What does ‘personal’ mean in the specialist banking market?
Simon Furnell, chief operating officer at Masthaven | 07:27 Wednesday 30th January 2019 | 9
Personalisation lies at the heart of the specialist banking market, which is exactly what makes the sector so special.
The word ‘personal’ is frequently used in the financial services industry, but few are able to deliver on the promise and ‘individual pricing’, ‘bespoke loans’ or ‘tailored mortgages’ aren’t always what you might think. In reality, though, how many of the high street banks can ensure their products are truly personal when the service is homogenous, and credit is assessed by machines?
The need to scale and standardise in high street lenders has meant that for many years a large segment of customers that don’t fit into the desired shape have been left underserved, centralised, moved branch or forced down a channel not of their choice. Realistically, personal is something that most banks aspire to, but in the specialist world, it is something we have to make a reality in order to stand out.
That’s not to say high street banks don’t serve their purpose. There are some truly fantastic products currently available and for those customers that fit under the ‘mainstream’ umbrella, these products could be a great option. However, if we explore what personal actually means, we begin to see the many forms it already takes within the specialist banking market.
Personalised products and service have come and gone, and the pace of change has left some customers breathless and yearning for the good old days. Whether it be flexible approaches to lending criteria, one-on-one customer service, new technology, new channels, omnichannel service and Open Banking, a lot has changed, and the pace won’t let up. Using new technology while being in tune with the changing needs and habits of customers is essential for those of us who want to stay ahead and thrive.
From a lending perspective, flexible assessment models are a must. The working world is changing rapidly, with people increasingly opting for different employment patterns. And whether it be the self-employed, freelancers or contractors, their lending needs deserve to be met just as much as those who work more traditional nine-to-five jobs. Likewise, the credit impaired or older borrower segments all have customers with individual stories and lending needs. And that’s what is key to recognise — these are real-life people, maybe even our parents, siblings, friends or children.
If we look at this from a savings perspective, innovation is key. For example, providing flexible choices for savings bonds with the ability for each customer to set their own, adaptable term. Why shouldn’t you be able to set your own savings term?
Open Banking will, and is already presenting, a host of opportunities in both the lending and savings space. Once APIs become more readily available, increased collaboration and access to more and improved data will mean that we can really go the extra mile to provide customers with digital ecosystems built organically around their needs.
Ultimately, being personal means looking at each individual case and assessing the borrower’s overall circumstances, including any relevant contributing factors. It’s about using common sense, judgement and the individual needs of borrowers. It’s what the specialist banking industry was made to do, and we will continue to improve this offering as we kick-start the year ahead.
That’s not to say we don’t have work to do. Masthaven’s recent Broker Beat survey found that over a third (35%) of specialist lending intermediaries believe that lending criteria is the biggest barrier to achieving an increase in demand for specialist products. This was followed by regulatory requirements (27%) and lack of product innovation (18%).
So, there are challenges and opportunities in equal measure as the specialist banking sector seeks to tackle these pain points so that collectively we can provide the most optimal, truly personal, customer experiences for as many borrowers and savers as possible.
Temenos partners with ClearBank for cloud payments
Banking software company Temenos has formed a strategic relationship with ClearBank to provide banks with a faster route to market for real-time cloud payments...
Unity Trust Bank registers 34% rise in profits
Unity Trust Bank increased profits by 34% in 2019...
Believe the hype – why explainable AI is a trend that’s here to stay
Technology has become a ubiquitous part of our day-to-day lives...
Piloting tech updates: ‘The bigger the bank, the harder it is to get anything done’
In the latest Medianett filmed roundtable session, we discussed how important technology is in the banking space, and what impact the industry expects it to have on its businesses in the future...
What banks need to know about cloud security
One of the most common perceived concerns when adopting the cloud is the issue of security...
OakNorth sees 95% increase in pre-tax profits
OakNorth Bank has announced a 95% rise in pre-tax profits in 2019 to £65.9m, up from the £33.9m recorded in 2018...
Redwood Bank signs up to Women in Finance Charter
Redwood Bank has announced that it has signed up to the Women in Finance (WIF) Charter...
Masthaven launches digital Women in Leadership programme
Masthaven Bank has launched a new Women in Leadership digital development programme for female senior leaders...
Protecting against supply chain disruption and the domino effect
Disappointingly, many UK SME business owners don’t understand their supply chains...
Confused about which Isa to choose? Hopefully this mini-guide will help…
We are now firmly in Isa season, so you’re likely to read multiple articles about the most competitive Isa products in the market and how best to make the most of your Isa allowance before the end of the tax year...
Garden shed entrepreneurs contribute £16.6bn to the UK economy
Entrepreneurs who run their businesses from garden sheds contribute £16.6bn annually to the UK economy, according to a recent study...