Metrics Monthly | August 2019 | UK Edition

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Metrics M onthly

UK EDITION August 2019

In this issue A NEW INTEGRATION

Find out who has made the smart move to ADP for cutting edge credit decisioning

In this issue

Welcome Page 03

Will the winning streak continue? Page 04

LM team event Page 05

A new integration Page 06

Case study Page 08

FREE credit risk workshop Page 10

Time is money Page 11

Tap and go loans? Page 12

Image by: Gordon Williams

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July 2019 | UK Edition

Welcome

Contacts

Welcome back to the second issue of our monthly company newsletter! We hope you enjoyed reading our first issue, in which we celebrated receiving not just one but two new awards for our innovative Auto Decision Platform (ADP). We also announced an exciting new integration between our revolution- ary OpenBankVision (OBV) and TSB Bank. As the first open banking plat- form to completely integrate with TSB, this brings our percentage coverage of UK banks to within the high 90s. This month we have more exciting news, features and articles to give you something to read during the last few days of summer. August has been another busy month with a new appointment to our ever-growing Sales Team, and our annual summer event, which saw staff

from our Fareham office take to the bowling lanes and get competitive! Our headline story is about a new inte- gration with BrightOffice CRM, who have made the smart move to auto- mate their credit decisioning with ADP. Head over to page 6 to find out more about the integration partnership. We’re also offering you the chance to book a FREE credit strategy workshop with our industry experts, and find out how to gain valuable insight and move ahead of the competition. This issue’s thinkpiece by credit risk pro- fessional Andrew Tierney is considering the potential for ‘tap and go’ loans, as Open Banking opens up a new era of ultra-fast loan decisioning. If you enjoy reading this issue of Metrics Monthly, you can subscribe to our monthly edition via our website here.

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Metrics Monthly | 03

Will the winning streak continue?

LendingMetrics shortlisted for 5 new awards After winning two innovation

• Credit Risk Solution • Innovation in Credit • David Wylie - Person of the Year Among the nominations is LendingMet- rics’ founder David Wylie, who is short- listed for Technology Innovator Person of the Year. Honoured to be shortlisted, David Wylie commented: “Congratulations to LendingMetrics as a whole; the awards we have won are as a result of a team effort, as are these 5 nominations. I am truly honoured to be named amongst such a great group of industry peers, but mostly I am just pleased that our efforts to bring true innovation and positive disruption to the credit technology market are being recognised in this way. Win or lose, I will continue to encourage the Lend- ingMetrics family to push the bounda- ries of their imagination and drive true innovation.” LendingMetrics already boasts a long list of awards including ‘Best Credit Information Provider’ and ‘ Best Use of

Technology – Supplier’ , and it’s no sur- prise that our revolutionary platforms have received so much attention recent- ly, with our OpenBankVision (OBV) being the first Open Banking platform to go live with TSB Bank last month. In addition, our Auto Decision Platform (ADP) has been turning heads in the credit lending industry with its ability to orchestrate and execute the entire credit decisioning model and allow lenders to make instant changes, in real time. Our most recent awards for ADP include the Consumer Credit Awards’ ‘Innovation of the Year (Partner)’ award in July and Car Finance Awards’ ‘Innovation Award ’ in June. With some strong competition, we’re hoping that our winning streak contin- ues and are looking forward to an enjoy- able night at the awards in September which will be hosted by the Credit Ser- vices Association (CSA) at their annual Gala Dinner in Newcastle. To find out more about our award-win- ning platforms, call or email us.

awards in the space of 2 weeks, we’re thrilled to announce that LendingMetrics is continuing its streak of recognition by being shortlisted for the Credit & Collections Technology Awards in five different categories! The Credit & Collections Technology Awards were launched in 2017 and aim to recognise and reward technological innovation. Now in its third year, the 2019 awards will celebrate excellence and innovation in the UK credit and collections industry. Each category is judged by an independent panel of industry experts, who will examine tech- nological solutions in lending, credit and collections innovation. The shortlist was announced today and we are thrilled to be finalists for five awards: • Affordability Assessment Solution • Credit Reference and Information Solution

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August 2019 | UK Edition

LM team event Fareham team take to the lanes TheLendingMetrics teamhadagreat evening out at the annual summer event this month, which saw them take to the bowling lanes to show off their skills at Gunwharf Quays in Portsmouth. Between the teams, the overall winner was Andrew (rep- resenting the USA) followed closely by LendingMetrics CEO David Wylie.

