Despite Bradford & Bingley’s (B&B) recent advertising campaign, Peter Barrett avoids the Blues Brothers’ look, appearing in a blue shirt and tie. His glasses are rimless prescription, as opposed to black Ray Bann sunglasses, and he has forgone the hat.
Barrett has been at the B&B group since October 2001 when he joined as managing director of The Marketplace, one of B&B’s IFA networks. July 2002 saw him move to managing director, retail for B&B, adding responsibility for Charcol (B&B’s other IFA network), B&B Estate Agents, and the B&B branch operation, to his existing role.
Barrett came to B&B from Centrica where he headed up its Goldfish brand, and before that spent time with GE Capital where he helped establish its Northern European insurance operations and IFA life office. As such, he is very much at home in the consumer-facing financial markets and,despite competitive conditions, feels 2003 has a lot to offer the intermediary.
Although some intermediary brands Barrett oversees do compete with each other, they do so only on the overlapping fringes of their business. As he says, the idea is to cover the market rather than waste time trying to knock each other out.
While Charcol and The Marketplace are both intermediary operations, they play slightly different roles within the group. Charcol is an established name and was bought into the B&B group to raise profile, service the mid-to-top end of the market and allow B&B a leg-up into the mortgage broking sector. The Marketplace brand is by contrast more of a mass-market proposition, with a presence throughout the branch network.
On the mortgage lending side, B&B continues to service its existing mortgage customers, while new borrowers are dealt with by one of the intermediary operations offering products from across the market. B&B also has a non-conforming lender in Mortgage Express, but it does not come under Barrett’s remit. The estate agency business is multi-branded and operates nationally.
Although B&B and its subsidiaries are well-known brands, Barrett believes they could still be doing more from what he says is a slightly unusual proposition. After all, it is not every bank that you can walk into, and leave with a mortgage from another bank while everyone remains happy.
He comments: ‘I think the proposition that we have where a customer can walk into a B&B branch and walk out with a Halifax mortgage and everybody is happy is a strong one. We have to punch that proposition out to a wider audience. We should be able to help everybody and have to get that message across.’
One area that the different operations can help each other to achieve this is in IT and processing. Barrett explains: ‘The underlying systems and processes are being brought into line as much as possible. We also want to maximise our buying power and leverage our size with the lenders to ensure we are getting the best deals possible. We are investing significant expense to enable us to operate off a single platform and ensure we are not replicating processes. We want to have common standards and practices across our operations. We have not yet completed our systems integration, but we are making progress.’
The waiting game
However, in terms of developing the company’s business processes, Barrett is quick to point out that B&B, like everybody else, has to be mindful of incoming regulatory changes. Clearly the idea of spending money on IT advancements that may or may not be rendered obsolete by statutory regulation is not something high on his ‘to do’ list. He feels the new regulation could hold back much-needed industry initiatives, such as an aggregated website for intermediaries from where they could access all lenders in the market. And until the regulatory framework within which the mortgage industry will operate is cast in stone, such developments will have to be put on hold.
As he bemoans: ‘It is frustrating when you are unable to make the changes that you want, but we have to wait.’
However, Barrett remains aware of the role that technology will play and adds: ‘It will increasingly be an issue and a competitive advantage to those that implement it quickly and effectively.’
Going forward, efficiency is a priority. B&B has made much of its drive towards cheaper operational costs, and now that it is a listed company, investors are looking closely to ensure it is reaching its targets.
Although under the microscope, Barrett is determined that the values which were held high as a mutual, will not be sacrificed to the bottom line priorities of institutional investors.
He says: ‘We had an ethos and culture of customer service excellence as a mutual. What we have to do now is ensure we hang on to that, but deliver the appropriate numbers as well.’
Indeed, while there may be more pressure to deliver as a listed company, Barrett feels the move ‘has helped stretch our ambition.’
A strong hand
Barrett says there are many different areas where that ambition can be realised and B&B has to play to its strong points ‘ which in his view are customer service and face-to-face advice. But, like many, he feels interest rates and unemployment will remain low in the year ahead, and the key element in the mixer concerning continued growth will be consumer confidence.
However, he is worried that this could be affected by doom and gloom reports seen on a daily basis from economists and media pundits. Obviously lead economic indicators have to be watched, but he feels too much is sometimes made of daily twitches. Even if there is a downturn in the housing sector, Barrett believes the remortgaging market will remain very active and competitive, and those who have built their operations on good customer service, as he believes B&B has, will remain in good shape.
There will also be continuing online opportunities, although it is important not to ignore ‘the bricks and mortar’ as Barrett calls it. He says he is proud of how Charcol has won awards for innovation and service online, and agrees it is important it can conduct his business electronically. However, what is perhaps more important to Barrett is that around 40% of Charcol’s face-to-face business comes from online enquiries. It is a case of marrying the opportunities which technology affords with the benefits that good face-to-face service can provide, to create an all round customer proposition.
He claims one of B&B’s great strengths is that it is large enough to afford its operations some protection, but small enough to remain fleet of foot. Opportunism will continue to play a big part in the market, which saw one of its most innovative years in 2002, according to Barrett. Although there are no solid plans to make further acquisitions, he acknowledges that many offers do come through the door as intermediaries look to offload their companies before retirement, or move into different arenas.
And while there is no set strategy on what offers will and will not be taken up, he admits all are looked at and will be actioned on a case-by-case basis. This seems also to be the situation with the acquisition of mortgage books. Last year saw B&B purchasing £650m of business from lender GMAC-RFC, and further opportunities will be looked at again as and when they arise. Barrett says: ‘We will be opportunistic and look at what is available.’
Whatever happens in the months ahead, he accepts competition will be fierce, but is adamant that over 150 years of heritage will not be wasted. As he says: ‘We have a national presence and over 150 years of goodwill built up. We have to capitalise on that.’ The words do not sound idle and you believe Barrett will be a busy man driving B&B forward in 2003.