Brought to you by LendingMetrics
BROUGHT TO YOU BY
Metrics M onthly
UK EDITION December 2019
In this issue WANT TO BE “NO-PLATFORMED”? Why lenders without automated underwriting are failing to compete online
In this issue Welcome Page 03
A LendingMetrics Christmas Page 04
In the news Page 05
Want to be “no-platformed”? Page 06
A new partnership Page 08
f
We were awarded the innovation star award
A Year in Review Page 09
for winning Best Credit Risk Solution 3 years in a row
Auto Decision Platform Page 10
ur
We launched our company newsletter Metrics Monthly
Do you use risk-based pricing? Page 11
S
Case study Page 12 live
3 eet
We were the first Open Banking platform to go with
Bank
eld ts
We grew our social media presence
02 | Metrics Monthly
December 2019 | UK Edition
Welcome
Contacts
Call us +44 (0) 2394 211010 Email us info@lendingmetrics.com Visit our website www.lendingmetrics.com
It’s the most wonderful time of the year, and it’s been an event-filled month for us at LendingMetrics. December saw us host our annual Christmas staff party as a way for management to thank team members for all of their hard work this past year. We also got into the festive spirit and raised money for charity with Save the Children’s Christmas Jumper Day . It was an intense month in UK politics as well, with the shock general elec- tion being held just two weeks before Christmas. You can read LendingMet- rics’ view on the election on page 5 .
Our headline piece this month asks if you want to be “no-platformed”? and considers why lenders without automated underwriting are failing to compete in the online market. Over the Christmas break, why not take a visual stroll through our highlights of 2019, in A Year in Review on page 9. This month’s case study looks at how not-for-profit lender Fair For You was able to significantly grow their loan book by automating their decisions. We hope you enjoy reading this issue of Metrics Monthly and look forward to seeing you in the New Year. Remember, if you haven’t subscribed yet, you can do so on our website, here .
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Metrics Monthly | 03
A LendingMetrics Christmas
Staff let their hair down to celebrate a successful 2019
Above: The LendingMetrics UK team celebrated the end of a great year at Langstone Quays Resort on Hayling Island, Portsmouth
The LendingMetrics team celebrated Christmas in style this month at the Langstone Quays Resort on Hayling Island, Portsmouth. The black tie event was attended by all staff who enjoyed an evening of drinks and dancing, including a three course meal.
The party was a great opportunity for staff to let their hair down after a busy and triumphant year, as well as a way for the Senior Management team to thank staff for all of their hard work during 2019, in what’s been our most successful year yet.
Head of Operations Paul Brown com- mented: “The LendingMetrics Christ- mas party was an excellent event. It was great way to celebrate the achieve- ments of 2019 as a team. We are all looking forward to seeing what 2020 brings!”
Above: Celebrating a strong first half of the year at our summer event
Above: Proud winners of the go-karting team event held earlier this year
04 | Metrics Monthly
December 2019 | UK Edition
In the news
PM Boris Johnson’s Conservatives won the election with a majority of 78
Christmas Jumper Day
We took part in Save the Children’s Christmas Jumper Day on Friday 13 th December!
We were delighted that the general election delivered a decisive result on the 13 th December.
The United Kingdom now has a government with a strong working majority allowing it to deliver on its agenda.
We got together for a cracking day in our festive knits and donated money to Save the Children, to make the future brighter for children all around the world. Every pound we raised will give children in the UK and around the globe the chance to grow up healthy and happy, so they can become who they want to be.
The news brings with it questions about how the results will affect the credit and loans industry. According to the Federation of Small Business- es (FSB), the result of a majority gov- ernment will be positive for smaller firms. National Chairman Mike Cherry said “small business owners will be hoping that today’s result helps to bring stability back to the economy. After more than three years of Brexit absorbing government bandwidth, the Conservative Party has pledged to tackle the many domestic chal- lenges that have been neglected during that time.” During the election campaign, the Conservatives promised they would
help small firms by introducing a reform package to end the late payment crisis and by extending and expanding business rates discounts. Whilst we won’t know if the new government will entirely keep these promises, we do know that it is as important as ever that they nego- tiate a good exit deal with the EU. Cherry stresses the significance of this: “We have to avoid a scenario where we suddenly crash out of the EU with no time for small firms to prepare for what’s coming next.” Brexit talk aside, a majority govern- ment is something that the UK has needed for many years. We as a company now look forward to 2020 with even greater optimism.
What could Save the Childen do with the money we raised? • £2 could pay for antibiotics for eight children suffering from pneumonia • £5 could buy a winter jacket for a child in Syria • £20 could provide a mother and newborn baby with vital supplies
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Metrics Monthly | 05
Want to be “no-platformed”? Director of LendingMetrics, David Wylie, says lenders without automated underwriting are failing to compete online
We can all think of historic examples of new technology that took a while to get off the ground. Fax, email, online shopping, banking apps, were all at one stage the domain of a select few ‘early adopters’. Then, after a while, they reached a tipping point and took off. When they did, the select few became many, and then the many became the majority, until you were pretty much left
in the Dark Ages if you did not embrace them. There aren’t too many people left who do not use a smartphone or a banking app. Automated underwriting is now just at the tipping stage, where it is beginning to move beyond the early adopters. Within 18 months, I know it’ll be a big priority for those lenders yet to have it in place. Like all the other technologi- cal advances that have gone before it, they’ll want it because they’ll suddenly see the advantages that make the dif- ference between success and failure.