BDM Steve Beard joins the team Steve Beard has been appointed as Business Development Manager and joins the Sales team in Fareham this month. Steve comes in with 15 years’ experience in sales, including SaaS platforms and IT. Steve is very ambi- tious and is looking forward getting involved and learning about our prod- ucts in more detail. Paul Brown, Head of Operations, commented: “Steve will be a great addition to the growing Sales team. To announce another new Business Development Manager shows that LendingMet- rics has progressive growth plans for the next year and the need to further increase head count due to the amount of enquires makes this an exciting time for LendingMetrics.”

Afterwards, the team celebrated a successful first half of the year with exotic cocktails and food at South American restaurant Las Iguanas. The event was a great opportunity for staff to let their hair down after a busy month, as well as meet new starters David and Robert ahead of their joining the team next month.

Business Development Manager Steve Beard

Above: The LendingMetrics team at Hollywood Bowl and Las Iguanas in Portsmouth

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Metrics Monthly | 05

and LendingMetrics

A new integration

Various management software companies have been upgrading by adopting ADP by LendingMetrics for their cutting edge credit decisioning. loan

We are delighted to announce that BrightOffice Limited are one of these, having recently integrated with our award- winning Auto Decision Platform.

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August 2019 | UK Edition

LendingMetrics founder David Wylie commented: We are delighted to have completed this integration with BrightOffice and look forward to helping more of their clients to surge ahead of the competition with a market leading auto decisioning strategy. ” “

BrightOffice has specialised in the Alternative Business Lending space over the last three years and has gradually gained traction in the wider Consumer Lending market. However, the company is constantly looking at ways to enhance the solu- tion for the benefit of its customers and identified industry leading auto credit decisioning functionality as a strategi- cally important requirement. ADP offers a highly secure and scala- ble decisioning solution integrated to all of the major credit reference agen- cies as well as Open Banking. Lenders can action real time credit risk changes via the ADP user interface and utilise

the platform’s affordability, AML, pro- prietary scoring and risk-based pricing features. The integration partnership means that lenders can leverage a tried and tested technical solution that also dramatically reduces the implementation lead times. Commenting on the news, Michael Fairhurst from BrightOffice said: “We’ve been looking to partner with a market leading automated underwriting product for over a year, and Lending- Metrics’ solution is a perfect fit for us.  It complements other API integrations we have - such as with UK Land Registry - for our clients’ diligence processes.” LendingMetrics anticipates other plat- form providers will follow suit and adopt

ADP as a way of significantly enhanc- ing their loan management solutions by delivering fully comprehensive and sophisticated decisioning functionality to their customers via a unique custom- er user interface. Over the last 18 months, we have won 5 awards for ADP and our Open Banking solution OBV. This unique combina- tion allows lenders to orchestrate and leverage the data available from all of the major credit reference agencies, to manage their decisioning and collec- tions strategy. It also fully supports Open Banking data which allows lenders to decision over fully categorised bank statement data, delivering income and expenditure intel- ligence like no other.

+44 (0) 2394 211010 | www.lendingmetrics.com

Metrics Monthly | 07

Omni Capital Retail Finance choose Auto Decision Platform Case study

The challenge Independently owned Point of Sale Finance Specialists, Omni Capital Retail Finance Ltd, wanted to take a leap forward with their automated decision- ing in addition to finding a solutionwhich could integrate into their sophisticated credit approval system: OmniPort. The approach Omni decided to complete the project in phases, initially implementing their deci- sion engine exclusively with one bureau. This facilitated a faster ADP launch with a view to revisiting the multi-bureau model following the successful imple- mentation of phase one. Following the initial sales discussions and contract, the LendingMetrics ADP implementa- tion team took the lead, headed by a client dedicated Project Manager. For continuity, Omni were also allocated the same LendingMetrics person that assisted them during the sales process as their Account Manager. The client Since 2009, Omni have worked with retailers nationwide to allow customers to spread the cost of their purchases. With their fresh and simple approach to point-of- sale finance, they are one of the UK’s leading providers of consum- er credit. Omni has developed a credit score system that delivers high acceptance rates when com- pared to high street banks and mainstream financial institutions. The success of this model has produced a significant increase in turnover for many of their retailers.

