Metrics Monthly | October 2019 | UK Edition

Brought to you by LendingMetrics


Metrics M onthly

UK EDITION October 2019

In this issue DON’T THOMAS COOK IT

The effect customer experience can have on a business in light of the Thomas Cook collapse

In this issue Welcome Page 03

Lending summit Page 04

In the news Page 06

Don’t Thomas Cook it Page 08

Case study Page 12

The ADP Dashboard Page 14

ADP and Open Banking Page 15

Is the price right? Page 16

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It’s October, and just in time for Halloween, this issue’s headline piece might give you goosebumps. Our main article, ‘Don’t Thomas Cook it’ , focuses on the effect that customer experience can have on a business, and considers how this might have had an impact in the recent horror story that was the Thomas Cook collapse. It also provides an opportunity to share our recent customer service results, along with why they are so important to us. One of the big news stories of this month is the eventuality of Brexit. For some businesses this is a scary pros- pect, but we’re not spooked. We’re a secure UK based company with UK based clients, and our only overseas territory is Australia, meaning Brexit will have little to no effect on our business.

Also in the news this month is Natwest’s recent trial of biometric credit cards, as well as the question: “will machines replace people in the finance indus- try?”, which we discuss in our article on page 07. Our thinkpiece, ‘Is the price right?’ by Australian-based credit risk profession- al Andrew Tierney discusses how Open Banking is changing data acquisition down under, and considers how the credit bureaux could benefit from the changes. We’re also pleased to announce our attendance at the 2019 Lending Summit by Credit Strategy. With four chances to win at the Lending Awards, we’re hoping another award will be on the cards in November. As always, if you enjoy reading this issue of Metrics Monthly, you can sub- scribe to it via our website here.


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Lending summit

Our attendees Meet the Sales Team members who will be representing LendingMetrics at the Lending Summit conference

Claire Januszczak Partnership Manager

Luke Gould Business Development Manager

Catch up with us at the 2019 Lending Summit hosted by Credit Strategy

Hamish MacCormick Business Development Manager

LendingMetrics are proud to announce their attendance at the 2019 Lending Summit, hosted by Credit Strategy. Our Business Development Team will be hosting an exhibition stand at the event, which will be a great opportuni- ty to meet other industry profession- als and gain valuable insight into the recent developments in the finance and lending sphere. The conference, sponsored by Experi- an, is the only conference in the UK that unites commercial finance, alternative lending and mortgage lending, giving

a broad overview of all aspects of the credit cycle. The Summit will be held on the 12 th of November, at the Hilton London Bank- side, and is followed by the Credit Strat- egy Lending Awards, at which Lending- Metrics have been nominated for four awards, including Best Technology Partner. If you’re planning to attend the confer- ence, make sure you stop by our exhi- bition to have a chat with our indus- try experts about our award-winning products.

Steve Beard Business Development Manager

Above: Images from last year’s Lending Summit, hosted by Credit Strategy

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LendingMetrics is a finalist for awards in four categories at the Credit Strat- egy Lending Awards, sponsored by Experian. The Lending Awards will follow on from the Lending Summit and promises an evening of entertainment, including dinner and a celebrity host. The awards provide an opportunity to celebrate and recognise excellence in the industry. The four categories that LendingMet- rics has been shortlisted for are as follows: • Best Credit Information Provider • Best Technology Partner • Gamechanger • Innovation Award It’s been an exciting year for Lending- Metrics so far, with award wins such as ‘Innovation of the Year’ at the Consum- er Credit Awards in July and ‘Best Credit Risk Solution’ at the Credit and Collec- tions Technology Awards last month. We’re up against some big names in the industry including our very own partners, who we wish the best of luck. With four chances to win, we’re hoping another award will be on the cards in November!

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In the news Natwest become first UK bank to launch biometric credit cards

Following a successful trial of biometric debit cards, Natwest became the first UK bank to launch biometric credit cards this month, which allows contactless payments using a fingerprint for verification.

