Jim Higginbotham was given one of the most valuable commodities in the industry when he joined Wyelands Bank to develop and launch its asset finance division - a blank sheet of paper.
As leader of a new team within the bank, Higginbotham has a very rare opportunity to create and shape a new business without the legacy issues and systems that often act as barriers to change in established organisations.
The new business will formally launch in May, kick-starting a three-year plan that is predicted to generate £150 million in funding through a laser-like focus on its chosen markets and close personal relationships with customers.
Higginbotham (pictured) said: “It’s a privilege to be in at the ground floor and build something from the start.
“The bank’s ethos is about helping businesses unlock growth. We do that by listening to our customers and providing a solution that is relevant to them. The asset finance division is another valuable business offering for Wyelands Bank that reflects that ethos.”
Wyelands Bank was established in 2016 by British industrial entrepreneur Sanjeev Gupta, as part of his vision to support industrial business growth in the UK and around the world.
It is now part of the GFG Alliance, an international group of businesses owned by the British Gupta family.
The GFG Alliance operates across four main areas: industrial manufacturing; infrastructure, resources and construction; financial services; and property management.
The independently-owned bank is managed and regulated by both the Prudential Regulation Authority and Financial Conduct Authority.
Developing a new force in asset finance
The idea for the asset finance business came from a positioning paper written by Higginbotham when he was consulting for the bank.
He said: “I explained how to enter the asset finance market and where the sector opportunities were for a bank of their nature and size. Then Wyelands Banks CEO, Iain Hunter, invited me to work for them and put the plan into action, which was a great opportunity.
“On day one, he put a blank piece of paper on the desk and said, ‘there’s the plan, go and fill it’, which was great because everything in my career to that point had been building experience and capability in asset finance that I could now use in building the business.”
Higginbotham has more than 30 years’ experience in the finance industry, having started with Midland Bank, now part of HSBC, before working for Credit Suisse and then joining GE, where he became European asset director for its fleet arm, GE Capital Fleet Services. After two years at Credit Suisse, he returned to GE, first as European collections director for its equipment management division, then as risk director for its auto finance division. He then moved on to Lombard, where his roles included head of risk and head of corporate specialist sales, before he set up his independent consultancy.
In the six months since joining, Higginbotham has been developing the bank’s asset finance strategy and discussing the proposition with potential clients as the team prepares the business for its formal launch.
Higginbotham said: “As a new entrant into the marketplace, we are not looking to build volume and scale for the sake of it, so we are going to be very sensible about the deals we do to help businesses unlock growth.
“We are in a position where we can write business now and we are building a pipeline as we speak.
“We will be selective in where we choose to support and we will be relationship-led.”
The initial focus will be on the UK as the business builds volume and a customer base in its chosen markets, with manufacturing and renewables the first two core sectors.
A focused approached to market
Higginbotham is currently recruiting a team of specialists, with two employees dedicated to manufacturing and renewables originations respectively. They will be backed up by a senior team member who will provide analysis and play a wider coaching role in the business.
Higginbotham sees particularly strong growth opportunities in renewables finance, with a focus on underserved markets.
The renewables market is typically segmented into three areas, with very large infrastructure deals at the top, which require finance of more than £100 million and, at the bottom, consumer finance for small energy saving projects.
Wyelands Bank will be focusing on the middle market, to reflect its appetite to finance deals between £1-15 million. It will support projects related to battery storage technology and power generation through wind and solar energy.
This part of the market tends to require bespoke solutions, but without the volumes that would justify a large bank making the resource investment required to support it.
Higginbotham said: “A lot of the larger banks have polarised themselves around a very efficient and automated model to service the high-volume coverage needed for low-value ticket requirements, or a specialised and resource-intensive very large ticket offering.
“That’s where we have an advantage over larger banks. The opportunity in the middle to help businesses unlock growth is huge; there is meaningful demand from customers who want direct access to decision makers.
“They have almost been pigeon-holed by the larger organisations as too small to get a service offering and too big to fit into their volume proposition.
“There aren’t many organisations focusing on this segment with the approach that we are proposing.”
The renewables sector also provides opportunities for innovation in asset finance. For instance, there are potential developments of new business models to support battery storage, where funding could be for the battery itself, or linked to the revenue stream it will generate depending on its usage.
Building a compliant organisation
The asset finance division’s agility extends to being able to respond to changing compliance requirements and what Finance and Leasing Association chairman Richard Jones recently referred to as “increasingly interventionist legislation”.
Higginbotham said: “From a Wyelands Bank perspective, we can build-in compliance in terms of our core operational processes from day one. If you have an organisation that’s already running that hasn’t treated it as such a high priority, it’s a much harder proposition to get right. Compliance, oversight and regulatory preparations are not something you simply bolt on.”
A customer-first approach
Another key part of his approach to helping businesses unlock growth is avoiding complexity when dealing with customers and speaking in a language they understand, to ensure that they can identify the most suitable deal for their needs.
Higginbotham stresses the importance of being straightforward, having experienced the difficulty people face in coping with jargon-heavy organisations that he believes can be intimidating for customers.
He added: “It’s important to talk to customers in their own language and understand the problem they are trying to solve. Simple questions define the solution.”
This reflects Wyelands Bank’s own research last year, which found businesses find it hard to choose the right finance solution because they are being bombarded with jargon.
There are currently 30 different terms in the industry to describe just three financial products, a report by Wyelands Bank found, including receivables finance, which has 21 different names.
With a straightforward approach, he believes there is wide-ranging demand for the bank’s services.
Wyelands Bank research shows 89% of companies have experienced challenges accessing finance, with 70% of those saying their decision to invest in new equipment or assets was negatively impacted by not having access to funds.
Higginbotham said: “Whatever happens in the economy, businesses need to continue to trade, grow, and create jobs. The whole rationale for Wyelands Bank’s existence is to help businesses unlock growth and that’s exactly what we will be doing in the asset finance team.”