I am keen that we cast the FinTech net wider than Silicon Roundabout’s startup ecosystem and to this end this week I’m delighted to feature Eclipse Financial Systems which is run by serial finance entrepreneur Michael Ward.
Eclipse is an independent financial services technology company, supplying comparison engines, real-time responsive customer journeys and a range of other quote and apply solutions for financial services firms. The bespoke software puts customer behaviour at the heart – resulting in more accurate and customer-centric product journeys that deliver higher revenues for financial services brands.
Our questions are in bold.
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1. Who are you and what’s your background?
I am the Managing Director of Eclipse Financial Holdings, which owns Eclipse Financial Systems (an IT business that specialises in financial services) and Eclipse Financial Management, trading as PayingTooMuch.com, which helps provide online comparison and personal services in the retail insurance sector.
Born in Bolton, I attended Bolton School before going on to Liverpool University where I studied Physics and graduated in 1986. After a short spell working for the MOD, I leapt into financial services with John Charcol selling mortgages which was the starting point for my very exciting career (so far anyway)!
John Charcol taught me how to sell, but it became obvious within a few years that if I was to move away from just arranging mortgages and working for someone else, I would need to move on, so I joined Scottish Amicable (now Prudential) as an appointed representative. Here I gained an Advanced Financial Planning Certificate, which was relatively highly rated at the time but is now commonplace in the revolutionised financial advice market.
This was my first trading business (Ward Mortgages) which later went on to be sold for around £20m!
During the 1990’s Ward Mortgages grew slowly and occasionally it shrunk too! There were some stressful, nearly running out of money moments, which included me having to borrow money on my credit cards to pay the bills. Thankfully the hard work paid off and by the late 90’s the business was becoming more substantial and successful.
Then, in 1998, I spotted an opportunity to set up a subsidiary selling simple life insurance (not regulated by FCA at the time) off the page via newspaper advertising. Up until then, all life insurance was sold face-to-face by a financial adviser which was expensive and difficult to scale.
So ‘Direct Life’ was born to sell life insurance direct and the business took off.
We went on to build our own ‘quoting’ systems, holding the rate tables for all the UK’s leading life insurers, and in late 1999, became the first business in the UK to provide quotes on the internet, believe it or not before any of the large price comparison sites you see today.
The business continued to expand, and in April 2000 attracted VC investment of £1.5m from Lloyds TSB Development Capital. Shortly afterwards, in 2001, Skipton Building Society bought out the VC and became the majority shareholder.
Over the period from 2001 to 2008, I was the MD of Direct Life, a Skipton subsidiary. Together we increased the turnover from a few million to well over £25m by building better and better IT and engaging across the full breadth of the financial services distribution landscape. Skipton Building Society were without doubt an excellent majority shareholder and in their day nurtured some high quality management teams which in turn created some great businesses.
In 2008, I felt the time was right to encourage a sale of the business and so after engaging experts to help us, we received five offers to acquire the business. In the end, Cardif Pinnacle, a subsidiary of BNP Paribas bought the business.
In 2011, I left Direct Life and after a short spell getting bored decided to start all over again!
So today, I own a holding company with two trading businesses specialising in IT and financial services. With the benefit of hindsight of course, 2011 was a really bad time to start a new business, but I can report that 2014 was the year we surfaced and made profits, an expression you’ll be familiar with if you’ve ever started your own business. So we’ve made it; we have a sustainable business now that doesn’t rely on any one big trading partner and doesn’t suffer some of the risks I’ve faced previously.
2. What is your job title and what are your general responsibilities?
Managing Director. I basically manage the board papers, which is an easy way to say I do everything that isn’t retail customer service or IT/project related. The highlights would be creating and maintaining a marketing plan, constant consideration of business strategy, key partner relationships, compliance, governance and of course PR.
3. Can you give us an overview of your business?
Eclipse Financial Systems is an IT business specialising in online customer journey management. This includes designing and building quote and apply systems using a platform called ‘Salmon’ (which stands for Sales and Leads Monitoring) where we have demonstrated an ability to double conversion rates over traditional quote and apply designs. Some of the UK’s best known insurers are already clients and we are in detailed discussions with an international client.
My other business, PayingTooMuch.com is an online retail financial services business. The USP is ‘online comparison and personal service’, a proposition the leading price comparison sites will struggle to introduce now their processes and cost structures are cemented in place, (it’s very difficult to disrupt yourself!)
PayingTooMuch.com is best known for life and travel Insurance where we specialise in helping travellers with pre-existing medical conditions (which is a growing market). Through the sensible use of technology, personal service and a reward scheme the client list is growing rapidly across all products.
4. Tell us how you are funded
Eclipse has been entirely funded from my own pocket but is now self-sustaining which is very good news. We are hungry and impatient for profit; growth will follow later. It’s very dangerous to get these two the other way around, a mistake many large business make when they use expressions like ‘but does it move the dial’!
5. Why did you start the company? To solve what problems?
Online financial services hasn’t fared so well in recent years. Comparison sites aren’t trusted (in the way they should be now) which is partly their fault. As an example, customers with medical conditions are regularly paying more than they need to with big brands who claim they look after them, (when they don’t in my opinion.)
Life insurance sales are falling, in fact by over 25% in the last 5 years! The big insurers and the FCA are failing the public. Yes they’ve killed off mis-selling, but they’ve also killed off any selling at all (!) which means people are going under-protected.
6. Who are your target customers? What’s your revenue model?
We are keen to work with all financial services brands that wish to expand their online operations. Companies that make good clients are those that understand that they actually need to run their business with the customer in the middle and stop trying to take advantage of them. We also see an opportunity for financial services brands who are weaker online, because if they don’t embrace digital transformations soon, they could find small FinTech companies have eaten their lunch.
7. If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
The number of ‘marketing companies’ that are advertising on search engines so they can then sell on the lead has exploded. In my view they don’t help the customer, (remember the customer is the most important part of the commercial model) or the adviser. They should be more closely monitored by the regulator who could impose rules on the search engines if they so wished.
8. What is your message for the larger players in the Finance industry?
Watch out, your fixed costs are too high, you’re going to be nibbled from the bottom up and one day you’ll suddenly realise that you’ve got the fight of your life on for survival.
9. What phone are you carrying and why?
iPhone 5S, you have to use what everyone else is using if you want to understand your clients.
10. Where do you get your industry news from?
11. Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
It’s likely to be simpler financial services products, where people can get the products they want and need without unnecessary barriers they still face today.
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Thanks to Michael for his answers today. You can reach out to him here on LinkedIn.
If you’ve any suggestions for other hot FinTech companies (startup, or established ventures) that we should be profiling, I’m all ears. Don’t hesitate to drop me a note at email@example.com. There’s more information on this page.