Feeling confident that your information is protected is paramount. We, along with our partners, are building biometric cards that recognize an individual rather than a password or PIN. Biometrics are more secure, more trusted and better suited to a world that requires more frequent authentication. - Bob Reany

The biometric cards can be used for transactions of up to £100, due to the heightened security level, which is an increase of the current limit of £30. The cards entered into circulation on the 7 th of October as part of a trial with 150 customers. Director of Innovation at Natwest Geor- gina Bulkeley describes the new cards as “the biggest development in card technology in recent years”, which isn’t deniable.

What’s particularly impressive about the advancement is that the cards can be used the same way as existing con- tactless cards, as there are no hardware changes needed to payment terminals. NatWest is working closely with Mas- tercard and Gemalto, a digital security company, to bring the service to more UK customers. The new cards allow customers to feel confident that their information is pro- tected, says Executive Vice President for identity solutions Bob Reany.

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Will robots take over the finance industry? One of the big talking points in the finance industry this month is around automation and the question: “will machines replace people in the finance industry?”

But this doesn’t mean that people will be outright replaced by AI. According to currency conversion company Oanda, “AI is not expected to be able to take over the jobs of finance professionals in which a complex myriad of roles must be carried out. Rather, it is likely that it will help such professionals perform better, with richer data-driven takea- ways, more efficient processes, and automation of certain tasks.” This could result in management seeing a greater gain in employment power. Looking back at the past changes in the industry, the financial crisis and increased enforcement from financial crime regulators - such as the FCA - saw an increase in finance personnel across the world. Now, as we return to business as usual, resources are begin- ning to be optimised. One of the key ways that firms can do this is by using new technology to automate their pro- cesses. By automating stages in the lending process, such as underwriting, businesses are seeing huge savings as well as less errors and faster turn- around times.

We at LendingMetrics know that manual underwriting has a limited shelf-life and will eventually become a practice followed by only the very low volume lenders. Those looking to grow will need auto- mation to orchestrate as well as make sense of all the new, valuable and pre- dictive data being offered by CCR and Open Banking. What’s more, automa- tion cuts costs for businesses with fewer underwriting staff, lower credit search bills, more compliant lending and a better performing loan book. With the future of lending lying in auto- mated credit decisioning, our Auto Decision Platform (ADP) has proven to be the way forward for many lenders. Whilst the question of to what extent will robots replace people in the finance industry is still being heavily debated, the undeniable benefits of automation are clear: manual underwriting will soon become a thing of the past, as we move towards a technology-driven future.

In an interview with LinkedIn, James Athey from Aberdeen Standard Invest- ments states that one of two things will happen in the future: either, machines will replace people in certain jobs, or they will work alongside people to assist them, and we are already seeing a huge increase in the latter. In a recent article, the International Compliance Association argues that although automation may affect jobs at the more manual level, people will con- tinue to be needed, however the types of jobs that they do will change. Machines, more specifically artificial intelligence, are seen to be becom- ing more readily used in the finance industry, particularly regarding regula- tion. Repetitive positions in finance are being replaced with algorithms, thus lowering overhead costs and boosting productivity.

The only thing stranger than The Upside Down is manually processing your credit decisions. This Halloween, find out how ADP can automate your decisions by clicking the button below!

Auto Decision Platform

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Don’t Thomas Cook it Head of Operations Paul Brown discusses the effect customer experience can have on a business in light of the Thomas Cook collapse

What effect does customer service have on your business? We have taken the decision to share our recent cus- tomer service survey results as well as the reasons why they are so important to us at LendingMetrics. Customer experience is a major factor in everything that we do. This starts from the moment that we engage with people - before they have even made the decision to work with us - and relies on ensuring that our team are trained to the highest level. We do not have a

‘quick-win’ mentality; we want clients to take a journey with us, particularly as we know that changing from another provider or changing from a manual process to automation can be daunting. However, our team have the knowledge to allow them to discuss every step of the journey. Our Partnership Manager, CTO and Operations Team are always on hand to give advice and guidance throughout. Whether it’s with our Business Devel- opment Mangers or our Project and

Support Teams, the focus is always on: “how can we improve?”. We listen and react to feedback to ensure that we provide the best service possible. LendingMetrics’ multi award-winning platforms allow our clients to measure credit risk and ultimately improve their customers’ journey. By moving to automated decisioning, our clients can make quicker and more precise decisions, dramatically reduc- ing decisioning times from days to minutes.

