Athena Chrysanthou reports back from the last Leasing Foundation panel discussion in Central London, which focused on collaboration and how to overcome the cultural barriers that can cause friction in the industry.
In the final of the four events hosted by the Leasing Foundation Innovation Initiative in London, the discussion focused on collaboration, cultural habits and maintaining effective partnerships in the industry.
Go deeper with GlobalData
The event was moderated by Simply Asset Finance chief executive Mike Randall, who opened the discussion by saying: “This is a time for change in our industry, and if we don’t pull together, look at that change and do something about it, then we are all going to pay the price.”
The event’s discussion panel consisted of Katrin Herrling, co-founder and chief executive at Funding Xchange (FXE); Ylva Oertengren, chief operating officer at Simply; Bernie Skivington, director – guarantee and wholesale solutions at the British Business Bank (BBB); and Greg Carter, founder and chief executive at Growth Street.
Strategic Partnerships
Herrling was asked how FXE established suitable strategic partnerships that played a significant role in the company’s distribution.
Herrling said: “A fundamental aspect of our partnering strategy is that we can guarantee the business is always going to be treated fairly and that the business will always have enjoyable financing solutions.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataShe also said transparency over the use of data sources and technology, and ensuring that small businesses get access to all the solutions for which they are eligible is “half of what we do”.
At the BBB, forming partnerships begins with an analysis of the market, according to Skivington. He said: “We start by trying to understand what needs fixing in the market, what opportunities there are, how the market is evolving and what’s coming up in the future.
“When we look at a decision to invest and deploy funds, we consider the management teams, as well as the underwriting and governance. Fundamentally, we want to know that we can work with a delivery partner, that the company is well run and has good strength in governance.”
For Growth Street, Carter said a constant demand from customers is for more speed and certainty in the credit decision.
He said: “We spend a lot of time thinking about how we can unpick the customer journey to access better sources of data in order to make faster and more confident decisions, and how we can make that journey easier for our customers.”
Partnerships serve as an important part of that strategy, according to Carter, as “more and more business customers, like consumers, are starting to take advantage of iterative digital services for their day-to-day financial needs”.
Change in Mindset
Funders traditionally have a tendency to show reluctance towards alternative partnerships, according to Maude, who explained that cultural habits and the sharing of data are key to this resistance.
He said: “When we connect up with Growth Street or one of our other providers, we have got to transfer the customer’s data from Starling Bank to the partner. The cultural worry is that something will go wrong in that transference of data and it will get lost.”
With transference of data being a potential barrier to partnerships, Oertengren said there are two fundamental points she lives by, and which in some respects bring industry thinking back to the drawing board.
“In any part of life, you are stronger together than alone,” she says. “I strongly believe that together we can do a better job.”
Oertengren added that thinking about the customer more widely rather than just the company’s own pure interest is crucial to a partnership. She noted: “It is all about the customer journey. Partnership is crucial, as it allows us to think differently and innovate, and that’s the source of inspiration for our businesses in the future.”
Where data is concerned, Oertengren said due collaboration is only possible with data sharing, and players in the industry are unable to this because of limitations in the technical infrastructure.
“You see regulatory barriers unwilling to share that data and therefore failing to spot those opportunities that they would be able to spot if they were sharing.”
Maude agreed, stating that in the past few years he has given up on the idea that legacy infrastructures and codes are something holding the industry back: he believes the issues are more to do with culture and attitudes towards technology.
Maintaining Agility
Oertengren said: “My biggest fear is that we become stagnant as a business, that size and growth slows down or makes us less agile as an organisation,” adding that this ties into the selection of partners and looking at a product’s core functionality, while also thinking about the company’s vision or “road map” for the future.
“So talking about road maps and where you are going as a business, and whether that road map aligns to where we think we might go. It is important to keep your house in order and think about how you integrate these solutions with your proposition, so you can stay close to the road map,” she added.
Maude said that, in assessing their agility, companies should ask themselves how they are maintaining their software – whether they are constantly improving it or just maintaining it on a project basis. He added: “Moving on from a project mindset into a product mindset is a key aspect of changing that culture.”
Digging deeper into the concept of partnerships, the panel was asked how a company can ensure it has a unique selling point when everyone is partnering with each other.
“It is essentially knowing what you are really good at and sticking to what you know differentiates you,” Herrling responded.
She added that asset finance presents many possibilities, and while sticking to what you know is critical, it is important to work with others who are pushing the agenda forward if you want to access other innovative capabilities.
Oertengren said: “I would like to go back to the customer. All statistics show that SMEs are underserved when it comes to finance. There is a definite need to get more funding across to them in order to help grow their businesses.”
She added that it is important to respect interactions with an SME, as they typically do not have much time to collaborate.
Lasting Relationships
The panel discussed what they look for in a company partner, and how to ensure a long-lasting relationship, which Carter believes is down to “mutual advantage centred around the customer experience”.
He added: “I think it is interesting how many dimensions that touches, so not only is this a route for us to build a better relationship with the customer, but this is also a way for us to manage risk.”
One of the most important factors in terms of maintaining partnerships, according to Oertengren, is working with agreeable people who “share values”.
Thinking about how a partnership will end is something Maude identified as an important factor, adding: “You hope for the best but plan for the worst.”
Skivington said that there have not yet been any failed partnerships within the BBB, but some started and then the decision was subsequently made not to continue.
“It’s that intuitive side of collaborating with a prospective partner in the way they share the ambition and vision about what we can achieve together,” he said.
Towards the end of the morning the panel was asked, with cultural habits being one of the biggest barriers to the industry, what their recommendations would be with regards to first steps.
Starting small is a good approach to slowly change the culture, Maude noted, rather than causing a massive upheaval in the organisation.
Katrin added that one thing she regularly discusses is that accepting failure is a huge part of the industry. “You have to accept that 60% of what we do is going to fail,” she explained. “Unless you embrace that you are more likely to fail than succeed, you are not going to learn.”
