Metrics Monthly Q2 | 21

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Q2 /21 30 June 2021

Adapting to ever-changing times The new normal Tackle it with technology

David Wylie considers how a return of high inflation and increased interest rates could impact the lending sector Is increased inflation on the way?



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Editor's letter Welcome to your second special quarterly edition of Metrics Monthly!

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This issue, we have your quarterly dose of industry news, interesting insights and opinion pieces on the latest hot-topics. In our headline piece , CEO David Wylie considers how increased interest rates could impact the lending sector, and asks the question: is increased infla - tion on the way? Our 'In the news ' section this issue shares the findings that there's a rise in young borrowers using data sharing like Open Banking, and consider how this effects the lending sector. What's more, the decline of cash fuelled by the pandemic could result in vulnerable members of society missing out, and, with the stamp duty holiday coming to an end, there's potentially some good news for First Time Buyers. Despite the extension to current restric- tions, the Government's roadmap to normality is in motion, so we asked you whether you think face-to-face meetings will go back to how they

were before and the results painted an interesting picture of the future of work. Find out the response, and what this could mean for the working world, in 'Adapting to ever-changing circum- stances' on page 06. In LendingMetrics' news, we're introducing some new faces to the company, have been shortlisted for two awards by FStech and are also counting on your vote for our third Consumer Credit Award. Find out more on page 08. Our featured customer story looks at how specialist lender United Trust Bank are utilising ADP for their auto- mated mortgage decisioning, leading the way in offering its introducers and customers the most streamlined tech- nology-led approvals processes. If you haven’t already subscribed to Metrics Monthly, make sure you don’t miss our new quarterly editions by subscribing here !

Our online Auto Decision Platform (ADP) saves on time, money and errors, driving more profits to your bottom line. Monitor transactions, prevent application fraud and ensure your company adheres to new regulatory requirements. With Lendingmetrics’ ADP, you can facilitate your company’s growth and enhance it’s lending security.

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In this issue

03 Editor's letter 04 In this issue 06 Is increased inflation on the way? David Wylie considers how a return of high inflation and increased interest rates could impact the lending sector

12 LendingMetrics updates

We welcome some new faces to LendingMetrics and are counting on your votes for our third Consu,er Credit Award!

14 The new normal


The pandemic is going to result in major changes to borrower profiles and only the nimblest lenders will be able to thrive


08 In the news

16 New banking ecosystem

A handful of relevant news stories that may have slipped under the radar this quarter

LendingMetrics is one of ten leading FinTechs to be involved in next generation banking ecosystemTysl

We asked you whether you think face-to-face meetings will go back to how they were before 10 Adapting to ever-changing times

17 It's your time

Whatever your circumstances, it's now your time to make up for those missed opportunities

11 Software fragmentation

18 Customer stories


The fragmentation of software eco-systems can allow use of best in class modules, but which solutions work best?

United Trust Bank utilise ADP for their automated mortgage decisioning

20 Tackle it with technology


Automated platforms need to be used more extensively by the wealth management sector if it is to fully comply with the growing regulation

22 What is ADP?

Find out how our Auto Decision Platform can rock your lending world in this video

23 New tool for estate agents

Find out how our Auto Decision Platform can rock your lending world in this video




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Is increased inflation on the way?

David Wylie considers how a return of high inflation and increased interest rates could impact the lending sector

When you add to this mix the fact that pent-up consumer demand is going to be released over the coming months following its suppression by the pan- demic, you could be forgiven for think- ing that we are in-line for a steep rise in the next published Retail Price Index. There are many who expect prices to rise faster and further than the Bank of England’s prediction of broadly 2% this year and the same in 2022. I am with those economists who see it being more like at least 4% by the second half of next year. If inflation does rise steeply at the end of this year and into next, how is it going to play out in our own sector? As night follows day, if prices do rise by more than 3%, interest rates and the cost of borrowing are likely to rise as the BOE tries to restrict price growth. The only likely alternative will be a tighter fiscal picture as the government increases taxes (to pay for the events of the pandemic) and reigns in spend- ing. Such actions would also dampen demand.

