myi: What needs to be done to improve the state of the secured loan market?
We have seen new entrants to the market in recent years, which is great, but this won't necessarily achieve growth, since most lenders are looking for the same sort of customer. What we need to start seeing are more near-prime plans- at the moment the opportunities for those with impaired credit rating are limited and higher rates are charged.
A key change we also need to see is slightly higher LTVs. Many providers are still understandably cautious of this approach, but there are ways to achieve it without necessarily increasing risk. Risk-scoring systems could help in this regard. For the market to really grow, lenders do need to open up a little more.
myi: Do you think there will be many major changes this year?
I think we are getting closer to gaining a better definition of future regulation and this will really help all players in each part of the industry to gain a better view of what's to come. It's very likely that we will see a few more new lenders enter the market -albeit very cautiously- but most of the changes this year will be behind the scenes.
Lenders coming into the market will be getting their houses in order in preparation for entering the market in 2013. That is when things should start to get more interesting.
myi: There are lots of reports about 'mortgage prisoners' circulating at the moment do you think this will see an increase in the number of secured loan applications?
The concept of the 'Mortgage Prisoner' is nothing new -they've effectively existed since the start of 2009, but what has changed recently has been the reporting of the problem.
We've been talking about this problem with our IFA and Mortgage Broker Introducers for a couple of years now and the message has been well and truly heard in that sector, but I think that the press coverage of the problem will increase consumer awareness of the alternatives and should lead to an increase in interest in secured loans.
myi: There are lots of secured loan brokerages out there but what makes Fluent Money different?
We pride ourselves on making sure we look after everyone in the chain -our customers, our lenders and our partners, whereas other brokers might just focus on one and not the others. We had a lot of support from lenders and partners when we started out, and the risk certainly paid off, but we have to continue to value those relationships.
By providing a personal, friendly, customer service, we've built up a good reputation, so now we have to maintain it. We have a very lean and efficient way of working and are committed to good business practices - sticking to these principles enabled us to grow.
myi: Is the direct-to-consumer model dead?
We have chosen to go through third parties, be they partners or introducing brokers and this has worked well for us. Direct-to-consumer is not yet dead, it still works for plenty of other people, but there are tough challenges to making it work well.
myi: Is the secured loan market as tech-savvy as it should be?
The market has moved with the times more than people give it credit for - 99% of our enquiries are received electronically for example. More and more people are shopping online, working online and generally conducting many parts of their everyday lives online, and this is equally true for managing finances.
Our typical customer profile is someone that ticks all of those boxes, so they would naturally search for and complete a loan application online. Our whole application process is digital and we are looking at new ways to enhance this experience even further. We haven't however ignored the importance of personal contact.
At the end of the day, we're dealing with people's finances, so they want to know that there is a real person somewhere that they can speak to.
We make sure that all customers have a dedicated case manager for them to speak to if and when they have questions. It's all about striking the right balance.
myi: What has been Fluent Money's biggest success to date?
I would have to say growing the business to the extent we have during the Credit Crunch and during what most people consider to be the worst recession in living memory. As other brokers were looking to shrink, we were pushing hard for growth.
We succeeded, and it's something we're really proud of. We don't believe any other broker within the UK has experienced our growth or increase in market share on the secured loans side of things.
