Paul Rippon at Mondo explains the risks of launching a start-up bank
As new start up Mondo advances towards launch, there are a lot of factors to consider.
One of the people who decide if the balance between risk and reward is suitable is Paul Rippon, chief risk officer at Mondo. Patrick Brusnahan speaks to him about his role and his career
Can you tell us what your responsibilities are at Mondo?
Very simply, I make sure the team knows what risks Mondo faces and that we’ve thought about how we will manage those risks sensibly.
When we begin lending on overdraft, I will also ensure that we do this fairly, sustainably and that customers borrow what they can afford to pay back. I want to make sure that our bank fits in with our customers’ lives.
How did you first get started in banking, Paul?
I’ve always been interested in finance. Back when I was a student, all the big banks were offering 0% overdrafts if you paid in your student grant. So I took out half a dozen overdrafts with various banks and put the money into a Government bond that was paying 13% interest. When one of the bank managers summoned me in for a lecture, I asked him to show me the rule which prohibited it. It was a short meeting.
After a degree in Economics and Statistics, I took a general banking job with NatWest who at the time were running their “smile” campaign — they suckered me in with that one!
I remember the joy of being given my first ‘lending power’ back in 1994, which meant I had the discretion to lend up to £250 on overdraft! I also remember going out in person to close down the business of a family firm that just couldn’t generate enough cash to pay back a loan we’d provided — that was a sad, sobering and very memorable experience.
And how did your career develop?
After an 8-year stint with Natwest, I took a role as of Head of Banking Operations at Norwich and Peterborough Building Society. I loved my time there — we were at the forefront of the industry. We implemented chip and pin, moved from Switch to Visa, and launched a current account that was accessible over the internet and could be opened by (nearly) every customer. I learned there that if you make something that people want the results can be amazing — I was once asked by the Board to slow down the number of customer signups!
I was parachuted into Northern Rock in 2006, just before its collapse and nationalisation, to improve the way mortgage lending was being done. It was a difficult time for everyone, customers and staff alike. I was part of the recovery team and there were some crazy things going on — secret meetings with some big UK names that would surprise you! I’m pleased to see that things are now working out.
More recently, I’ve held senior positions at Lloyds and Allied Irish Bank with responsibility for thousands of staff and millions of customers.
How have you seen the banking industry change over the last 25 years?
Sadly, not a lot. Bankers still think about financial products — unsecured loans, secured loans, revolving credit, fixed-term savings, ISAs, mortgages. People don’t always think like that — they need somewhere to put their salary, pay their rent, buy groceries and borrow & save. Somewhere along the way, banks became disconnected from real life.
Branches are weird. I talk to some Mondo customers who can’t understand what they are for. And yet banks spend billions of pounds supporting them.
I have met people in banks who have brilliant ideas for improvement — and then those ideas go to committee after committee, who water them down before eventually putting them onto roadmaps that are years long. It’s no wonder that nothing really changes.
I think the banking industry is going to split in two. The big banks will consolidate and become utilities — like the National Grid for electricity — unable to radically reduce costs, with outdated IT systems. Customer-facing banking will increasingly be looked after by new entrant banks and perhaps even ‘non-banks’ who listen to customers and are able to do something about it.
And what do you do when you’re not building new banks?
When I’m not busy helping to build the best current account in the world, I lend a hand on the farm. My wife Debbie runs one of the UK’s most successful alpaca farms up in Northumberland! I also lecture in personal and business lending at the ifs University College (the former Chartered Institute of Bankers).
What most excites you about Mondo?
I love the idea of a bank that takes care of my life. Giving me information and help when I need it, and shutting up when I want a bit of peace and quiet. When my friends and family stop asking me for advice about money and use Mondo instead, I know we have cracked it!
I’m also excited about the potential to change the way lending is done. Using modern technologies and all of the data that’s available out there, we can help customers borrow money cheaply, fairly and sensibly. I want to know the right questions to ask at the right time so that every customer can borrow the right amount. And then I want to help them pay it back in a way that is just right for them.