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We recently had the pleasure of welcoming a (fin)tech OG, Nick Ogden, to our offices to talk founding firms, online commerce and building ClearBank.
Some people can’t help themselves. It’s not their fault. They just have the drive to seek out new ideas, and build new propositions with the ability to change markets.
Nick Ogden is one of these people.
Not that he’ll boast about it. In his own, low key manner, he chalks it up to “being lucky, I guess” and good timing for someone with a passion for technology and curious about its new applications.
Founder? Yep he’s done that multiple times. Innovator? He commercialised online payments through WorldPay, which today handles about $1trillion annually.
What about challenging the status quo? He’s only gone and founded the UK’s first new clearing bank in 250 years.
Building the foundation of online commerce and payments
Ogden’s story, well the technology-related part at least, begins at a trade show in the 90s. Stumbling across a room of “IT geeks” he had a eureka moment when he saw the Mosaic browser (ask your parents...), sparking an idea about the ability of browser technology to find new goods and services ‘online’.
He transacted the first online shop payment from Jersey in the summer of 1994. While not exactly a roaring success, he showed that shop and idea to Barclays, which led to a joint venture, Barclay Square, the first bank-endorsed online shopping mall.
It was, by his own admission, “wildly unsuccessful” because the market wasn’t there. But again, the experiment and what he learned in those early days of online commerce eventually led to what would become WorldPay.
Nick Ogden on the origins of WorldPay
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The ins and outs of WorldPay and how it developed could form an hour long episode of Fintech Insider. But the biggest lesson is one that Ogden has carried throughout his career - how to rally people around something that doesn’t yet exist. To take the leap into the unknown and see if it works.
Nick Ogden: I always ask the question
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Not many people go to college to become a plumber
That continued through to, arguably, his biggest move in establishing the first new clearing bank in 250 years. Ogden had no desire to create a bank more that he felt the industry needed more competition and he was willing to tackle the problem.
The UK grocery market and financial services
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It was, he explains a laborious and highly secretive project, spending three months talking to the FCA, who he explains, were hugely supportive of the idea. His biggest concern was how to somehow keep the build of ClearBank, something that was setting out to add competition to a market that hadn't seen any for literally centuries, under wraps.
Keeping ClearBank secret while it was in development
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The ClearBank mission is a simple one that belies the complexity of financial services: it wants to create open competition in agency banking, by using the latest technology to ensure faster and more efficient payments.
To make that happen required months of further conversations, the back and forth with regulator who wanted evidence that they could connect to existing infrastructure such as Bacs, CHAPS, Faster Payments.
It is also different, being the only UK clearing bank that does not offer services direct to the consumer. That means it can offer a neutral and independent platform service that does not compete with its own customers.
Although it sounds easy - it's exceptionally complicated
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ClearBank officially launched in February 2017 and hasn’t stood still, winning numerous industry awards and plaudits. It announced it had, in collaboration with challenger business bank Tide, been granted £60m from Pool A of the RBS Alternative Remedies Package to build a new proposition for the UK business banking market. It has also announced a partnership with OakNorth and is working with Nationwide on the co-operative's new business account proposition.
Don’t use regulation as an excuse
So why hasn’t there been competition? It is not because the regulators'; around the world want to hold back innovation.
The UK, in particular, has a regulator and framework that is actively participating in innovation conversations. Ogden points to Mark Carney, in particular, encouraging competition, as well as a willingness to guide, to learn but also recognise that some of this will fail.
It's an excuse. I've haven't met a bad regulator
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If you haven’t guessed it by now, Nick Ogden is a pretty busy chap. ClearBank alone is a huge undertaking but that hasn’t stopped him taking on new challenges, recently agreeing to become the Chairman of Funding Options.
Why? With all the change occurring in the market, driven by the emergence of challengers who have yet to completely differentiate their stories. There’s a lot, Ogden says, “of ‘me too’ offerings, which is a shame.” Funding Options, he explains, is different and that’s why he’s keen to play an active role in the firm.
To hear much more about Nick’s entrepreneurial journey, founding Clearbank, as well as his thoughts on where the market is going next, download the Fintech Insider interview or watch on the 11:FS YouTube channel.