This will mark a major turning point for the industry. For the past 20-or-so years, borrow- ers have largely come to expect low and falling mortgage and loan interest costs. Overnight, they may have to get used to the opposite. As the cost of borrowing rises across all types of applicant, lenders will be looking to recalibrate their exposure and scale back lending at the margins of their client distribution. This may lead to ‘pulling up the ladder’ on riskier lending, such as to the self-employed. This is going to mean a re-adjustment for all and, for some, this may be painful. Spending decisions might have to be postponed, given that relatively inex- pensive finance will be suddenly more expensive. Loan applications that were expected to sail through on affordability will be turned down, and agreed advanc- es on mortgages may come up short as LTV requirements change. The scale of the difficulties these changes may cause is, of course, going to be proportionate to the actual level of inflation that the economy experienc - es and the real interest rates that then apply.

All of this is exactly what happened during every previous inflationary period, so no big surprises; history does in fact repeat itself. Thankfully, however, for the first time there will be a big difference this time round. We now have vastly improved technology at our disposal in this sector to help cushion adjustment to a new reality. The ‘Big Data Revolution’ that we have all been living through means lenders can take a granular view of their activity, where every individual applicant has an individual decision, tailored to their spe- cific circumstances. This allows for a far more intelligent calibration of risk by lenders, enabling them to tune-in more accurately to their customers and there- fore their profit-and-loss, so that they can maximise prudent lending and min- imise missed payments and bad loans. The quiet back-office revolution that has been taking place under the radar since the previous inflationary burst should give us all grounds to be con- fident that we can weather the storm, should it come. Gen Zs and Millennials can rest assured, most of the industry is now in a much better position to ride the storm than last time.

The days when high inflation rates loomed large on the horizon are long gone. To ‘Gen Zs’ or Millennials it has really never been a concern. Since around 1993 it has ticked along at around the 2%-or-under mark. Its impact on the real value of salaries and savings: minimal. 2011 was the last time price rises surprised anyone, when they briefly nudged over the 4% mark (4.46%). Prior to that, you have to go all the way back to 1992 to get the previous high-water mark (4.23%), after which prices drifted steadily southwards. For those of you with memories that pre-date 1992, I imagine, like me, you will have always felt inflation was there in the background, biding its time, waiting for the next opportune moment to strike. You can scarcely blame us. I can

remember inflation of 7.5% in 1991 under John Major’s Conservative Gov- ernment and can recall being told as a child about the 24% (yes, you read it right - 24%) under Labour and James Callaghan in 1975. During those years, and the years in between, high inflation wasn’t unusual, and with it came higher interest rates. During the Major years, interest rates topped 15%. The consequence was misery for many of those with mortgag- es and a drastic pinch on disposable incomes. I’m sure I was not the only one to have wondered when that container ship got stuck in the Suez Canal at the end of March whether inflation was about due for another run. Was the supply bottle- neck that it caused going to compound the damage to an already fragile trading environment and mark the turning point?

Looking at the data, I think a lot of drivers are indeed in place for a resur- gence. We may well come to look back on 2021 as the beginning of a new infla - tionary period. "We may well come to look back on 2021 as the beginning of a new infla - tionary period." On the supply side, commodity prices are briskly picking up. The World Bank commodity index bottomed out in 2020 at 91.7 in quarter two, but in the first quarter of 2021 it hit 139.9. Drilling down further: oil prices are up a third compared to last year (but still low his- torically); house prices, boosted by the Stamp Duty holiday, show no signs of cooling; car prices are up, as are home energy costs and food prices.

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In the news Rise in young borrowers using data sharing like Open Banking Credit Kudos has released

Decline of cash fuelled by the pandemic

Stamp duty holiday comes to an end The stamp duty holiday introduced by the Chancellor of the Exchequer was welcomed with open arms when the pandemic hit, and successfully kept the property market afloat over the past year and a half. The tax break led to a rise in house prices - supposedly of around £20,000 on average - and prices have further soared in the past couple of months as many rushed to make the most of the holiday. The Rightmove property index, for example, showed a huge asking price increase of 1.8% from April to May this year. Now, with the tax break coming to an end, the growth is expected to slow, which is good news for First Time Buyers who will still benefit from no stamp duty on properties under £300k. The increased amount of low LTV mort- gages is also a plus, as 95% mortgages make a return to the market en mass, supported by the Government's mort- gage guarantee scheme. The scheme was another initiative brought in by Rishi Sunak to encourage mortgage lenders to re-launch their low-deposit mortgages, and has been successful in rebuilding providers' confidence in the industry, with the assurance that a large portion of any net losses will be covered by the Government.

