There’s a lot of talk about innovation in financial services at the moment, which usually means the use of technology. It’s true that technology has helped change the face of finance, from app-based banks through to online mortgage advisers.
But for anyone that has struggled to speak to a real person when they have an issue with a lending case that’s not completely straightforward and doesn’t meet the tick box criteria of an online system, technology can be frustrating.
However, innovation doesn’t need to be just about technology. For me innovation is about understanding the problem and developing the best solution. And often in the financial services sector, the solution comes from what we do best – using our expertise and building relationships.
Take one of the biggest bones of contention at the moment, the quality of service, particularly around applications and decision timescales. Rather than being the solution, the over-reliance on technology can be the cause of the problem. Advisers are often forced to submit their applications online, with little or no access to a business manager, and no option to discuss the details of the application.
That’s why when we set up Recognise Bank we put people at the heart of our proposition, building a network of relationship managers based in regional hubs. Experienced BDMs who understand both the needs of SMEs and the requirements of the advisers supporting those businesses.
But we didn’t stop there. We also looked at the pain points advisers and SMEs face when they submit their loan applications – the things that slow down the process and cause so much frustration. As a result we created what we call the ‘Deal Team’.
The Deal Team is our unique approach to managing each business loan application, with the aim of giving applicants a credit reviewed decision-in-principle as soon as possible.
With the Deal Team, when the BDM receives the required information to assess an application, they immediately review this with the credit partner, who is responsible for the underwriting decision. In other banks, the application process alone can take weeks before it’s ever sent to the underwriter.
The Deal Team can also be more hands on, with credit partners accompanying relationship managers on visits to applicants if required, so they can get a deeper understanding of a business and how it operates when making the initial lending decision.
This flexibility is particularly important for industry sectors such as healthcare and medical, where businesses are struggling to get borrowing because so many mainstream lenders are withdrawing from a market they no longer understand. Being able to have a face-to-face discussion with a credit partner as well as a BDM will really help firms like these explain their financial needs and business situation.
If the lending decision is positive, we will draw up the heads of agreement for the client to sign. At this point the third part of the Deal Team steps in, with the loan manager supporting the customer through due diligence and paperwork.
The Deal Team will continue to work together for the entire application process. For advisers this means more points of contact when they want to check on the progress. The business development manager will always be available, but it can be really helpful for an adviser to speak to the loan manager if more information is required.
This approach really came into its own within weeks of Recognise opening its doors for business in November 2020, when a £4 million loan application landed on Christmas Eve from a client who needed a quick answer. The Deal Team began work immediately, and even with the Christmas holidays to contend with, the customer received full approval and had their loan within a month.
Advisers know getting a deal over the line is only part of the job they do. It’s also vital to develop a long-term professional relationship by creating trust and dependability. With the Deal Team, we hope advisers will see our commitment to the marketplace and supporting their clients brings both trust and dependability.