In the Spotlight with Tony Marshall, Equifinance

We spoke to Tony Marshall, managing director at Equifinance, about how brokers can help clients with credit profile issues and where the secured sector could learn from fintech.

Related topics:  In The Spotlight
Rozi Jones
1st February 2019
Tony Marshall Equifinance
"As a lender we place a great deal of emphasis on the outcome post funding, rather than the history. "

FR: What are Equifinance’s main aims or focuses in 2019? Do you have any exciting news or plans you can tell us about?

Equifinance experienced considerable growth year during 2018, this was as a result of the introduction of new product ranges that were fit for purpose, fulfilled gaps in the market whilst being supported by best in field service levels and flexible funding partners.

We are looking to build on the solid foundations created by seeking to expand our market share by means of delivering solutions that consumers want across a broader market. We are also investing heavily in technology in order to ensure that we can distribute efficiently and expediently.

FR: Do you see criteria continuing to adapt for self-employed and contract workers?

Absolutely yes, I feel that we as an industry attempt to apply employed PAYE underwriting criteria to self-employed applicants. They are not the same, in fact even within the self-employed sector there are major differences between roles. For example; a self-employed building contractor is not the same as a self-employed IT consultant, neither of which necessarily bear any resemblance to a controlling director of a service based business or a dentist, for example.

They all have different product needs, receive income in different ways, with differing cashflows along with differing taxation rules and regulation. To offer viable solutions to this market a lender needs to take into consideration all of these dynamics, which effects not only income assessment but also product design as well.

This is an area we will be concentrating on during 2019 in order to create, develop and deliver products and criteria to suit the self-employed, as I believe this is the sector that may face an element of exclusion from mainstream financial solutions.

FR: What advice would you give to advisers who have clients with credit profile issues?

Find out the reason why and be completely honest with the lender.

We see many cases where credit issues arise from events that are completely outside of the applicants’ control which can and do have a devastating financial effect that can last for many years.

That said it’s not always an event that caused the problem, sometimes the applicant made a mistake, overspent, were too busy with their lives to manage their finances properly but have learnt their lesson. We have all made mistakes and its better that we as a lender know this and as such make a judgement on the customers propensity to do so again.

As a lender we place a great deal of emphasis on the outcome post funding, rather than the history. The history is still very important to gain an understanding of how the applicant ended up where they are but we are always concerned about a positive outcome and in recovering the clients’ situation or assisting it.

FR: How do you see technology continuing to evolve in the second charge market and what are some of the positive and negative impacts you see of emerging tech?

Although not emerging tech, sourcing systems will continue to be very influential over distribution and product development. Advisors and brokers need this important technology to evaluate ever dynamic solutions along with providing support and evidence for the advice given.

New tech on the other hand is enabling speedier transactions and is also testing old school wisdom, such as requiring physical signatures, copies of evidence and so on. In some ways I support this and for some time I have questioned why it takes six to eight weeks for a second charge loan to be processed and yet an applicant could obtain an unsecured loan for the same amount within 24 hours. I think this is an area that the secured sector could learn from fintech and adapt.

New technology is also enabling institutions some competitive advantage regarding delivery of product, where criteria is not overtly advertised or marketed but kept within a black box and offered based on electronic decision making. This is fine where the applicants’ circumstances are standard in nature. However, the downside of this is where the applicant does not fall into tightly defined criteria.

This is where lenders such as Equifinance come into our own, we manually underwrite all loans and as such consider qualitative information in our decision making as well as quantitative data. This enables us to consider solutions for those applicants where they are slightly out of kilter with automated underwriting tools and take a view where the customers circumstances are complex in nature.

FR: If you could see one headline about the financial services industry in 2019, what would it be?

'The uncertainty regarding Brexit is over'.

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