As a result of the pandemic, many bor- rowers have a less than perfect credit file, but due to circumstances out of their control. Lenders without a clear enough picture of their credit file, then, are simply rejecting applications for people who could in fact be good loan

candidates. By using Open Banking, lenders can paint a better affordability profile for these people, seeing exactly what they earn and spend, thus making them more likely to lend to those who can afford to repay even if they've had a rocky year.

interesting survey results that show people aged under 35 are 21% more likely to securely share their bank transaction data if it will help them be accepted for credit, compared to April 2020. The research showed that 18% of adults aged 18 to 34 have been turned down for credit during the pandemic, with over half of these believing it was due to a lack of information on their credit report. As a result, many of these people are now more open to using data sharing, such as Open Banking, if it increases their likelihood of being accepted for a loan.

or those without internet access, will be most affected, especially as the number of free-to-use ATMs contin- ues to decline. In an effort to safeguard access to cash, Chancellor Rishi Sunak prom- ised to instigate new laws to protect access to cash in his Spring 2020 budget, but these new figures suggest things haven't been going to plan. In this most recent quarter, the Govern- ment took this one step further and made an amendment to the Financial Services Bill to allow consumers to request cash back without having to make a purchase in stores. Whether this is enough to prevent the collapse of the cash system in the UK is unknown, as digital payment methods continue to offer many advantages, and initiatives such as Open Banking create a clearer digital landscape of a person's finances.

Recent figures from Worldpay show that cash payments fell from 27% of in-store transactions in 2019 to just 13% last year. The processing company predicted usage to continue to drop over the next three years, with an estimated 7% of purchases expected to be made by cash in 2024. Consumers were already moving towards cashless payments prior to the pandemic, but this was vastly accelerated when many vendors encouraged buyers to use contact- less in an effort to reduce the risk of spreading Covid-19 through cash and chip & pin. Whilst many people have embraced the change, the shift away from cash could result in those people that rely on the payment method being left in the lurch. Vulnerable members of society,

Lockdown extension leads to changes in the financial sector This month brought the news that the current lockdown measures in the UK will continue as they are until at least July 19 th , rather than being east com- pletely on June 21 st as expected. Whilst the news was frustrating for many, it was understandable, as the Delta variant continues to pose a threat, and a large number of young people are not yet vaccinated. no business rates, but from next month this will change to a 67% discount (with a £2m cap) until the end of the financial year. Without an adjustment to match the extended restrictions, and a delayed boom in business, hospitality and enter- tainment companies may face tough decisions in the coming months.

again face hardships. It's not all doom and gloom however; one of the biggest concerns of an extension of the restrictions was for weddings and funerals, but the Govern- ment have made an exception for these events, with capacity limits removed. The previous limits of 30 people will be removed on 21 st June, meaning that these events can go ahead with unlim- ited numbers, provided that social dis- tancing measures remain in place. This means that any spending - or borrow- ing - tied to having a larger wedding will still go ahead, as couples who had their weddings postponed during the pan- demic can finally tie the knot. Whilst this is good news for newly- weds-to-be, the hospitality and enter- tainment industry faces another blow as their hopes for maxed out venues get shattered. Currently these firms can pay

All of this will likely lead to an increase in borrowing, both as pent-up spend- ing - on weddings and holidays - is unleashed, and as the hospitality indus- try faces difficulty, with more jobs on the line. What will come next, then, depends on how quickly these sectors are able to bounce-back when lockdown restric- tion eventually do ease completely, and whether this predicted increased spend- ing will reboot the economy enough to prevent a recession.

But what does this extension mean for the economy and the financial sector? Despite the extension, the end of financial support measures will not be adjusted accordingly, with Furlough support currently available to subsidise wages at 80%, and moving to 70% in July, with a 10% employer contribution needed. The full scheme is likely to end completely in September, meaning job uncertainty will be back on the agenda and people in restricted industries once

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Software fragmentation

Adapting to ever-changing times

Recently Chris Warburton interviewed LendingMetrics CEO David Wylie about the evolution of lending decisioning technology and how new capability means increased flexibility for lenders at a reduced cost. In the interview, the pair discuss the fragmentation of software eco-sys-

tems, to allow use of best in class modules. The benefits of this are that clients get access to some of the best function- ality in the market, with less compro- mise, but this does add complexity and multiple vendors, all of which needs to be managed.

