The founder of Egg and First Direct has built two businesses around the philosophy of improving the retail banking customer experience. He tells Michelle Price how he intends to continue to change the face of the web.
Meeting Mike Harris, it is easy to understand why the serial entrepreneur believes that personal enthusiasm is such a powerful business tool: it is quite evidently – as Mr Harris himself believes – his strongest quality. “I can embroil people in my own enthusiasm: if I find an idea I like, I can get it funded – it doesn’t matter what it is,” he says matter-of-factly.
This rare ability (coupled, it is clear, with dogged perseverance) has enabled Mr Harris to found and build two of the retail banking industry’s most pioneering enterprises – the first telephone bank, First Direct, and the first internet-only bank, Egg.
In his newly published book Find Your Light Bulb (a “would-be handbook for entrepreneurs” that reads a little like a self-help book) Mr Harris outlines the means by which he was able to harness technology platforms previously unseen in the retail banking industry in order to deliver improved banking services at a reduced cost.
Customer focus
Both First Direct and Egg aspired to dramatically improve the entire retail banking customer experience – a business philosophy that is now sweeping the industry, says Mr Harris.
“The hot topic out there whether you’re a service or product provider, is customer experience innovation: that is, you don’t have to innovate entirely on products.”
Both start-ups were initially panned by critics, who believed that consumers would feel alienated by remote, technology-enabled services. But in many other respects, says Mr Harris, the two endeavours were radically different.
First Direct represented an insight into that now much-scrutinised vehicle of retail banking – the branch: “Thirty per cent of people never visited them, and those who did didn’t like what they saw,” he says. “We thought we could do a better job if we did it on the telephone: the idea was very much to reinvent current account banking.”
Good Egg
Egg, meanwhile, emerged during the heady days of the dot-com boom, when commercial faith in the transformative power of the web was at its zenith. “But with First Direct, there was no real technological or strategic demand for change in banking: the world was stale,” says Mr Harris.
Both projects, however, enjoyed continuity in the form of key personnel, many of whom had followed Mr Harris from First Direct to his later post at Prudential – from which Egg took shape. “We’d just taken on current account banking at First Direct and we thought ‘what about everything else in financial services’,” says Mr Harris.
Unlike First Direct, however, the original Egg vision – evidently buoyed by the feverish optimism characteristic of dot-com start-ups – penetrated far beyond the mechanism by which retail banking services could or should be delivered. “First Direct wanted to be the best banking service in the world; with Egg we were trying to create a global powerhouse.”
Mr Harris and his team wanted not only to change the way in which banks deliver services and products to customers, but to change the way in which banks communicated with their customers and conceptualised their financial needs. “The way banks talk to people about money doesn’t make sense to them: that was the fundamental insight,” says Mr Harris. “Customers don’t think in terms of mortgages or loans, they think in pots: a new kitchen or a new house. Egg was more about how we could help people sort out their money.”
Egg was, in many respects, ahead of its time. Now, says Mr Harris, the online digital revolution is close to its true realisation. “It is a different world,” he says. Today, he observes, 80% of financial services sales originate on the internet. This will create compelling opportunities for non-financial services organisations that are the web’s practical owners – most notably Google. “Most of those searches originate with Google – which has super-service and uptime. If I was Google I would be thinking ‘why should I let this pass through?’”
Another innovation
Mr Harris, who is also chairman of innovation at Royal Bank of Scotland, is in the midst of building another innovative, if dubiously named, web company, Garlik, which hopes to protect against the associated dangers of a web-based world.
This time a technology venture, Garlik aims to become the de facto standard for the protection of online identities using a platform based on the semantic web – an evolving extension of the worldwide web – which can both locate an individual’s personal online data and understand its context.
It is a pioneering, highly immature area of technology that even Google has told Mr Harris it cannot scale. “But we think we can,” he says. Typically enthusiastic about its prospects, Mr Harris might again disprove his critics.
CAREER HISTORY
Present: Chairman of innovation at Royal Bank of Scotland and chairman of Garlik.
2005: Co-founder of Garlik.
1996: Founder of Egg Banking, previously Prudential Banking.
1991: CEO of Mercury Communication.
1988: Founder of First Direct.
