Inside the Nottingham-based online bank with roots in IKEA
- Ikano Bank has been based in Nottingham for more than two decades but it has only recently began to become associated with the city
Nottingham Post spoke to one of its UK bosses, Simon Ripton, about how it has evolved its brand and offering, as well as its connections with Swedish furniture giant IKEA.
The first thing anyone visiting the UK headquarters of Ikano Bank will notice is that almost the entire office comes from IKEA. Desks, chairs, tables, even the mugs and glasses – all the furniture and furnishings are a product of the popular Swedish ready-to-assemble chain. That's because the Ikano Group's origins begin with IKEA, its "second cousin" business that is also owned by the Kamprad family. And while they don't officially work hand in hand, the furniture giant's values are present within the online consumer bank.
Simon Ripton, Head of Consumer Lending and part of the Nottingham office's leadership team, says: "If you do something very simply, efficiently and well, if you understand the business well, then you understand every aspect of the value chain and the customer's journey. If you understand that in detail, then you can make it more efficient and pass on the benefits to your consumers.
"Ingvar Kamprad's ethos was to make expensive furniture affordable to many people and that's the same with what we're doing here. Our direct to consumer side of the business is simple, personal loans.
"We don't do any big corporate or property lending – it's a very simple low-risk business, which is consistent with the values of IKEA."
The Ikano Group was originally a part of IKEA, which was founded by Ingvar Kamprad in 1943, and was made up of activities that served his core furniture business, including real estate, financial services and insurance.
In 1988, Ikano became an independent group of companies, still owned by the Kamprad family, and they branched out from their original purpose.
One of those was Ikano Bank, which initially provided finance for customers wanting to spread the payment when buying IKEA furniture, and it now also works with other retailers such as New Look and Karen Millen. It has 10 European operations, with its headquarters in Sweden, and Britain is one of the top three.
The UK arm of the company has been located in Nottingham since 1994, with its head office at Waterfront House in Station Street, looking out towards Trent Bridge, Meadow Lane and the old factory buildings in Queens Road.
"It's a super view and for us it works because of its close proximity to the train station – it's a really convenient location," says Simon.
"Nottingham has become a bit of a hub for data-centric businesses, with the likes of Capital One next door to us and Experian. It's a great place for us to grow with affordable housing and good transport links locally and to London.
"We could easily set up a business in Canary Wharf but the expensive rent would be passed on to the consumer with the cost – so being based here means we can offer better value."
The office accommodates 250 staff and recently expanded from two to three floors. Wind-up desks – popular in the Nordic countries – that can be adjusted by staff to either sit or stand at while working have recently been introduced to improve health and wellbeing.
Adding to the third and fourth floors – where the customer service centre and management functions like credit risk, finance and analytics are based respectively – is a new informal communal area on the first floor. It opened earlier this year and acts as the main reception and a meeting point for group discussions with circular booths and a "creative wall" whiteboard, while it also has a presentation area and two treadmills.
Another part of Scandinavian culture being embraced in Ikano Bank HQ is "fika", a Swedish concept in which workers down tools to have coffee and pastries.
"It's a way of bonding with your co-workers and taking a bit of time out," says Simon. We were conscious that we didn't really have a space here to do that but were very keen to bring a bit of Scandinavia to Nottingham, and that bit of Swedish culture in particular because to work together effectively you need to get to know each other.
"Although we're separate from IKEA, the thing we take from it is that value of working together."
Simon, who previously worked at major banks including Abbey National and Santander, joined Ikano in January 2015 to head up the Direct to Consumer side of the business, a new service at the time that enabled customers to apply for loans online and open a savings account.
The move created up to 30 jobs but it mainly used existing skills and capabilities to expand its offering. Typical customers will be people wanting to make infrequent large purchases, such as buying cars or carrying out home improvements – in line with the finance side of the company, where consumers might buy kitchens, sofas or beds.
"The consumer loans market is worth something like £20 billion to £30 billion per annum in the UK – it's a huge market and we only need a small share of that to be a success," says Simon.
"It gives us a chance to grow in Nottingham so it's very important to us, and I'm sure over the next couple of years we'll get to a point where we need more staff.
"There's no shortage of opportunities for a bank like ours. The market has historically been dominated by a small number of big players but the internet is a great leveller and made it easier for us to compete."
Despite the economic uncertainties of Brexit, lending volume hasn't changed significantly. Simon adds: "We've seen no change to the numbers of people taking out loans that we can relate to Brexit. Our retail partner business continues to grow year upon year and though our Direct to Consumer business is new, we had a plan at the beginning of 2016 that we've implemented and which remains unaffected by Brexit. It's very much business as usual."
With the new business line, no longer is Ikano just a company that operates behind the scenes as a finance partner with shops at the point of sale, giving it a reason to build its own brand.
People in Nottingham may associate the company most commonly as the face of the Robin Hood Marathon and Half Marathon, an event it has sponsored since 2013. Ikano staff get heavily involved every year with the event, with 780 employees across Europe either taking part in the race – including CEO Lars Thorsen – or completing miles in other countries.
In total, almost 7,000 miles were covered and about £88,000 was raised for Rainbows Children's Hospice, in Loughborough.
The sponsorship is also part of a deliberate push to become a more mainstream business, operating in the prime online loan space for ordinary people, rather than payday loans for the desperate or complex lending for corporations.
"Even though we've been here for more than 20 years, a lot of people haven't known about us because we hid behind retailers," adds Simon.
"But as we invest in our brand, people are starting to associate Ikano with Nottingham, which is great for us and the city."