So, which solutions work best? To see Mr Wylie's response to this question, watch the clip below or click the button to view the full interview.

Watch full interview

The events of the last year have transformed the face of the working world and have meant we've all had to adapt quickly to changing circumstances. With the Government's roadmap to normality in motion, we asked you whether you think face-to-face meetings will go back to how they were before, and the results painted an interesting picture of the future of work.

A large number of people (60%) said they think that meetings will only 'par- tially' return to how they once were, and this was no surprise considering the percentage of the population who have adapted to a "hybrid working" model as a result of the pandemic. With only 16% of respondents voting that they think face-to-face meetings will completely go back to how they were before the pandemic, it's clear that people believe the new model of working is here to stay. The working environment now appears very differ- ently to how it was pre-pandemic, and we've seen circumstances change rapidly, with organisations having to adapt quickly or risk falling behind the crowd. When the first national lockdown was instigated, many of us were thrown head first into working from home, with little to no time to prepare. The spike in MS Teams users at the start of the pan- demic is a classic example of how com- panies had to adapt quickly to remote working, with daily active users more than doubling from 32 million to 75

million in a couple of weeks, and now peaking at 145 million. LendingMetrics was fortunate to have had well-prepared contingency plans in place, meaning the team could com- mence working remotely easily and efficiently prior to the first national lock - down. The company was able to contin- ue to deliver high standards to our cus- tomers, with minimal disruption. However, without those contingency plans in place, and an ability to adapt rapidly to the changing circumstanc- es, there could have been significant roadblocks which many other compa- nies saw when commencing remote working. Businesses need to be able to change quickly, as and when needed, and the same is true when it comes to the lending industry. "The working environ- ment now appears very differently to how it was pre-pandemic"

Lenders need to be able to make rapid changes to their credit policies, to match the constantly changing circum- stances and adjust effectively to new regulations. As we saw with the recent Buy Now Pay Later controversy, regula- tory changes can happen almost over- night, and providers should be able to adjust to these as instantaneously as companies did to remote working. One way that operators can make instant changes to their policies is with Lend- ingMetrics' Auto Decision Platform (ADP) , which allows lenders to create and manipulate decisioning logic on demand and in real-time to address credit risk, KYC, fraud and affordability requirements. With the future of the working land- scape unclear, and more changes to be expected, one thing that is certain is that the ability to be flexible and adap - tive in response to changes is growing evermore important. To find out more about how ADP can allow you and your business to make real-time changes and prepare for future adjustments, book a free demo today.

Above: watch a clip from David Wylie's interview with Chris Warburton

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LendingMetrics updates

New faces at LendingMetrics Intelligent decisioning technology provider LendingMetrics has made a range of new appointments to ensure high delivery standards as its customer base expands.

LendingMetrics is pleased to have been shortlisted for two different awards for the FStech Awards 2021

The company behind the mul- ti-award-winning automated under- writing Auto Decision Platform (ADP) has recently taken on a number of high profile clients, including Morses Club, and is expecting more in the coming months. To serve this growing client base, a number of new appointments have been made, demonstrating the compa- ny’s impressive growth in the past year despite the difficult circumstances. The new team members include: Edu- kondalu Bokka as Developer, Callum

McNeice as Account Manager; Serena Rothwell as Finance Assistant; Simon Tymms as Business Analyst; Ian Withall as Support Engineer; Emma Worley as Sales Operations Coordinator. Director of LendingMetrics, David Wylie, said: ‘Lenders have used lockdown to reassess their back offices and a large minority are consequently moving into the digital era with ADP. These new team members are going to make sure we maintain the high standards we have always strived for as our customer base grows’.

