Game of Loans: Do fintech firms risk depersonalising the borrowing experience?
We seem to live in an age where we are in so much of a rush that we feel the need to constantly shorten phrases into catchy words.
Brexit, fintech and Brangelina all seem to be the products of the portmanteau addicts among us who are far too busy to have the time to articulate their original elongated versions. At Regentsmead, we have also been guilty of this, with ‘Rmead’ often appearing in handwritten notes around the office. However, this same frantic approach seems to have made its way into our world of lending. Nowadays, everyone needs to know their AML from their DIP, while making sure that we TCF. The constant paraphrasing is great for time savers, but is there a downside to all of this?
The new wave of fintech firms is, of course, a welcome addition to the lending space, particularly given the scope of their innovation and their sincere determination to do things differently. More competition and innovation in our market keeps longstanding players such as Regentsmead on our toes and makes us regularly look at our own procedures to make sure we are keeping up with the times. That being said, there are certain procedures in lending that cannot be replaced by slick technology, and I think that attempting to do so could have serious consequences.
A good example of this occurred recently when a colleague showed me an app he uses to get his dry cleaning done. It’s quick and easy to use and all at the touch of a button – a far cry from my usual experience of walking down the road from Regentsmead HQ with my suits draped over my arm. Halfway through his demonstration I had to stop him. My issue with all of this was that this was far too impersonal. I use the same dry cleaners because they know me. Every time I walk in, I get an overfriendly handshake from everyone in there, followed by a bit of poor banter and slightly awkward chit-chat about any major events that may have occurred on the high street over the last fortnight. Essentially, I use the same dry cleaners because I have built up a relationship with them.
This brings me back to fintech. Regentsmead has recently experienced record levels of repeat clients, which is great for our brokers because it means more proc fees with no extra work involved. We are one of the few lenders that insist on meeting face to face with everyone we lend to, something that isn’t done enough in our industry in my opinion. There isn’t a slick platform out there that can replace a genuine handshake or a well-built relationship. I recently made a site visit to a longstanding client in Hampshire who is always bowled-over that I remember which particular brand of whisky he likes, again something that a nice-looking website interface cannot replace. My concern with fintech is that we run the risk of depersonalising a business that is built on face-to-face relationships. Borrowing money is, after all, a highly personal experience. The lenders that are still here in 10 years’ time won’t necessarily be the best innovators, they are more likely to be the best at building relationships. It will be interesting to see how the fintech firms perform in a bad market as this hasn’t been tested yet. One thing is for sure – I don’t want to hear the word Brexit any more.