After setting up the first project call, the Project Managers developed a detailed Project Plan to ensure everyone was aware of their responsibilities and deliv- ery dates for the project to remain on time. Additionally, regular calls took place with lead developers on both sides so that the ADP project ran smoothly. LendingMetrics also provided a con- sultancy service to help document the current decision engine, to allow ADP to be delivered with the engine fully con- figured. Training was then provided for their own engine.

Following the delivery of ADP, Omni was then able to integrate it into their sophis- ticated credit approval system: OmniP- ort, enabling their customers to pur- chase immediately at point of sale. The system is paperless and credit appli- cations can be made online, in-store or via mail-order. With Omni’s state-of- the-art technology, their model provides retailers with the ability to offer finance in-store or online with credit decisions provided within seconds. The system is easy to use and provides the custom- er with the ability to buy immediately using a paperless e-signature process.

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August 2019 | UK Edition

The result Following LendingMetrics training, Omni have successfully migrated to ADP with minimal business disruption and are now enjoying the benefits of real time credit risk decisioning, includ- ing operating the interface to update their rules and scorecards in real time. The combination of highly automated decisions and long industry experience delivered a scaleable solution. Omni and LendingMetrics are both looking forward to working together on phase 2 of the project to continue to develop Omni’s product offering and utilise ADP to its full potential by implementing a multibureau approach.

We were excited that this ADP appointment took us into yet another sphere of lending within the retail and banking sector, it was great working with Omni on this project and we look forward to a long partnership. - Neil Williams, Managing Director

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Metrics Monthly | 09

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Learn more about Credit and Systems Let our industry experts in Credit Risk and Fintech come to you and spend the day sharing their knowledge of credit risk insights and technology. Click the button below to book your free workshop now!

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Featuring: Our award-winning Auto Decision Platform

10 | Metrics Monthly

August 2019 | UK Edition

Time is money

Find out how our award-winning ADP could save you both

In a world where time is money, we want to help you save both. Our revolutionary Auto Decision Platform (ADP) assesses your applicants in real-time, 24 hours a day and

delivers consistent and accurate lending decisions in milli- seconds. Watch our video below to find out more:

Frequently Asked Questions Who is ADP integrated with? All of the major credit bureaus including Equifax, Experian and Illion/Proviso. We are also integrated with Open Banking, Machine Learning, SME – Business data and various other fraud and ID solutions. So you can easily switch bureau or go “multi-bureau” without any fuss. How will ADP save my business money? • More lending with fewer new staff • Better credit decisions = better loan book performance • Trade 24/7 = convert more customers

How will ADP improve my compliance and credit risk processes? By removing human subjectivity and error from those criti- cal aspects of the decision making process and instead making consistent decisions based upon data and evidence, your clients will be consistently checked and verified exactly in accordance with your policies. This makes your systems more robust and enables you to assess performance on a known benchmark rather than unquantifiable “underwriter intuition”. Can I see if for myself? Of course! We can’t wait to show you a web demo or even in person should you prefer. Please get in touch via our enquiry form here or call us during office hours on +44 (0) 2394 211010.

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Metrics Monthly | 11

Tap and go loans?

Open Banking opens up a new era of ultra-fast and simple loan decisioning, says Andrew Tierney

We are all used to going into a store and using our mobile ‘phone to pay for purchases. ‘Tap and go’ has revolutionised our shopping experience. No more fid- dling around with card readers and PIN numbers, or worse still dollars and cents, when all you have to do is wave your ‘phone. Transactions now take seconds instead of minutes. Who would have thought a few years back that by 2019 you’d be able to leave all your cash and your cards at home and go shopping with just your mobile phone? Answer is, not many. Well, we have the same situation today with taking out a loan. In what could be as little as five years, I believe the loan acquiring process will change just as dramatically.