We're counting on your votes for a Consumer Credit Award! LendingMetrics is proud

industry, and find the best products and most trusted brands. The 12-week voting process involves over a hundred different Fintech companies, and the 2020 awards saw more than 19,000 votes cast. Last year, LendingMetrics were thrilled to have been voted as 'Technology Partner of the Year', and this year we have been nominated for the same award again, so winning for a second year would mean a great deal. Previ-

ously, we also saw success at the 2019 awards, where we were awarded 'Inno- vation of the Year'. Voting takes less than 2 minutes and all voters are entered into a prize draw to win a cash prize of £1000. To vote, simply click on the button below and help us score a hat-trick with a third win in a row!

to announce we have been nominated for this year's Consumer Credit Awards, but we need your votes to win! For the third year in a row, Lending- Metrics has been shortlisted for a Consumer Credit Award, and, as before, the awards are wholly voted for instead of judged. The awards aims to put customers at the heart of the

The pandemic has hit events hard. The past year saw numerous awards cere- monies make the move from in-person to virtual, exchanging the charm of a gala to sofa viewing. Whilst the allure of hiding behind a screen piqued our inter- est, we soon realised that digital events do not have the appeal of a full-scale evening event, with live entertainment, networking opportunities and great hospitality. We’re pleased, then, to see the beginning of the return of in-person events with the FStech Awards 2021. FStech is a leading provider of tech- nology and business news, aimed at a variety of financial institutions, that facilitates discussions from digitisa- tion and Open Banking to data compli- ance and regulation. Their 2021 awards

event will be held in London on 8th Sep- tember and will be the 21st annual cere- mony of its kind, celebrating excellence and innovation within the UK and EMEA financial services sector. The awards will be decided by a judging panel fea- turing a range of industry experts, who specialise in fields such as digital pay - ments and financial advice. Last year's winners include Revolut for Anti-Fraud Solution of the Year, Temenos for Tech- nology Provider of the Year, and AXA for Cloud Computing Innovation of the Year. LendingMetrics is proud to have been shortlisted for two awards: 'Risk Man- agement Software of the Year' and ' Best Use of IT in Consumer Finance'. The company's flagship product, Auto

Decision Platform (ADP) is an indus- try-leading risk management platform that delivers comprehensive, automat- ed decisions through direct interaction with customers, and allows lenders to decision in a compliant manner. Lend- ingMetrics has previously received multiple awards including ‘Best Credit Risk Solution’ at the Credit & Collections Technology Awards four years in a row, and ‘Best Technology Partner’ at the Car Finance Awards in 2020. With the country beginning to get back to normal, we’re looking forward to the return of physical events and hope the FStech Awards will be the start of many. View the full awards shortlist here .

Vote for us now!

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The new normal

Related articles Adapting to ever changing times We asked you whether you think face- to-face meetings will go back to how they were before, and the results painted an interesting picture of the future of work.

David Wylie says the pandemic is going to result in major changes to borrower profiles and that only the nimblest lenders will be able to thrive. The pandemic has changed how we all do things. Quite how dramatically will only become fully apparent as the weeks and months after the lifting of the lockdown tick by. We’ve already had more than an inkling of what the changes to the status quo will likely be. We can all say without much fear of contradiction that digital payment will increasingly be used rather than cash, digital platforms are replac- ing bricks and mortar, and consumers will look for instant gratification rather than expectation management.

Spending the best part of a year in lockdown has convinced many more of us of the benefits of using technol - ogy to obtain what we want, when we want it. Even late arrivals to the digital scene are now benefiting from the shift in behaviour. These are the obvious big-headline changes that we all know about, but there are many more that don’t show up quite so prominently on the radar. Changes that may be every bit as significant. I can already see a major one in lending. The pandemic is amplifying a particu- lar type of finance applicant; one that is going to account for a large and growing tranche of applications going forward. What could be termed the

‘newly non-prime’. Covid-19 unleashed a wrecking ball onto the pre-pandemic underwriting scene. Unlike previous downturns, indi- viduals from all walks of life have been impacted. Even those with unblemished credit scores will have had alerts placed on their credit files in recent months through furlough, mortgage holidays or temporary unemployment. A large number with up-to-now ‘prime’ credit profiles will no longer present as well to lenders. In terms of the typical underwriting scorecard, the ratio of prime to non- prime will tilt towards what in earlier times would have been regarded as the sub-prime end of the spectrum. While this shift has been happening to

