the moment I found that job, I've done that job in different flavours ever since-,

ST:  Mm-hm.

RD:  Because it's-, it's good fun, and you get to build things.

ST:  Absolutely. So, where can people find out more about you or business banking at Barclays?

RD:  Business banking at Barclays, go on to our website, Barclays.co.uk/business, and we're also on Twitter, so-, so, follow us on there. You can follow me on LinkedIn, I do more on LinkedIn than I do on Twitter, in a professional capacity, but most of the content we produce as a team is all through our Twitter account.

ST:  Fantastic. Thank you very much, Ross, for joining us on Fintech Insider.

RD:  Thank you very much, Simon.

ST:  And thank you for listening. If you like what you heard, subscribe to our podcast, leave us a review on iTunes, those reviews help us out massively. And, you know, befriend us on Facebook or Twitter. We're friendly souls. That's all for now.


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