Net banker counts on jam jars

IT'S BANKING, Jim, but not as we know it. Jim Spowart is the ebullient, workaholic head of Intelligent Finance(IF), the Halifax's telephone and internet finance arm. At times, the 50-year-old Scot seems more like an alien from the Planet Mortgage than a real human being, such is his enthusiasm for his 'integrated banking' service.

Some of his customers appear to come from the same part of the galaxy. While most people were tucking into their turkey, Spowart's followers were having much more fun on the phone and internet with IF, which took 150 applications for mortgages on Christmas Day.

These may seem very sad people. But Spowart is adamant that his big idea could save us all hundreds of pounds. Integrated banking - the jam jar concept, as he calls it - works like this: in common with the other banks, IF offers mortgages, savings, current accounts, personal loans and credit cards. The difference is that customers can offset their borrowings against positive balances in their current accounts and savings. The effect is to slash the cost of their debts - but the balances in each 'jam jar' of money remain separate, so that people know where they are.

Got it? Even Spowart admits it is a bit of a brain-mangler at first. 'The problem is for people to get their mind around the idea and to understand its value.'

In simple terms, he explains, if you have a credit card bill of £1,000, but are in the black to the tune of £750 in your current account, you could opt to pay interest only on £250 of the tab for your plastic. You would save money because the interest rate on borrowing is typically higher than that paid on savings.

He said: 'At first, people did not understand zero% mortgages or credit cards, they thought there was a catch. The truth is, there is no catch.'

False modesty is not a problem that plagues Spowart. 'I have been described as the most innovative banker of the decade,' he said. 'But to me it is all just common sense. If customers are borrowing their own money, they should not have to pay interest. We have a product concept which is unique. It is the way of the future. Research shows that 18m households could be better off by a total of £595m a year if they used integrated banking.'

The idea of looking after the pennies is stamped on Spowart's soul. A butcher's son, he began his career aged 17 as a cashier in the Cowdenbeath branch of the National Commercial Bank, later taken over by Royal Bank of Scotland. His early jobs included making tea and sweeping snow from the branch doorway.

Married to Janis for more than 25 years, he has two grown up sons. When questioned about his hobbies - colleagues say he often spends time at the weekend testing out IF's telephone service - he momentarily looks blank before confiding that he likes playing golf in summer. 'I'm a fair weather golfer.'

More to life than money

AT ROYAL Bank of Scotland he was hired by Peter Wood, founder of insurer Direct Line, to set up its banking operation. Wood, now also at the Halifax, revolutionised the insurance market in much the same way that Spowart plans to shake up banking.

But while Wood became a multi-millionaire, netting an estimated £35m by selling his companies to RBS, Spowart has never made a big fortune. Indeed, it is rumoured that he left his last employer, Standard Life, where he also set up a telephone and internet banking operation, because he felt his achievements had not been recognised in his pay packet.

He now earns around £500,000 a year, but if it rankles that he remains a poor relation to Peter Wood, he does not let it show. 'I have never been able to negotiate the deals that Peter has,' he said with a chuckle. 'But there's more to life than money.'

A former scout leader and church elder, Spowart seems to channel all his evangelical zeal into IF. He lives in Livingston, near its Edinburgh headquarters, and is proud of having created new jobs in his home area.

Despite complaints from trades unions that call centres such as IF's bring only low-paid, boring jobs, Spowart is adamant that it is a buzzy place to work. He certainly seems to inspire loyalty in his colleagues, 50 of whom followed him to the fledgling IF from Standard Life.

'He is very demanding,' said one. 'He thinks nothing of phoning staff day or night. Not that you are always delighted to take his calls, but he has such drive that he is a magnet for others. With him, it is more than just a job, and that is why staff are so loyal.'

IF got off to a shaky start. Its launch was delayed three times before it finally went live last November. It also promised to attract 500,000 customers in its first 12 months, but in the event, only 242,000 signed up.

These disappointments have failed to dampen Spowart's ardour. 'It is true that we have fewer customers than we said, but the average balances are much higher than we expected,' he said. 'We have set our sights on building a big bank and that is what we have done. We did £8.9bn of mortgage lending in a year, which is quite phenomenal. It proves the value of telenet banking.

We have a 9% market share, which puts us in the same league as Abbey National. It certainly puts us in the top five mortgage lenders, if not in the top three. To get this kind of market share in the first year of our business - well, it is amazing. We also took £2bn of savings. We are taking on the big four banks. Many of their customers are joining us.' We have had 160,000 current account applications. Customers are now prepared to move their bank account from the Big Four to get a better deal.'

Change in strategy

EVER THE salesman, he cannot resist adding: 'I want to say: for people with savings and any kind of borrowing, you should think about our product.'

Some believe Spowart's brainchild could come under threat in the wake of Halifax's merger with Bank of Scotland. At the time IF was set up, Halifax was staying away from mergers and takeovers, and following the then-trendy strategy of growing by building internet and telephone brands. That strategy has now clearly changed. Spowart's position could also be threatened by the canny BoS bankers on his doorstep, who have their own turf to protect.

The pressure is clearly on him to bring in the profits. Spowart professes to be unconcerned. Nor, he says, does he worry that his verve may be stifled by being part of a much bigger organisation. 'I have no difficulty in sustaining my entrepreneurial spirit - you can't keep a good man down. People are fearful of a recession but this is a great product in good times and in bad,' he added, irrepressibly.

'Our concept could apply equally to the small business banking market. We are working away on a few new things at the moment, but I am not going to tell you what.'

His unshakeable belief in the wonders of IF leaves him little time for rivals. IF's advertising got it into a playground dispute with Virgin One this week, with harsh words exchanged after an ad featured a customer who defected from Branson's operation to Spowart's.

He said: 'There is no other service like ours. Egg is just old products on new systems. We have never set out to be a stand-alone internet bank, because we always thought customers would want to talk on the phone as well.'

He dismissed fears that IF is simply cannibalising customers from Halifax and BoS. 'Around 90% of our customers are new to the group,' he said.

Despite Spowart's fervour, many people are still baffled by 'integrated banking,' and prefer to stick with their familiar High Street branch. But the Big Four cannot afford to be too complacent. For if Jim fixes it, we will all be doing our banking in his computerised jam jars.