borrowers, lenders have been busy adjusting their lending exposures in the light of the damage done to the economy. Credit card companies, for example, have unilaterally reduced credit limits with little or no customer consultation. Most notably, Barclay- card has told 100,000 of its custom- ers that their limits are to be cut by as much as 90%. Lenders have imposed these restric- tions following a period of record con- sumer paying down of debt. Accord- ing to Bank of England figures, some £15.6bn was settled between last March and October alone. This double whammy - of the newly non-prime and reduced finance avail - ability - is going to lead to unpleas- ant surprises when consumers apply again for finance in the weeks and months ahead. They might have spent the past year reducing debt, but now that they need credit again, their plastic spending limit has been slashed and for some their credit profile has deteriorated. Their need for finance is still there though. With the lockdown over and being back at the workplace, they will want to spend on their deferred home improvements, holidays, cars, etc. This mismatch is a challenge that presents a huge opportunity for those lenders who are able and willing to respond creatively. Those in a position to make more sophisticated underwriting decisions, to take account of a multitude of variables, and come up with a more bespoke decision for each applicant are going to find a large market to tap. Not only will they be lending more to existing customers, but there will also be a sizeable number of people who will be looking for a new credit card provider, new unsecured lender, or re-mortgage bank.

Thankfully, using technology and automated underwriting platforms, there are lenders who can rise to this challenge. These lenders use platforms like LendingMetrics’ Auto Decision Plat- form (ADP) to give themselves a pre- viously unheard of level of granularity. In addition, by utilising Open Banking and multiple third-party bureaus they can drill down in real-time into each application to come up with an optimal lending solution for that par- ticular person. Never has it been more important to have such tools. Not only do they enable lenders to quickly and com- prehensively adapt to the immediate post-pandemic world, they also allow them to flex as the economy moves forward and changes as it undoubt- edly will. Structural changes will be picked up and dialled into lending algorithms, so that the bigger picture can always be seen and used to guide each decision. If I were a lender at this pivotal time, I would ask myself one key question: is my credit decisioning capable of adapting to this changed environ- ment? If I wasn’t sure of the answer, I wouldn’t be counting on a straightfor- ward bounce back to pre-pandemic business levels any time soon.

Take me there

Tackle it with technology David Wylie says that automated plat- forms need to be used more extensive- ly by the wealth management sector if it is to fully comply with the growing volume of regulation.

Read now

What is ADP?

Find out how ADP can rock your lending world in our video.

Find out more

Above: LendingMetrics Commercial Director and co-founder David Wylie

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New banking ecosystem

LendingMetrics is one of ten leading FinTechs to be involved in next generation banking ecosystem Tysl

LendingMetrics are proud to be one of ten of the UK's leading FinTechs involved in the innovative Tysl banking ecosystem, a collaboration of solu- tions including software, automation, AI, data management and more. In an impressive demonstration of the utilisation of technology, PwC brought together the group of industry leading FinTechs to showcase the future of next generation banking. The API-en- abled approach means different soft- ware applications are able to easily communicate with each other, allowing businesses to collaborate effective- ly and improve performance across a range of key measures. The Tysl ecosystem took three years to build, and allows customers to open bank accounts, obtain special- ised finance, move house and digital - ly sign documents. Users can use it with complex customer journeys such

as KYC (Know Your Customer) and credit decisioning, across a number of sectors including mortgages, savings and corporate lending. These digital solutions are available via a modern, low cost and customer-focussed digital lending platform, which allows firms to transform their customer facing opera- tions, enhancing products and services to meet the expectations of a modern world. 'Banking is changing, people expect more and require personalised digital interactions. Based on the needs and expectations of tomorrow’s cus- tomers, we have developed our Tysl platform', said James Morgan, Lead Partner on Tysl. PwC strived to find the best in class companies to work with for each element of the journey, and the Tysl platform can be integrated via any of the collaborators. 'This is helping our clients reach new customers, upsell and grow topline revenue by delivering

enhanced capabilities whilst signifi - cantly reducing the costs of servicing the client from onboarding to in life servicing', said James Morgan. Along- side LendingMetrics, these collabora- tors include Credit Kudos , a challeng- er reference agency that can provide a comprehensive view of a borrower's affordability and creditworthiness, and Codat , a financial integrations business that connects the tools and services of operations and finance service provid - ers of SMEs. LendingMetrics' multi-award-winning Auto Decision Platform (ADP) forms an integral part of the Tysl ecosystem by providing a unique decision engine environment. ADP can be applied across unlimited brands, products or lending journeys under one licence and provides a comprehensive (no-code) editor, allowing non-technical staff to make real time changes to credit risk logic.

The events of the past 15 months have been tough on us all, but many indus- tries have weathered the storm and the end of restrictions is in sight.

Now, it's your time to go on that much needed summer break; it's your time to hug your loved ones; it's your time to finance that new car you've had your eye on.