The most obvious is that users of auto- mated underwriting can be quick, very quick, compared to businesses run along manual lines. Once an application is completed, the yes or no decision is practically instant. Only referral cases need take longer. Instead of the tradi- tional wait at the end of the application form, the consumer has a result. Then there is cost. Users have a big overhead advantage, which can be used to offer more favourable loan terms or increase profitability.
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December 2019 | UK Edition
Instead of a team of underwriters, they can process more applications with far fewer staff. Because the application decisioning is automated, the human underwriter only has to deal with un-typ- ical referral cases that require human intervention, or is free to focus on other areas such as customer retention. But, the killer advantage often over- looked, is that automated lenders can be open for business online 24/7, and make rapid lending decisions 24/7. Because the process is automated (barring a small proportion of refer- rals) there is no need to be restricted to Monday to Friday, 9-5pm office hours. I can’t overstate this when it comes to competing on the increasingly-used internet lending platforms. Those looking for a loan will often be time- short and want a quick yes/no decision. Not a ‘thanks for your application’ and a wait.
Only if you run automated underwrit- ing will you be able to give them their instant decision. What is more, the pur- chasing platforms that attract internet users surfing for finance demand this sort of decision speed. You can imagine the difficulty trying to participate in this channel if you have manual processes. You might have to provide a ‘dumb’ response to a lead that you have paid for, along the lines of ‘your loan is being considered, we will get back to you shortly’. You have bought the lead ‘blind’, as it were, and during the time you are doing your manual underwriting, the prospect is free to continue their internet searches and find other loan providers. By the time you get back to the pros- pect with the offer of a loan, they may well have secured another loan(s) else- where. They may then accept two loans, but can only afford to service one, so your profitable case turns out not to be.
In a digital age where consumers want instant gratification, the screen needs to read ‘Your online loan application is successful, please check your bank account’, rather than ‘Your loan request is being processed, we will be in contact shortly’. Once a prospect is on a site and clicking, you can’t afford to give them the time to look elsewhere, because they will. Finally, and perhaps more significant over the longer term, automated lenders are going to have the ability to leverage the emerging new sources of data from Open Banking. If you don’t automate your underwriting, you won’t be able to do this. They’ll be able to make smarter credit decisions online than you and be more accurate when judging affordability and suitability, which obviously results in a better performing loan book. And this data gap will get bigger and bigger as time passes.
+44 (0) 2394 211010 | www.lendingmetrics.com
Metrics Monthly | 07
A new partnership LendingMetrics and PayBreak announce partnership Fintech firm PayBreak has
ADP was a clear winner on tech, commercials, presales, communication and understanding - Robin Shuijff, Paybreak CEO “ ”
announced that it is set to use Auto Decision Platform (ADP) from LendingMetrics as part of its growth plans. The company, which specialises in digital point-of-sale finance through online retailers, will deploy LendingMet- rics’ award-winning ADP to build rules, scorecards and matrices using a variety of data sources so that they can make credit decisions within milliseconds. The platform will also allow operation- al/credit risk staff to control changes in real-time through a simple yet compre- hensive user interface. Neil Williams, Managing Director of LendingMetrics, said “This ADP part- nership with PayBreak takes us into yet
another sphere of lending within the retail and banking sector. PayBreak particularly liked the speed of decision making that ADP is able to deliver, and the facility to change rules in real-time. This last feature enables our clients to rapidly increase or decrease lending flexibility according to risk appetite, which is a really powerful tool.” Robert Schuijff CEO of PayBreak said “After considerable market research, ADP was a clear winner on tech, com-
mercials, presales, communication and understanding of what PayBreak wanted to achieve, this made the process very easy for us.” Multi-award-winning ADP, which inte- grates with all major credit reference agencies, was launched in 2016 to free lenders from the cost burden of manual loan underwriting, while also giving them access to the latest data analytics and the Open Banking revolution.
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December 2019 | UK Edition
2019 A visual stroll through twelve months of hard work and continued growth 5 awards We won
We were awarded the innovation star award
Innovation Award Innovation of the Year Credit Risk Solution Best Credit Information Provider Best Technology Partner
We achieved ISO accreditations for the second year running and with flying colours
for winning Best Credit Risk Solution 3 years in a row
We unveiled our
our customer experience survey results
We launched our company newsletter Metrics Monthly
VIDEO TRAINING SERIES
Ease of integration
Communication
Response time
Overall service
We went through 23 boxes of Quality Street
Likeliness to promote
We were the first Open Banking platform to go with live
Bank
12 We attended and held numerous events
Premier Power List top 20 We were selected to be of Credit Connect’s
We grew our social media presence
3 4
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Metrics Monthly | 09
Auto Decision Platform
Our online Auto Decision Platform (ADP) saves on time, money and errors, driving more profits to your bottom line. ADP assesses your applicants in real-time, 24 hours a day, and delivers consistent and accurate lending decisions in milliseconds. It’s a multi-award-winning automated decisioning and collections platform that puts you in control.
