Profile: Right move at the right Momenta

Entrepreneur and Momenta founder Richard Stevens has an uncanny ability to predict emerging trends and then capitalise on them. Roisin Woolnough found out more

As CEO and founder of the £100m contingent resourcing company Momenta, supporting financial services companies to meet compliance needs around regulation, remediation and risk, Stevens has been at the forefront of change throughout his working life, and that’s where he wants to stay. 

That’s why he recently embarked on a strategy of geographic expansion and diversification, turning Momenta into a business with global reach. 

It all started back in the 1980s, when regulation was on the horizon in the UK in the wake of several high-profile mortgage and pensions scandals. Stevens was in the early days of his career in the banking sector, having abandoned his engineering degree. “I didn’t really want to be an engineer, so I dropped out a year early. Also, engineering was going through a challenging time but financial services was booming.”

Having decided that he was more likely to prosper in financial services, Stevens took a job as a trainee bank clerk at (as it was known then) the Halifax Building Society. A few years in and he saw what a lot of other people in the sector couldn’t or wouldn’t see – that regulation was coming and would have a huge impact in the not too distant future. Stevens could also see that it was an open market because so many people had their heads in the sand about the implications of regulation. “It was clear that there was broad denial in the industry that regulation would have a big impact.”

And he was right. Regulation soon swept across the UK financial services scene, precipitating a new, lucrative industry as a whole raft of companies needed people with specific skills to help them clean up operations and meet new and increasingly stringent compliance regulations. PPI (payment protection insurance), for example, the biggest scandal of them all, is still rumbling on and will cost over £50bn to resolve eventually, according to a briefing piece by Dominic Lindley, director of policy at the financial services forum and think tank New City Agenda. 

Going global

The UK regulation market has since reached a level of maturity and many organisations have internal teams with the necessary skills, so while there is still a healthy demand for Momenta’s services, the strongest growth area is, actually, now abroad. “The UK was a leader in the regulation of the financial services industry and probably still is,” Stevens explains. “But it is a mature market now in the UK, so are we going to see double-digit growth for remediation processes in the UK? Almost certainly not. But in other territories, where the trend towards greater regulation happened later, we are seeing double-digit growth.”

Going from a national business to a global one is not without risks, but Stevens was sure it would pay off because the need was there and would continue to exist for some time to come. “Regulatory trends are quite long,” he says. “We’ve been trying to tidy up financial services in the UK 
for years now.”

The first stop was Australia in 2016. Regulation and implementation in financial services in Australia is roughly a decade behind the UK, with The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry being launched in 2017. Momenta had definitely arrived in Australia at the right time. “We had ‘first mover’ advantage there. Being ahead of the curve is important – otherwise you are trying to get into a developed or developing market, which is hard.”

Likewise, when Momenta opened offices in the US in 2018, there was a strong demand for professionals who could help deal with federal regulation issues. India is another growth market due to national compliance alignment challenges because of the expanding global offshoring trends for back office functions. 

I’m as enthusiastic about the business as I was, if not more so” 

Partnership success

These may have been new markets for Momenta, but Stevens had no intention of going in cold. He is a big advocate of the partnership model, accessing new clients and markets through existing partnerships. Before Momenta had even set up shop in Australia, Stevens worked on leveraging its successful relationship with Deloitte UK to forge connections with the consultancy’s Australian arm. 

This is a strategy Stevens has pursued each time the company has moved into a new territory. “We reach out to partners and explore what the art of the possible is with them before we land. This means we can land and expand, leveraging the partnership relationships we have. The strategy really lends itself to geographical expansion and it means we are not landing in a country and having to go cold calling or door knocking to get work.”

As well as taking the partnership approach, Stevens has also formulated a direct to market strategy, building a sales and marketing team to get it off the ground. 

Four years on from that initial foray into Australia and Momenta now has about 500 people on the ground there, expecting this year to report roughly £38m in turnover from the region. The company uses these results to demonstrate to any potential new partners that the business model is working, and that it can replicate the success of UK operations in other geographies as well. Credibility and a good track record are important in any industry, but particularly so in the financial services, regulation and risk arena. 

Stevens attributes a large part of the company’s successful expansion and diversification to this partnership model. But the other significant contributory factor is his knack of making the right move at the right time. Had he stuck with UK-only operations, doing what he had done successfully for the previous 26 years, the business might have plateaued. Or worse, dipped when demand leveled off. “It was a sensible, good-sized, profitable business,” he says. “But to stay fixed on this market was a bit limited, particularly as it’s a very mature market in the UK now. I wanted to move the business on to the next level, so it has a broader base and generates more shareholder value.”

Flexibility

The model of providing contingent workers to meet specific short-terms needs is one that Stevens could and has applied to other business areas – digital transformation, financial crime, training and development, for example. In 2015, Stevens commissioned an external agency to conduct a market assessment report into the trend for using flexible labour. That report confirmed his view that the contingent resourcing model was only going to get stronger. “People are looking to carry less fixed-cost and be more nimble,” he said.

Stevens thinks the mass migration to remote working precipitated by Covid-19 has accelerated the trend for flexible workforces. At the beginning of 2020, Momenta’s workforce was completely office-based. Now, they are all working remotely, a shift that suits Stevens, the workforce and clients, he says: “The biggest advantage is that it makes staff geographically agnostic so you can fish in a much bigger pool of candidates.”

The plan is for Stevens to retire in a few years. But, before that, his goal is to ensure the long-term security of the business and his employees. He thinks his strategy of expansion and diversification will achieve that, and he expects to float the business in the future. “I’m as enthusiastic about the business as I was, if not more so, but at some point, I would like to retire and see the benefits of all that hard work. With the current strategy, I think the business has got fantastic longevity and will be around long after I’ve gone.”


Stevens: what it takes to be an entrepreneur

“I’m not a genius. I believe that the entrepreneurial spirit, hard work, attention to detail, focus and commitment are the ingredients to make a success of something. You have to understand the art of the possible but the clichés around hard work and commitment and staying true to what you are good at are true.

“I’m a great believer in sticking to what you’re good at and seeing how you can apply it in a new way. It’s entrepreneurial, but also a safe option, and you are more likely to be successful. You have to have this balance of understanding what you are good at but being able to take some risks – that’s a key attribute of the entrepreneurial spirit. 

“You have to work with the right people, internally and externally. You need to build business contacts and leverage those partnerships for mutual benefit. It has to be mutual benefit. You have to look after your end client, know what they want and provide that service flawlessly to achieve long-term success. I’ve never been an advocate of short-term opportunism. You need to find opportunities that have sustainability because long-term sustainability is key to building shareholder value.

“Find the business, find the people and then keep the people. None of these three things are easy, but if you can do them in a business like ours you can be successful. 

“Lastly, prevention is better than cure. It’s a mix of clearing up the sins of the past (cure) with dealing with the challenges of the future (prevention). The cure game has fuelled the business – sorting problems out is the lifeblood of this business, but clients don’t want to be putting out fires for ever. They want you to help the fires from starting. Prevention is really important. Being aware of what’s happening and what’s coming down the track is very important. If you are able to add value to clients in that way you are a true partner, rather than taking advantage of their misfortune.”

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