FR: Congratulations on 25 years of trading this year! Looking back, what do you see as pancredit’s most significant achievements?
Thank you very much! A lot has happened in 25 years. Launching pancredit’s intelligent loan administration and decision making software tools and generating nearly £100m of revenues have to be near the top of our list of achievements, but beyond that, the thing I am most proud of is providing stable and ongoing career opportunities for top people in Yorkshire. We currently employ 40 people at our Leeds-based offices, many of whom have been with the company for well over ten years. We expect our headcount to rise over the next twelve months as we expand our technical and business support teams further.
FR: What major changes have you seen the credit and lending sector go through over the course of your career and how have they impacted pancredit?
25 years is a long time in any industry. Some of the biggest changes have happened in recent years. The financial crisis has had a massive impact on credit and lending. High street lenders have been hit hard with banks in particular losing a lot of ground, not least because of the payment protection insurance mis-selling scandal. Consumer confidence is at a very low ebb. The recession impacted pancredit too, with a lot of our customers axing their budgets. Fortunately we were able to turn this to our advantage. The crisis has given us the opportunity to modernise and diversify our offering, focusing on how intelligent decision making technology can benefit lenders, intermediaries and consumers in a financially unstable market. Putting ‘responsible lending’ at the heart of our service offering has enabled us to work with organisations such as gocompare.com. We like to think our solutions are helping to re-build the lending market’s reputation.
FR: Loan applications are expected to rise this year, as consumer spending continues to be squeezed by the economic conditions. How can high-street lenders defend their ground against competition from the increasing number of new players entering the market, like peer-to-peer lenders and payday loan companies?
As I mentioned, a big challenge facing high-street lenders is how to restore consumer confidence in their brands and services. As the loan market is filling with new players offering rapid alternatives to the traditional loans, high-street lenders need to demonstrate to customers that they have learned from their mistakes and are changing their lending behaviour.
I believe that demonstrating a commitment to ‘responsible lending’ in a time of financial instability is the key to scoring points with customers and winning back their hearts. Ensuring that customers are only able to apply and be accepted for loans that they can afford is a key component of this commitment. Intelligent decision engine technologies, like pancredit’s MADE, are designed specifically to help lenders evaluate a customer’s financial circumstances automatically at the point of initial enquiry, according to the lender’s qualifying criteria. It then steers applicants toward the financial products that they can afford and are likely to be granted, and away from those that are unsuited to their borrowing profile.
When interest rates finally do increase (which they have to, at some point) lenders will have a greater need to automate their affordability checks, in line with the inevitable rise in loan applications. Lenders looking to continue to lend responsibly as the market picks up should be taking steps today to investigate how technology can weave the responsible lending ethos into their day to day operations, particularly when the technologies on offer can also help them to cut costs and free up internal resources at the same time.
FR: How can lenders ensure they are providing the best possible customer experience in such a tough market?
Technology advancements mean that today’s consumers expect a quick and instant service across all aspects of daily life. Market demands for quick cash loans have created a market for instant decisions on short term loan applications. This process is changing consumer expectations; customers now expect instant, or at least very rapid, decisions to be made. Traditional lenders need to adjust accordingly in order to keep pace with the market. Re-evaluating their loan application technology is therefore crucial.
FR: pancredit’s customers include price comparison websites, like gocompare.com. What role do you envisage price comparison sites will play in the future of the online loan market?
Consumers are increasingly looking to the internet, in particular price comparison sites for quickfire quotes and applications. As more comparison sites implement intelligent decision making technologies into their loan search functions, they are becoming far more than just a ‘shop window’ for loans. Using these technologies, intermediaries are able to filter the products they display according to the profile of their visitors and thus improve the quality of the applications they generate for lenders together with the online experience they deliver, saving consumers hours of frustration.
2013 will be a watershed moment for these organisations. Leading price comparison sites are already trialling and rolling out intelligent search functions. Within eighteen months they will be the norm. This means that the role of price comparison sites in the online loan market will be elevated - their services will offer both applicant and lender much greater value than they do at present. pancredit is playing a central role in making this happen.
FR: What do you predict for the secured lending market in the next 12 months?
There has been 58% growth in the secured lending market in the last 12 months (to April 2013) and the prediction is that we will continue to see this rise. To support this, there will be a number of new lenders entering the market, looking to gain a share of the growing demand. Consumers who are in very competitive mortgage deals and need to raise funds for a large purchase may find that a secured personal loan is more suitable than to re-mortgage into a new product. We are also likely to see existing lenders introducing enhanced terms to add to their current products such as higher LTVs on rate plans, larger advances on loans and lower rates being offered. All of these changes are geared towards attracting new customers and securing a larger market share. The overall mood in the secured lending market is very positive at present.
FR: What are pancredit’s plans for development in the next 12 months?
In 2013 we plan to make further enhancements to our core SaaS offering for the personal loans market. We have successfully worked with new entrants in recent months and our customers have seen the benefits of having a fixed price from the outset allowing them to manage cash flow effectively while at the same time getting to market quickly. We want to refine our SaaS offering to further reduce development time upfront which will continue to improve our ability to support new businesses across a wide range of unsecured personal loan products. There is a great demand for new lending and we are keen to be the company of choice for new start lenders.
For our Core pancredit product, we are continuously improving the services that we offer. Development takes place in conjunction with our current customers’ needs as they need to respond quickly and compliantly to changing consumer requirements.
Peter founded pancredit in 1988 with the specific aim of developing a fully integrated lending and leasing system to meet the demand from medium to large financial institutions. He has extensive experience of designing, developing and marketing finance software for high profile blue chip customers. He was Managing Director for 10 years, overseeing the company's spectacular growth. In June 1998 Peter decided to take a step back from the day-to-day running of the company but remained a non-executive director. This allowed him to concentrate on one of his other passions, music, and more specifically running an independent record label and music publisher.
By 2001, Peter was itching to resume a more hands-on role and took up the challenge of Technical Director and in October 2003 he resumed his position as Managing Director.