Whatever your circumstances, it's now your time to make up for those missed opportunities as we begin to return to normality and look to the future ahead.

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Customer stories United Trust Bank utilise ADP for their automated mortgage decisioning

The result ADP allows United Trust Bank to analyse and process data from multi- ple sources, including third party, CRA and Open Banking data. It enables brokers to receive lightning-fast auto- mated mortgage decisions (supported by strict contractual SLAs) on qualify- ing cases and frees up the underwrit- ing team to focus on applications with more complex circumstances. This has already led to an impressive uplift in the amount of incoming deals facilitated by their brokers. ADP’s innovative Engine Editor permits United Trust Bank to confidently modify their policies, algorithms and risk appe- tite instantly. The bank is also able to use passive engines to test new deci- sion engines against real world applica- tion data without affecting live lending decisions. The enhanced capabilities of ADP allow the bank to instantly inform introducers about application out- comes, affordability assessments and updates to approval conditions. Due to the success of using ADP so far, United Trust Bank intend to roll out further instances and utilise the solu- tion with other divisions, including Buy To Let and Asset Finance, later this year.

Summary United Trust Bank are using ADP to effectively increase lending volume and improve the experience for customers and brokers alike. The bank’s adoption of innovative technology benefits all customers, from the more straightfor- ward applications to those that require underwriter intervention, making it quicker and easier for both customers and brokers to deal with United Trust Bank and improving their work-flow efficiency.

Neil Williams, Chief Technology Officer of LendingMetrics said: “We’ve really enjoyed working with United Trust Bank and are pleased to see ADP being utilised to deliver sophis- ticated mortgage assessments in milli- seconds. We look forward to seeing the partnership develop in the future.”

The partnership with LendingMetrics has allowed us to provide a scalable offering, increase our volume capability and improve both broker and consumer journeys, thus delivering more successful outcomes. Buster Tolfree Commercial Director of Mortgages at United Trust Bank “ ”

About United Trust Bank is a prominent UK specialist mortgage lender providing a range of innovative first and second charge products through its panel of approved introducers. Known by busi- ness partners and customers alike for its dependable reputation for making quick, consistent and common-sense decisions, the bank prides itself on the work of its expert underwriting team. Why LendingMetrics? As a pioneer, United Trust Bank strives to lead the way in offering its introduc- ers and customers the most stream-

lined technology-led approvals process- es along with a range of competitive and imaginative mortgage products. This approach led the bank to an exten- sive tender process and the decision to partner with LendingMetrics to deliver the multi-award-winning solution Auto

improve United Trust Bank’s work-flow efficiency, by facilitating the execution of sophisticated and individual deci- sions in real-time. Following a thorough requirements gathering phase, ADP was tested via the bank’s UAT process, and the LendingMetrics support team were on hand to assist with this phase where required. Due to the complex requirements, the LendingMetrics team facilitated regular calls to ensure the project remained on track and any ques- tions were answered throughout the implementation process. As a result, the solution is now in production and is helping United Trust Bank achieve their ambitions.

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United Trust Bank shared their vision of how they intend to scale their lending operations in the coming months and years, and LendingMetrics’ ADP would be a key partner in this journey. The platform’s primary goal was to

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Tackle it with technology

For those reading this and wondering whether their own regimes would stand up to scrutiny, the good news is that technology is available today to auto- mate the processes required, while at the same time providing an electron- ic audit trail that can be evidenced to regulators. The old maxim that every challenge can be viewed as an opportunity has never been truer. Regulation-driven IT spend shouldn’t be looked at as a necessary evil, but instead seen for what it is: an extremely cost-effective means by which wealth management companies can ensure they are 100 per cent compliant, while at the same time lowering costs and improving service by allowing client-fac- ing staff to focus more on managing

relationships. Technology has been in use for many years in other sectors, such as finance and banking, where it has become a tried and tested compliance solution. Platforms can be obtained off-the-shelf and be up and running within days. LendingMetrics’ ADP (Auto Decision Platform) utilises Open Banking to help interrogate current accounts to deter- mine client suitability, in real-time. It also calls credit bureau and ID / AML data to cross check and establish a KYC threshold, and, because the whole process is automated, a screening can be completed in seconds. Once a client has consented via their GDPR permission, onboarding search- es are run against multiple bureaus in sequence where necessary, with

checks re-routed to second and sub- sequent bureaus should a profile fail at any stage. The ‘waterfall’ handling of checks maximises the chances of suc- cessful screening. Alongside credit bureaus, other third parties are used to ensure compliance in other required areas, such as AML, CTF and ABC. For managers deemed responsible under the SMCR, such technology pro- vides the peace of mind that comes with knowing you have digital systems in place that will stand up to the most challenging regulator scrutiny. Additionally, it has the potential to free-up the 40% of their time that most currently find necessary to allocate to compliance.

