Digital Disruptor Brands Insider Secrets: Lisa Jacobs, Funding Circle

“It really was the perfect storm when we launched in terms of technology coming into its own and attitudes towards banks after the financial crisis.”

Welcome to the second instalment of Brands2Life’s Appetite for Disruption interview series, where we chat to key figures behind some of the defining tech challenger brands and uncover the insider secrets of harnessing the power of digital to reinvent a category.

In this interview we sit down with Lisa Jacobs, Europe Managing Director of Funding Circle, the world’s largest loan platform for SMEs and a company that has revolutionised how small businesses access finance.

Lisa joined Funding Circle in 2012 as Chief Strategy Officer, leading Funding Circle’s entry into the US and Continental Europe as well as helping to mastermind the company’s IPO in 2018.

Lisa, Funding Circle was born in 2010 in the aftermath of the global financial crisis, offering a new way for small businesses to access finance. Talk us through how Funding Circle set about disrupting the SME loan market.

It really was the perfect storm when we launched in terms of technology coming into its own and attitudes towards banks after the financial crisis.

Historically, small businesses had been chronically underserved by lenders because they sit between consumers who are very easy to deal with en masse and corporates whose needs are more complex. Small businesses – landscape gardeners, shops, dentists – were falling through the cracks and really needed something more bespoke when it came to financing, especially when you consider half of employment in the UK comes from these SMEs.

In 2010, there had been a big leap forward in technology which meant it could now be deployed to solve some of the problems faced by small businesses. Then you had the global crisis which banks came out of really badly. People had lost trust in big financial institutions and started to look elsewhere for funding. These factors together with an understanding of the needs of small businesses formed the basis of Funding Circle’s disruption.

You’ve successfully challenged the status quo of the small business lending market and grown very quickly. What have been the key factors driving this growth?

One of the things we’ve always done is to remain very focused on small business lending and focused our technology and customer service development and our innovation on this market.

The other factor is having a very strong conviction internally. We have always believed what we are doing was right and we have communicated this very transparently with our team, sharing what our mission is, what our vision is, and what we’re focused on doing.

How has the Funding Circle brand evolved over the past decade?

In the early days it was very much about being seen and creating a voice and an energy around the business. So, we went out with a bold ‘no thanks banks’ slogan. Now we’re a more established business, we’ve shifted our comms focus to celebrating small businesses, exploring the stories of some of the amazing businesses we’ve supported with our funding.

The other key evolution in our comms is that we’ve increasingly realised how important trust for our brand. We always knew it was important for investors, but it’s just as important for customers, especially as more and more come to us directly rather than through other platforms. TV advertising has been an important channel in building this trust. People tend to assume if you’re on telly then you’re more trustworthy.

Many small businesses have been hit hard by the pandemic. Tell us about Funding Circle’s reaction to the events of the past year.

We agreed at the outset there were three things we were going to focus on. First and foremost, was supporting our customers, many of whom were going through the biggest disruption of their business lives. Second, was making sure we could start offering loans by becoming a provider under the Government’s Coronavirus Business Interruption Loans Scheme and third, was ensuring our business was sustainable.

We made sure we moved really quickly and were able to switch and shift. But the foundations for our reaction were already in place prior to the pandemic. For example, we knew small businesses needed quick access to funding to get through lockdowns, so we accelerated some of our technology builds and got our instant decision lending technology that we had in pilot ready to go live.

How does Funding Circle feel about regulation? Like any disruptor in the finance space, I would imagine you want enough to reassure people, but not so much you’re hamstrung?

Yes, it’s a fine balance. People have a misconception that all regulation is bad. Obviously, you need to make sure that the fly-by-night businesses are caught because that reassures the public, but you don’t want so much regulation that it stifles innovation. We’ve been able to use the public policy agenda to help celebrate small business success stories and communicate our value to government. Overall, I think the government has done a pretty good job evolving regulation as our industry grows.

What’s next in terms of disruption in fintech?

Right now, there’s small business lenders like us; there’s the monoline insurance businesses; there’s online foreign exchange; there’s the neobanks focused on a much better customer experience. But if you’re a small business or a consumer you don’t want to go to multiple providers for financial services. What I think the next period is going to be about is re-aggregating all these different services so the consumer can get them all in one place. Fintechs will use technology integrations so they can offer a broader wealth of different products. We’ll start to use machine learning in ways that we’ve not done before to get even better at credit assessment or make it even easier from a customer experience point-of-view. With technology getting even more sophisticated it will enable us to provide services before someone even knows they need it.

Lisa’s words of wisdom for digital disruptors

1. Be relentlessly focused. When you’re disrupting a market, there are so many opportunities to go after and so many different ways that you can build your business. It’s about saying no to 1000 different things.

2. Hire an A team, people who are passionate and dedicated. As a disruptor business you’re going to have to move at speed, so you need to trust these people to make the right decisions.

3. Adapt quickly. One of the greatest advantages you have over big incumbents is your ability to steer the ship in a different direction, which is why you need a resilient and flexible A team.

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If you missed our first interview with David Buttress – former CEO of Just Eat, now Venture Partner at 83North – on the categories ripe for disruption in the food delivery market and his top three pieces of advice for today’s digital disruptors, read his insights here.

Brands2Life has helped more digital brands go from early-stage market disruptors to brand leaders than any other UK comms agency. Our work with disruptor alumni like Just Eat, Match.com, LinkedIn, Groupon and Moonpig and our campaigns for the new generation of category innovators like Bought By Many and Rover.com has given us a deep understanding of the challenges brands face as they scale and transition from start-ups to part of the fabric of our daily lives.