Make better risk and compliance decisions
Convert more applications
Improve collections
Control using the comprehensive user interface
Run scenarios in real-time
BOOK A DEMO TODAY www.lendingmetrics.com
+44 (0) 2394 211010
Lancaster Court, 8 Barnes Wallis Road, Fareham, Hampshire PO15 5TU
+44 (0) 2394 211010 info@lendingmetrics.com
Do you use risk-based pricing? If so, our Auto Decision Platform (ADP) can help! Lending involves risk, but our award-winning ADP can help with risk-based pricing. Find out more in our latest video!
Frequently Asked Questions What if I want to retain that human touch to my underwriting? The degree of automation is totally within your control. You can provide fully binding decisions or simply an approval in principle. You can even give binding answers to people above a certain credit threshold and an AIP to others requir- ing more in-depth investigation. The choice is yours. Isn’t this type of software expensive? Generally yes! However, ADP by LendingMetrics is a posi- tively disruptive force in the market and prices are tailored to your business. Affordable entry level pricing right up to enterprise. Put it this way: we think you’ll be pleasantly sur- prised when we show you what you get for your money.
Why is ADP different to other credit decisioning products? Unlike nearly every other product out there, ADP puts you in total control of changes to your decisioning; how you want to change it and when you change it. No more lengthy IT delays and no more charges for technical changes. The simple UI enables your operational staff/credit-risk officers to make changes at a user level (subject to permissions). Can I use ADP for champion/ challenge and retro analysis? ADP has several novel and unique tools to enable real time “what-if” and “champion/challenge” of your client’s data. This enables your business to test several possible improvements to your credit policy all at once, without impacting on your live lending activities.
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Metrics Monthly | 11
Case study Not-for-profit lender appoints LendingMetrics to automate decisions
Fair for You (FFY) is an award-winning, not-for-profit alternative to weekly payment stores. Consum- ers purchase items such as white goods and bedroom furniture directly from FFY suppliers by taking out a loan with them and repaying in flexible installments. About
their plans to significantly grow their loan book. Fair For You had their own in house Credit Risk Officer who designed their decision engine using Call Credit’s core bureau products and also Lending- Metrics’ OpenBankVision (OBV) product to collect 90 days of bank statement data. Their aim was to design a deci- sion engine that could automate as many decisions as possible, delivering good quality leads into the underwriting team so that agent workflow could be driven by tasks from the ADP, based on the warning rules that have been hit and thus improve productivity.
Following several calls between FFY and the LendingMetrics project man- agement team, and once the require- ments gathering phase had been com- pleted the implementation team took the lead. LendingMetrics took a total of 6 weeks to complete the seamless build of the decision engine in addition to a new Transunion component which was added to the platform, before passing FFY the finished ADP decision engine for acceptance testing. During the implementation phase FFY were also working with the LendingMet- rics analytics team to complete a free
FFY state that applicants only pay what they can afford, when they can afford it and the faster they pay it off, the less they pay. FFY are a not-for-profit Com- munity Interest Company (CIC) and members of Social Enterprise UK. They state their product is supported and designed by the consumer and that they are using the power of business to bring about social change. Approach LendingMetrics were appointed by FFY to implement ADP to support FFY in
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December 2019 | UK Edition
retro analysis on their LMX (Equifax) products to investigate the possible benefits of adopting a multi-bureau approach and discovering the possible uplift that such a move may provide. LendingMetrics are familiar with all aspects of automated decisioning and versed in multi bureau data sources, so they were perfectly placed to help FFY look at implementing a multi-bureau approach. They completed the analyt- ics of the Equifax retro, sharing their findings and results and even designing a bespoke scorecard. FFY decided to complete the project in phases, initially implementing their decision engine exclusively with Tran- sunion data, which facilitated a faster ADP launch.
Results FFY successfully launched and now have a decisioning model which is highly scaleable. ADP was delivered on time and within budget without any upfront fees from LendingMetrics, making the multi-award-winning plat- form a cost-effective solution without compromising on functionality. Summary FFY have successfully migrated to ADP with minimal business disruption and are now enjoying the benefits of real time credit risk decisioning. FFY and LendingMetrics are both looking forward to working together on phase 2 of the project and combin- ing their skill sets.
“
We were excited that this ADP appointment took us into yet another sphere of lending within the retail sector, with ADP now implemented across many different markets.
”
- Neil Williams, CTO
Thanks for reading our December issue of Metrics Monthly. We look forward to sharing more industry news, highlights and company events with you in the New Year. We’re also re-vamping our look in January 2020 so keep an eye out for our upcoming announcements. Wishing you a Merry Christmas and a Happy New Year!
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Metrics Monthly | 13
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