COMMENT
No going back
David Wylie, Director of LendingMetrics, says that, as the UK finally emerges from restrictions caused by the pandemic, the commercial lending sector is set to ride a wave of growth on the back of new technology. The commercial and business banking sector has never exactly been an early adopter of technology. The prevailing feeling has always been that businesses prefer a closer relation- ship with their bank over adoption of new technology and ease-of-interface. Unlike retail, the commercial lending infrastructure in place at most of our major lenders is designed around that fundamental truth: relationship trumps most other factors, and sometimes even surpass the cost of finance. Although some will say that close rela- tionships are its strength - especially those intermediaries for whom this is
their USP - it has obviously also been a fault line. It has led to sub-optimal systems remaining in place in this sector when they should have really disappeared years ago. There are, of course, new-en- trant exceptions such as Capify, Iwoca and Ondeck, who have brought fresh new approaches to the sector, but the default has been paper trails, in-person visits, lengthy decisioning, and unre- alistic demands placed on business owners’ time. If the pandemic has shown us any- thing, it’s that when we have to, we are able and more than willing to embrace technology to make our business and working lives much easier. The government’s multi-billion-pound SME business support package has been delivered in record time via swift online application and decisioning. There has been a tremendous effort involved in delivering this volume of finance to recipients in the shortest
possible timeframe. Infrastructure hurdles, such as build- ing API integration and digitizing the front-end for borrowers, have now been overcome. FinTechs have worked with banking executives and civil servants, applying their expertise so that funds can be distributed to as many business- es as quickly as possible. This pace simply couldn’t have been achieved without new technology. "The pandemic, and the resulting inability to conduct traditionally paper-driven, face-to-face loans, has forced commercial lenders to embrace the digital transformation." I’m not sure many of the enterprises now bouncing back would have been able to rebound quite so quickly, had
14 | Metrics Monthly
Q3 | 2021
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