We’ll be in a position to ‘tap and go’ a loan application. Applying for finance these days is still pretty much an analogue experience. Chances are you’ll have to wade your way through pages of application doc- uments and due diligence disclosures online, or in paper, before you get a pro- visional okay from a lender. You’ll then have to wait longer while they check if you are bona fide, in analogue time. Although lenders try, unfortunately it is most definitely not a user-friendly experience and, is as far away from a consumer’s normal purchasing expe- rience as you can get. As a result, too many prospects drop out of the process midway because it is too time consuming. Contrast this with what will happen not too far into the future. You want a loan and all you have to do is pass

your driving license number and date of birth to a lender and they will do the rest. No more time spent on lengthy applications. You may even only have to present your face to your phone, or snap a QR code and it will be done. How so? Well, Open Banking makes this likely because once your ID is verified and you have given your permission for data sharing, the lender can access all your current account transaction history in real time, run it through its algorithms and in milliseconds make ultra-accurate decisions about whether or not to give you that loan. OB is taking us from a reactive era where the emphasis is on past negative credit history (or the search for one) and time-consuming processes, to a proac- tive environment where the lender gets a complete picture of an individual and is able to make super-accurate instant

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August 2019 | UK Edition

decisions. These are based on an appli- cant’s real financial status, rather than an estimate cobbled together from an analogue application. Apart from it being instant (and telling whether the borrower can really afford the loan - a game changer in itself) OB will deliver a range of other benefits. One of the most obvious is that lending decisions will cease to be a largely binary approve/decline business. When you have near-perfect knowledge of someone’s finances, you can engage in a more nuanced approach. Risk-based pricing, a feature of many other sectors, is achievable. Loan amounts and terms can be tailormade for an individual’s circumstances. Lenders will know if a prospect can’t repay £10,000 in three years, but can over five years; and then offer them a different deal to the one they applied for. Notorious areas of miscalculation such as an applicants’ discretionary spend- ing and loan serviceability (that have plagued decision-making in the past) and contribute to loan default rates, cease to be problematic. When an applicant’s data is analysed through categorisation tools, lenders are able to identify and quantify all areas of spending. Heavy use of ATMs, unplanned overdrafts and gambling site spending, for instance, will all be noted and enable an immeasurably more robust lending decision to be made. It

such as multiple applications are auto- matically noted. The US is already further down this track than we are and there you can already get an initial okay for a loan purely on the basis of your social secu- rity number and date of birth. No need for even a telephone call when you can get all you need direct from the applicant’s account (once they have approved your access to it). There are not really any forms to fill in. How many years away ‘tap and go’ is for us, is difficult to tell. But my bet is there will be lenders established with this technology by 2024 in the UK and Australia. And those that haven’t invested in having this capability, will have an exhausting game of catch-up ahead of them.

will pave the way for a braver form of lending: analogue would say ‘decline’, or ‘referral’, but digital, with a 3D picture, can say ‘yes’. This new level of nuance is so much more helpful to the borrower. The data will tell the lender when loan payments are best afforded during the month (because the consumer often does not know), so that a repayment schedule can assist cashflow. And when someone’s finances are going awry during the course of a loan term, this will be red-flagged and pre-emptive calls triggered to nip an issue in the bud. A large termination payment appears in someone’s current account and the bank knows a catch-up call is in order. The beauty of this new era is that as time passes the data deepens and the analysis improves. After a couple of years, the data available to lenders will enable them to understand the con- sumer’s financial situation way better than the consumer does them selves. Anticipating buyer needs will be possi- ble, creating the opportunity for proac- tive selling. And this selling will obvious- ly not be of products that the consumer does not benefit from. These will be products that will advantage the con- sumer. Mis-selling should be a thing of the past. Fraud is reduced because all data goes through central hubs, so anomalies,

Andrew Tierney is a credit risk professional based in Queensland. Andrew.tierney@balanceriskmanagement.com.au

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