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Why is this so important? Because customer experience affects spending habits: time and ease are some of the biggest selling points for a consumer. You only have to look at the recent collapse of Thomas Cook, one of the biggest names on the High Street. The news of the holiday booking company’s liquidation shocked the country and left thousands facing unemployment. When you think about what they did as a company, would you say that this hap- pened due to poor customer service? Probably not. However, some might say that they didn’t change with the times, keeping overheads high and not com- peting with online sites, which then has a direct effect on customer experience. Consumers are able to hop online and book a flight and hotel a couple of hours before they want to go, as well as shop

around for the best price. By adding speed to the customer journey, a con- sumer can make up their mind quicker. This can be the same for consumers looking to borrow money; they could be in a situation where they need funds as soon as possible and waiting a week is just not an option for them. Waiting up to seven days for a decision can be a very stressful experience and may cause the consumer to look elsewhere: at a platform that will give them the decision instantly. Customer satisfaction is extremely important to all companies. However, is it good enough to just be satisfied? Satisfaction is short term and even a satisfied customer might look some- where else should a better offer come along. At LendingMetrics we do not only want our clients to be satisfied, but

delighted with the service we provide. We want them to go the extra mile and actively promote the service to people they know, and we enable this by going above and beyond. We are not just a supplier of a SaaS platform, we are con- sultants, specialists, thought leaders. We want other organisations to grow with us. The only way to make this pos- sible is by listening to what our clients are saying and using the feedback to make improvements. This transforms customer satisfaction into a great client experience. We dynamically invite feed- back as a way of us asking the question at our core: “how can we improve?”. One of the ways we ask for this feed- back is with our customer experience survey, and we’re not shy about sharing the results. We believe that transparen- cy is key to evolving and ensuring we move forward together.

Thomas Cook ceased trading on 23 rd of September after the company was unable to pay £200m to its creditors

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So how did we do? Our customer experience survey invited clients to give feedback based on a series of questions, on a scale of 1-10. Studies show most people are likely to score a 7, unless you as a provider have either wowed them or they are not happy with the service. With this in mind, we were thrilled to have received scores higher than 7 across the board, as shown below.

The excellent service team of LendingMetrics, their exten- sive industry knowledge and a user friendly product has allowed us to roll-out the first stage of our credit expansion plan within agreed timeframes. ADP is an excellent product and is a large part of our product and systems roadmap for business growth.

- Customer service survey feedback

7.93 8.25 8.18 8.65 8.87






How easy did you find the integration process with LendingMetrics?

How would you rate the communication from LendingMetrics?

How quickly are you responded to when you raise an issue with LendingMetrics?

How would you rate the overall service that you receive from LendingMetrics?

How likely are you to promote the services of LendingMetrics?

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The positive scores and feedback that we have received from the survey allow us to know that we are deliver- ing a great service. Feedback such as: “strong collaboration and agility, plus open to finding solutions. I recommend highly”, shows us that our clients are happy with the service we provide. Nevertheless, we aim to keep improv- ing, and continue to ask for feedback from clients at different stages in their LendingMetrics journey. We consist- ently strive to improve our client’s Auto Decision Platform (ADP) experience by

investing heavily in developing our exist- ing systems. With a 3 year roadmap, there are always more updates and fea- tures on the horizon, ensuring we know our award-winning product will keep improving. All of this is because we know that the better our platforms become, the better consumer journey our clients can provide to their customers. After all, a great customer experience might just be the difference between excel- ling in the market or becoming the next Thomas Cook.

