Richard Jones, chairman of the Finance & Leasing Association (FLA), spoke before the FLA’s members at the association’s 25th anniversary dinner.
As the FLA’s 17th Chairman, I’m pleased to say that many of the other sixteen, and our one former Director General, are seated among you.
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They have each played an important role in steering the FLA on a steady course through some very interesting times.
For those of you who don’t know, the Finance & Leasing Association came into being in 1992 when the Equipment Leasing Association and the Finance Houses Association joined forces.
Ron Young, who sadly passed away earlier this year, became FLA Chairman in May of that year, directly after the Joint Chairmanship of Brian Hassell and Bob Wyatt during the actual merger period.
In his first foreword to the FLA’s first Annual Review, he noted that 1992 would be ‘best forgotten’ in terms of trading, but went on to say ‘….one of our strengths is the expertise we can bring to bear on technical issues, and the willingness of many member companies to allow their senior staff to serve on Association committees’.
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By GlobalDataHe also believed that ‘….the authorities have always recognised that our submissions are the result of practitioner experience and acknowledge them accordingly’.
I think it’s a proud reflection that Ron’s remarks are just as true today as they were 25 years ago.
The FLA is a powerhouse of technical knowledge.
When the Financial Conduct Authority took regulatory responsibility for our markets in 2014, their new regime of rules and regulations was at least made fit for purpose thanks to colleagues around these tables.
You explained to them what would work, warned them what wouldn’t, and helped reshape the biggest category of all – those rules that would have caused damage to our markets if they’d been introduced in their original form.
Back in 1992, FLA members provided £22.5bn of asset, consumer and motor finance.
Today that figure is £118bn. Imagine the impact of misguided rules on a market that size. Imagine the repercussions elsewhere.
FLA members sit right at the heart of the UK economy, and in 2016 provided almost a third of the UK’s total investment in machinery, equipment and purchased software. Without you, firms would have been starved of the funding they needed to grow and prosper. What we collectively do touches almost every home, community, sector and industry in the UK.
In the consumer finance market, point-of-sale credit is supporting everything from white good purchases to car purchases, and a new generation of customers in the second charge mortgage market is financing home improvements or putting their children on the property ladder by providing deposits for their first homes.
The reason that the regulators and government listens to us is our credibility.
In 1993, the FLA launched a new Code of Practice for its merged membership. As Ron said at the time, it ‘…marked a major step in the development of this new Association.’
Fast-forward a few years, and the single Code has been developed into two different Codes – one for consumer finance and one for business finance. In fact, in the last 18 months, they have both been updated to reflect the latest regulations, and are still fully supported by members.
Codes build and maintain high standards of professionalism in the industry, and they only survive in mature markets where the interests of each signatory are aligned with the next.
Reputationally, all members of the FLA are bound together, and adherence to our Codes ensures that we set and uphold a threshold of acceptable conduct for our industry that contributes directly to our credibility as both businesses and business people.
Members’ professional development has also been served well by the FLA. The old Asset Finance Diploma has been totally revamped for a new era, with a curriculum that is totally aligned with industry needs. The same is true of the Motor Finance Apprenticeship – devised by members for members.
As for the FLA’s other training courses, not only are they popular with participants, but they’re a prerequisite for any employer who wants his staff to operate safely and confidently in a demanding and evolving regulatory environment.
Considering that courses like the one on the FCA’s Senior Managers regime are riding high in the 2017 training charts, I wonder what will be on offer in 2042.
Imagine how we might be transacting 25 years from now. Or even 5 years? Will our buzz words become dominated by Blockchain, or AI, or machine learning?
Will the extent and pace of technological innovation be even greater than it is today as our regulatory regime struggles to catch up with the latest phones or tablets or tech implants? Or might we have somehow developed a truly future-proof regime where the intent of the regulation is no longer anchored and limited by the format of the transaction.
The last two years are a small window in the passage of the last 25 years, however I believe they are an indicator of what we will need to deal with in the next 25 years. More change, greater and faster innovation through technology, continued shifts in customer behaviour and less uncertainty as to what the future holds, and no doubt a less benign economic environment.
Whatever the future holds, I have no doubt that the FLA will be there working passionately and bringing its expertise to the fore, to ensure that our markets are healthy, appropriately regulated and able to work in the best interests of its customers. A strong industry needs a strong voice. I have no doubt the FLA will continue to have that, and as Chairman I look forward to playing my small part in that long journey.
