Nick Kozak for the Toronto Star
Case Studies

Medical lending works for iFinance, but Toronto company struggles with web development

416 777 9843,
Type of Company:
Consumer Finance
Mission Statement:
Number of Employees:
16 years in business, offers financing for medical, dental and veterinary treatments, cosmetic enhancement information and listings, and multimedia content.

Boasting an enviable profit spike of 530 per cent over the last 6 years, iFinance is growing rapidly and poised to keep expanding — if it can stay ahead of technological changes, and avoid spreading itself too thin.

The Toronto-based company’s core business is offering loans for popular, but normally uninsured, medical services. These include cosmetic and laser eye surgery, veterinary and dental procedures, and infertility treatments. A kind of online bank, the majority of clients find iFinance through Google searches. This means the business depends heavily on its web presence, and maintaining its position at the top of search results is crucial.

So far it’s been successful, and the consumer loan business has proven to be extremely lucrative. But the company is also pursuing a host of other initiatives — from web design and hosting to developing TV content — and custom codes all its software, websites and systems in-house. It’s difficult work, and the company’s websites may not be ready to handle the growing mobile market. In other words, serious changes are probably necessary for iFinance to maintain the success it has enjoyed so far.

Part of the problem is that the company has simply taken on so much.

iFinance manages several sister sites, including a plastic surgery information website, classifieds for medical supplies, databases archiving the confidential files of 70,000 clients, and more than 8000 dedicated pages for affiliate doctors and clinics.

Additionally, the business generates advertising revenue through an online digital TV channel, for which it produces videos about enhancement and surgery options. And it runs several call centres, where loan application tools and phone systems use proprietary software created in-house.

“We don’t outsource anything,” says iFinance’s President & CEO, Ann Kaplan. “Everything from software to arrears collections is done in-house.”

All this tech work means iFinance spends a full 10% of its annual budget on IT/tech services, and has five full-time employees focused exclusively on computer coding and maintenance, plus one liaison that mediates between IT and creative teams.  But Kaplan concedes that, even with a fairly large team, her staff sometimes struggle under the weight of development demands.

“We are constantly upgrading almost everything,” says Kaplan, adding that maintaining iFinance’s high Google ranking, protecting client information with encrypted coding and updating all of the company’s various platforms presents a constant challenge.

“We’re buried in this (technology loop), but can’t always be sure we’re on the right path,” she says.

Custom-coding with an internal IT team may have been the best option when the company launched in 1996 — while mainstream e-commerce was still in its embryonic stages — but things have changed quickly, and this is no longer the most efficient way to do business in today’s marketplace.

Kerry Morrison, an experienced digital marketer and CEO of Toronto’s Endloop Mobile, says iFinance’s approach has resulted in a mediocre front-facing website. This can pose a major problem when most of a business’ customers are finding it online.

“(It’s) poorly structured,” he explains. “There doesn’t seem to be any analytics tracking on the pages and I’d imagine that at some point the site will break, or stop functioning well in new browsers.”

The site, he says,  is unsophisticated for a company of iFinance’s stature, and built using an outdated approach. Morrison adds that custom-coding is simply slow, expensive, and inflexible in a world where open source site-building software is readily available at almost no cost. Plus, he says, most out-of-the-box solutions are frequently updated, meaning their corporate users aren’t forced to constantly develop in order to keep websites working on new technology.

In a world where web browsers are updated on a near-weekly basis, and new cell phones seem to hit the market almost daily, coding for every available platform presents a major challenge for iFinance.

Kaplan and her team hope to incorporate mobile applications, which they see as a major growth opportunity,  into their marketing strategy. But they’ll have to revamp their software first.

“(The website) doesn’t use the latest web standards,” says Morrison,  “so a transition to any kind of mobile usage isn’t going to go smoothly.”

Regardless, Kaplan’s concept is indisputably successful. The company has financed over $200 million in consumer loans and ranked on the Profit 100 and 200 lists seven times. And, despite the current economic sag, iFinance’s customer base continues to swell, with an average of 50 new doctors per month registering to offer their financing services.

And the company is modernizing some aspects of the business. iFinance switched its four call-centres from landlines to VOPI (Voice Over Private Internet, an on-line telephone system). While the switch was temporarily problematic — the systems failed initially and cost the company several days worth of sales — Kaplan says the ongoing cost savings and reliability have more than made up for temporary troubles.

Still, she realizes changing phone systems is only an initial step, and acknowledges her company needs to make ongoing, significant changes to stay competitive.

“We need to be constantly learning and changing,” she says. “Making money on the internet is a lot harder than it was even three years ago.”


As Interviewed by:

Canada could certainly use more small businesses with volumes like iFinance. But their concentration is divided, and in many ways the business model is unsustainable. They need to focus. This means thinking about where the company should spend most of its time, where tasks should be outsourced to people who can do them better, and what needs to stop because it isn’t generating revenue. The first thing they need to do is check divisional income statements for the different aspects of the business — consumer finance, contact centres, digital TV, and producing and maintaining websites, and determine what’s profitable. It seems to me that their main focus should be consumer financing, and they could easily outsource the contact centres and digital TV activities to other companies with more volume and expertise. And I’d absolutely stop producing websites. It takes too much time, they have little competitive advantage in that market, and I doubt it’s generating much revenue. In the end, making these changes will let the company concentrate on cranking up its volume of transactions, which should help increase profits and lead to continued success in the future.

by Peter Conrod

It’s an interesting business model — the company’s focus is on high finance and the end customer, but they’re very IT heavy and build everything in-house. They’re on the Profit 100, but it seems like doing all this work themselves is preventing iFinance from keeping up with the market. Their customers are finding them online, so staying at the top of search results is critical. There are lots of businesses out there that can build and maintain websites and SEO packages at very competitive rates, and I think it would be worthwhile to outsource this burden. But, if iFinance does want to keep everything in house, there are also lots of website-building templates and ecommerce services available online that can really streamline the web development process. The important thing is that the company chooses software that is constantly updated to work on new technology, such as mobile phones and tablets. Consumer habits are changing, and the company is going to need a mobile presence, so it’s crucial their services work across platforms without causing too many coding headaches.

by Tisha Rattos

iFinance has an interesting business model, and a unique offering, and they’re seeing profits and revenues grow. They’ve clearly found a niche, but a lot of the time these medium-sized businesses start off trying to be everything themselves — if they want to grow, they need to decide what their core business competency is, and concentrate on that. It doesn’t seem reasonable that the company would want to focus on the IT/web/mobile application side of the business. Mobile apps and dynamic websites are constantly changing, and keeping them updated takes a lot of work. With only five people, and especially if they’re custom-coding instead of using out-of-the-box solutions, the staff may be stuck doing maintenance and dealing with day-to-day issues, which leaves very little time for exploration and innovation. So they should find a dynamic IT partner that can update the company’s front-facing infrastructure and consistently funnel them ideas on where to go in the future. Customers, especially young ones, have a very low tolerance for anything that looks or feels outdated, and the company may lose their business if it’s stuck playing catch-up.

by Gary Isaacs

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