Non-Bank Roundtable: How are non-bank business lenders innovating?

Focus on product

Lumi Finance

The big innovation for us in recent times is addressing that ‘M’ part of the SME landscape – those bigger and stronger and longer-established businesses. There is an awful lot of demand there that the banks still aren’t adequately addressing. We have an ultra-low fee product (with potentially an establishment fee of as little as 40 bps) that has rate potentially as low (or lower!) than some of the established big four lenders. Increasingly, we’re going to find a lot of small businesses take on products like this. We’ve long since reached the tipping point where more of our clients are using lines of credit rather than the traditional term loan. I think that kind of speaks to the fact that people like to have funds at their fingertips on an ongoing basis. They don’t want to have to constantly go through the rigmarole of applying over and over again.

Intelligent quoting

Prospa

We’ve been scaling [the technology] we launched a couple of months ago called Prospa IQ, which is intelligent quoting.

Prospa IQ gives the brokers the opportunity to assess the client’s business, analyses bank statements, and provides them with an outcome when it comes down to servicing amount and price. All this happens without a credit check and in real time.

We believe that this is the transition from moving away from a product guide or a pricing matrix. I call it the industrial age moving into the digital era.

We strongly believe that business owners and brokers in particular should have the opportunity to be one click away from doing a full assessment, in real time, for their business clients.

Enhanced experience

Banjo Loans

Technology is a big focus for us this year.

We’ve probably been a bit more relationship-driven over the last few years. We want to start to sharpen our technology in a few different areas, in automation, and just smooth out the bit of the process flow. Every time we work on innovations, we’re working on how we can make it better and make it smoother, not only for the client, but for the broker as well. We’ve done a lot of workshops with brokers over the last six to 12 months, just to find out where they want to play [and] what’s important to them. And so we’re working on a lot of that, bringing that through.

We’re [also] going to continue pushing into those larger loan sizes with some slightly different, innovative products that we’re going to bring out in the coming months.

Operational efficiency

Dynamoney

We want to make sure the volume flows through the system, so we’re making a lot of technological amendments in our credit processes, even though it’s quite efficient at the moment. [But] there’s a lot that can be done with a lot less manhandling around.

It’s an operational experience for us at the moment to innovate and make everything a lot sharper for our clients and our brokers to support the volume. The harder we work, the better we get at what we do [and] the more volume will flow through and that’s really the innovation we’re trying to establish going forward.

Improved verification

ScotPac

AI (artificial intelligence) is the buzzword everywhere. If you’ve got a big debtor finance business, there’s a lot of opportunity for innovation there. We’ve found some really great opportunities to employ AI, particularly around the validation and verification of debtors.

If you think of somebody that might have a business with 1,000 debtors and you’re trying to bona fide or establish that they’re all real debtors, that could take days. But it actually takes us six seconds now with our AI tool, which from a broker and a client’s point of view, closes that time to funding. So that’s been a wonderful innovation.

Broker value-adds

Moneytech

We’re trying to find ways to make that broker experience faster and then provide value to the broker outside of just the deal itself.

For example, for about two years now, Moneytech has been allowing brokers to do soft credit checks. It doesn’t actually hit the client’s file on using our portal. And this is without actually any obligation to submit the transaction to Moneytech.

Just in the last 12 months, volume for that particular use has gone up just shy of 300 per cent. Brokers see value in that. This gives us a conversation point.

In that way, we’re providing value to these brokers outside of just writing the deal for their customer.

Speed to yes with a human element

Bizcap

I don’t think there’s a lender in Australia that can turn around the size of facility at the speed that we can do it – [a] same day, multimillion-dollar facility. But while we are implementing tech to allow us to speed that up even further, we’re not removing the human element.

We’ve got an office space in Melbourne that seats about 130 and we’ve just taken office space on a level above us, in a shared office space for another like 20 or 30 because we’ve actually outgrown the space. We have an office here in Sydney, where we’ve got 10 or 15 people.

The business is growing. We are implementing AI and technology to assist with the process, but we’re not removing the human element.