Director David Wylie says that automated platforms need to be used more extensively by the wealth management sector if it is to fully comply with the growing volume of regulation. A recent report by fintech company JHC and Compeer looked into com- pliance and the wealth management sector, and came up with some inter- esting findings. The research found that 58% of senior wealth managers were having to spend almost half of their working day on compliance issues. The primary reason for having to allocate this amount of time was concern about record-keeping and being able to evidence everything from new client screening to the nature and content of every client interaction, as well as its impact on product suita-

bility. This concern has been amplified by the extent of regulation and its ever more onerous requirements. Thanks to legislative frameworks such as GDPR, MiFID ll, 5MLD and SMCR, a range of regulations are now at the top of wealth managers’ priorities. Anti-money laundering (AML), combat- ing the financing of terrorism (CTF) and anti-bribery policies are among these, with such controls being essential in promoting integrity in the industry. In addition, source of wealth (SOW) and know your customer (KYC) checks are proving evermore important practices, and becoming a significant drain on managers’ time. It is understandable that, according to the report, many senior managers feel unprepared for this regulatory onslaught, with one in four of their firms still having to handle checks manually,

and the remainder relying on a combi- nation of manpower and technology. "Many senior managers feel unprepared for this regulatory onslaught, with one in four of their firms still having to handle checks manually" You cannot blame them for feeling somewhat daunted. The FCA has made it clear that it wants to see more preci- sion and evidence of due process from the sector. Senior managers know that the potential risks of not having a suf- ficiently rigorous regime in place are now considerable. Slip-ups, if egregious enough, can result in an appearance in court for those deemed responsible under SMCR and a large fine.

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What is ADP? Find out how our Auto Decision Platform can rock your lending world in our video below.

New tool for estate agents

Identity and compliance checks can be carried out in a fraction of a second thanks to the launch of automated technology into the estate agent sector. LendingMetricshasmade itsaward-win- ning Auto Decision Platform available to letting and sales agents so that they can use it to fulfil their customer due diligence (CDD) requirements. The AIP platform is already used extensively in the finance sector, where it delivers near-instant underwriting decisions on prospective borrowers. Estate agents have been required to conduct CDD checks on lettings as well as sales activity following a change to the law in January 2020. In addition to sales, CDD must now be carried out on both the tenant and landlord for higher value rental agreements. However, many agents have adopted CDD on all

their letting agreements to ensure best practice across their business. Estate agents are mandated to have in place systems and procedures that record all CDD activity. LendingMetrics’ Auto Decision Plat- form (ADP) is an effective platform for conducting these CDD checks, and uses both Open Banking and multiple credit bureau data to deliver near-in- stant results. ADP can be utilised for thorough checks including KYC (know your customer), KYB (know your busi- ness), identity verification, AML (anti money laundering), PEP (politically exposed persons) and suspicious activ- ity detection decisions. The technology then ongoingly conducts automated risk monitoring of individuals and busi- ness customers. A recent update to ADP means that on-boarding searches can now be run against multiple bureaus in sequence, with checks re-routed to second and

subsequent bureaus should a profile fail at any stage. This ‘waterfall’ handling of checks and the involvement of multiple agencies maximises the chances of a successful screening. What’s more, all CDD checks run through ADP will generate an electronic audit trail that can be provided to reg- ulatory authorities should they request one, ensuring agents are able to comply to regulations effortlessly. LendingMetrics’ Director David Wylie said: ‘ADP is going to save agents a lot of time and money because it provides an automated and frictionless route through the compliance and regulatory minefield. Estate agents want an accu - rate, automated CDD platform that runs in the background, ensuring full compli- ance without getting in the way.’ If you're in the estate agent business and want to find out how ADP can help with CDD checks, get in touch for a dis- covery call today.

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?

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.

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.

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