Above: LendingMetrics Head of Operations Paul Brown

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Case study Credit union network My Community Finance uses ADP

My Community Finance gives savers and borrowers access to ethical lenders such as Credit Unions through the Community Finance Network. The network wants to give everyone access to fairly priced and ethical financial products. Products My Community Finance were looking to move away from a hardcoded in-house loan origination system that had very limited decisioning capability, to a system with much greater flexibility and automation capabilities. LendingMet- rics were able to meet this requirement with their award-winning Auto Decision Platform (ADP). When designing the decision engine, My Community Finance’s main aim was to replicate the existing underwriting rules (eligibility, credit, affordability, KYC) into ADP as well as integrating with Experian as a new data source. They were also keen tomake use of some of ADP’s addi-

tional functionality, by passively testing new credit risk strategies to measure the potential effect on business. Approach for delivery The implementation process followed LendingMetrics’ well established project plan, spanning across 4 inde- pendent phases, led by a client dedicat- ed Project Manager. Through weekly scheduled calls, regular updates and a focused project plan, both sides were able to ensure that the project remained focused and on track. LendingMetrics also provided a con- sultancy service to help document the current decision engine, so that the system was delivered with the engine fully configured and ready for use. A member of the LendingMetrics Project teamwas always availablewhenneeded and the technical advice and guidance that My Community Finance received was invaluable in the transition.

LendingMetrics were very responsive with our requests...The speed with which we can change our underwriting Vestigo Partners, a credit risk consultancy firm, supported My Community Finance in the development and implemen- tation of ADP. Vestigo were pleased with the speed with which they can now change their underwriting rules and how LendingMetrics enabled them to easily introduce dual bureau capability.

rules is fantastic. - Richard Pinch, Vestigo Partners

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Result My Community Finance have success- fully launched ADP within budget and on time and are reaping the benefits of a system with the flexibility to make strategical changes quickly, without needing to process a lengthy change request with their IT team. One of the biggest benefits that My Community Finance feel they have gained from the project is their much improved understanding of their appli- cation flow and the greater degree of

transparency that they now have thanks to the data returned from ADP. The ability to make swift changes and integrate with new data sources seamlessly means that My Communi- ty Finance are confident that they can remain nimble in an ever-changing industry. My Community Finance and Lending- Metrics are both looking forward to working together on the next phase of the project, implementing Lending-

Metrics’ award-winning Open Banking product, OpenBankVision. Neil Williams, Managing Director of LendingMetrics, said: “Working with My Community Finance was a great example of a well run and swiftly executed project by all involved. Pro-active and regular dialogue very much helped keep momentum, and solve challenges before they became an issue.”

Consumer credit case studies Our large amount of recent consumer credit case studies (in the UK and Aus- tralia) include Omni Credit (Owned by JC Flowers), Evolution Money, Loans- 2Go, Fair For You, and Aus Loans one of Australia’s largest motor and per- sonal loan originators.

For Aus Loans in particular we have delivered a novel solution which allows Aus Loans to mirror the lending crite- ria of the 40-or-so banks and lenders on their panel, allowing them to auto- matically match a client to a specific lender (based on credit data) and then further select available deals based on the best rate available.

This is not simply pre-approval filter- ing, but a decision based fully upon the full lending criteria of those 40 or so lenders. The editing control of the engine logic is entirely within the control of the lender and they have no such dependency on LendingMetrics. We believe the solution to this model to be truly unique.

See more of our case studies

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The ADP Dashboard

This month marked World Statistics Day, so we’re looking at the stats and analysis available to you through the ADP Dash- board, a key feature of our Auto Decision Platform.

ADP is a next generation cloud based solution, capable of delivering comprehensive automated decisions through direct interaction with your customers.

So what makes the ADP dashboard so special?

Real-time analysis Manage your decision engines in real-time, and with live retro analysis Instant testing Modify credit policy quickly, test instantly and deploy as soon as required

Live scenarios Champion/challenge scenarios and retro analysis in real-time, in a live environment Effective user interface Build, edit and maintain multiple decision engines without the need for IT personnel

Want to find out how you can utilise the ADP Dashboard to automate your decisioning?

