As specialist becomes mainstream, it’s time to look at the challenges facing our burgeoning sector, says Richard Deacon, Sales Director at Masthaven Bank.
I recently celebrated 10 years at Masthaven Bank (it was my birthday, too – just saying). As anyone working in our sector will attest, a heck of a lot has happened in the past decade.
And, as a similar number will also agree, a heck of a lot lies in wait over the next decade, too.
On being asked to contribute to this edition of Advantage it came to mind that we’re at the apex of what could be a period of significant change for the specialist finance industry.
On the horizon a vast collection of influencing factors is set to come into play – and is shaping, driving and changing the way we work.
Here are three challenges worth paying attention to right now:
Since the first swathe of challenger banks hit the market in the early noughties, the number of new entrants seems to be getting bigger each year – particularly within the short-term space.
There’s a reason for their prominence. For too long the high street players have offered outmoded products, side-lining plenty of people in the process. Spotting a gap to fill, specialist banks have come onto the scene to support customers who fall slightly out of the remit of the major providers.
Competition is to be welcomed: it means greater consumer choice, better rates, keeps everyone on their toes and the market healthy.
The flipside is stagnation, specialist lenders launching just for the sake of it and a lack of true innovation. The challenge for the specialist is to continue to stand out and offer something real and different.
The rise of the robots?
Read any article about the impact of automation on industry and you’d be forgiven for thinking everything’s about to get a bit Terminator II.
While the scare stories suggest robots will be replace human jobs, the real cause for concern in specialist finance is how technology will influence the customer relationship.
Specialist finance is complex. I regularly bring in bridging loans that are extremely tricky and require the very best of our underwriters to tackle them.
Whilst we are some way from letting a bot underwrite a bridging loan, we are seeing automation start to creep in and replace some customer service functions.
Technology is important and vital. We’ve gone through a period, influenced by tech, that has probably been as significant as the Industrial Revolution; let’s just remember not to wield it willy-nilly.
Specialist banks need to remember that their cases are rarely run-of-the-mill, so let a human, not a bot, take care of them.
Entering the public eye
Throughout this piece I’ve talked about “specialist finance”. But is what we do really ‘specialist’ anymore?
We’re seeing specialist products get mentioned in national newspapers and sub-sets of specialist finance are worth billions of pounds (last year, ASTL members wrote £3 billion in bridging loans).
Awareness of specialist finance is growing, brokers are educating their clients about it more and more, and banks are creating ‘specialist’ products that, when you look under the bonnet, aren’t all that specialist. They’re just built to help people, whatever their situation may be.
The last decade has been enlightening, difficult, fun, challenging, thrilling and much more – here’s to the next.