Book a free ADP demo

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ADP and Open Banking The credit industry is buzzing with possibilities of Open Banking Open Banking opens up a world of possibilities and our Auto Decision Platform (ADP) is fully integrated with it. Find out how ADP can help you leverage the potential of Open Banking in our video below.

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 it 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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Andrew Tierney says that credit bureaux can thrive if they re-think their pricing and embrace Open Banking Is the price right?

The Australian credit checking regime is facing a wake-up call. Open Banking and the availability of rel- atively cheap real-time statement data is set to test the viability of the business model that credit bureaux have used in Australia for some time. Unlike in the US and UK, in Austral- ia, individual credit searches have always been pricey. While you may get away with paying as little as 50 cents

in the US, or under a pound in the UK, the cost of a credit report here is typi- cally between 3 and 6 dollars. For the full cost of acquisition, this can rise to 10-15 dollars. This situation has prevailed for many years, but is unlikely to continue unchanged for much longer. The advent of Open Banking means that finance providers could soon get inexpensive statement data from a

consumer’s bank account at the touch of a button. For the first time, real- time access to a borrower’s account is possible. Unlike a credit score, which by its very nature is ‘historic’, Open Banking data is far less likely to present a false picture of someone’s financial status. It gives an up-to-the-minute insight into what is happening in a person’s life, right now. A very handy tool that is more fit-for- purpose when wanting to check issues

OpenBankVision OpenBankVision by LendingMet- rics is an award-winning bank statement data platform, based on decades of combined experience in the field. Our OBV platform provides fully categorised bank statement data absolutely free, with no limits and no contractual minimums. No catch, no commitment, just “FREE FOREVER” To find out how you can access up to 90 days of bank statement data for absolutely free, email us at:

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October 2019 | UK Edition

such as affordability and product suitability. With this, a finance provider can get a deep transactional history from the cli- ent’s bank, perform modelling around it, and then determine whether a loan product can be afforded. And, because bank statements direct from the bank do not lie, fraud risks are reduced dramatically. Furthermore, this OB data is relatively cheap. Depending on the technology provider used, its marginal cost could be close to zero. So, it is little wonder that many are doing the maths and working out that they can reduce, or even remove, credit search costs by opting for OB data. Not having a credit file may mean some cases are turned down, but, given the comparatively high per-case cost of credit reports, overall savings are likely to be much greater. And with everyone having to set aside ever larger amounts of money for com- pliance as a consequence of the Royal Commission on Banking, any area of saving is likely to be leapt upon by CEOs looking to boost return on investment. So the landscape is changing fast for the big Australian credit bureaux, and they are going to have to adapt to this changing landscape. The signs are already there that the status quo is being challenged, with

some of the bureaux having to cut costs and manage margins. The big Australian credit bureaux must be asking themselves, how much longer will their existing client base habitually continue to accept the exist- ing terms of business. My answer to this question is, not long - if bureaux continue as they are. However, there is a way through this challenging landscape, if they are willing to adapt swiftly. It involves rethinking pricing and widening their customer appeal. They should accept that the model that sees customers paying up to 15 dollars for the cost of acquisition is almost over. The availability of real-time trans- action data basically means that the perceived value of credit reports has been diminished. The finance providers still paying for them at the current price are not going to be doing this forever. Those that take advantage of the cost reductions offered by OB, may come to be seen as having a competitive advantage. The key for bureaux is to hold on to the existing customer base by offer- ing credit files for considerably less than they have been. Costs should be brought down to be more in line with US and UK models. Bureaux data is still valuable - even in an age of Open Banking. A credit report,

in addition to all the transaction infor- mation obtained via OB, provides a much more comprehensive picture of a prospect. So why not price it right so that it can be used alongside OB? If this happens, it is more likely to be used more routinely, and in greater volume than it is at the moment. Although the income per search would come down, overall volume sales are likely to rise. The US and UK markets show that credit bureaux can thrive, despite the banking revolution. These markets have demonstrated that, by tapping established Open Banking and deci- sioning tech providers, who are ready and waiting to engage, and by chang- ing their pricing, bureaux can continue to flourish.

Andrew Tierney is a credit risk professional based in Queensland.

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