IF insights: Timeless reminders or time for change?

It’s always good to hear the views of others in industry. Ideas. Challenges. Ambitions. The dialogue and collaboration fostered by events like these are essential for our sector. Well-structured and well-attended, all three events delivered a valuable mix of networking opportunities, new data and markedly similar talking points. 

Here are my takeaways, for those of you who missed them.

Takeaway 1:  Lending is bigger than lenders

SME lending depends on many parties. Borrowers. Brokers. Tech firms. Lawyers. Advisors. Accountants. There are many hands weaving the tapestry – not just lenders.

It’s easy to get lost in the granularity of the relationship between lender and client. But to create compelling propositions, deliver consistently and prosper, lenders must understand and build for the range of stakeholders outside their business.

Several speakers at NAFCB mentioned the strain caused when brokers’ commission on long-standing clients stops unexpectedly. This could be solved by the lender sharing reports on client performance throughout the funding lifecycle – not just commissions paid. 

This is of an example of the importance of making the right lending data accessible to all relevant parties. At the same time, the structure of lending products should be transparent to clients, brokers and advisors. Products should be adaptable enough to flex through borrowers’ business lifecycle and minimise the administrative burden on all parties. Stakeholders are more likely to recommend products that work for all the key parties involved. All benefit.

Takeaway 2:  Fundamentals first

Technological innovation and commercial ambition are effective drivers of growth. But without solid foundations, lending operations crumble – fast.

This was underscored by Robert Smith – Corporate Editor of the Financial Times – at SFNet. 

In his panel, Robert led an inquest into the recent failures of First Brands Group and MFS. His conclusion: in both cases, key fundamentals of IF lending were overlooked. Warning signs were missed. Corporate and funding structures were too complicated. Transparency was lacking. 

Commercial imperatives shouldn’t cause lenders to cut corners. And technological innovation shouldn’t distract lenders from the fundamentals of their business; it should reinforce them.

Open Accounting technology and risk analysis tools like our r3 RiskOps system enable lenders to monitor asset and debt performance throughout the funding lifecycle. With them, lenders can gather the right information before taking a client on, and track covenants, analyse risk events and trigger responses in life. Nothing missed; everything in its right place.

Takeaway 3:  Experience is everything

Lenders agree: we must grow the UK IF sector. UK Finance’s plan for growth – pitched at their Commercial Finance Conference – is that by creating great experiences for borrowers, we’ll strengthen invoice finance’s appeal and, in turn, confidence in the sector. 

Every touchpoint, every interaction, every part of the customer journey is an opportunity for us to improve user experiences and business outcomes, which will in turn lift us all up. 

This focus on improving client experiences extends to product delivery and management. SMEs frequently lock into misaligned financial products when they would have been better served by invoice finance. Lenders must review product portfolios and make sure product benefits are communicated to clients with clarity and confidence. 

At your service

So, how does Dancerace score against the three insights above?

After three decades in invoice finance, we continue to seek the views of industry stakeholders in our User Forum and Lender Research Panel events. We remain focused on IF fundamentals in our systems design – with robust compliance controls, smart onboarding workflows, full auditability for actions taken on our platform, automated reminders for regulatory actions, and self-serve access to relevant lending data. And we continue to lead the field for borrower experiences, with 1000+ IF clients using our Open Accounting technology to save time and effort, every day. 

Technology like ours offers demonstrably exciting opportunities for IF businesses. And it’s being delivered at a pace of change that’s much faster than the rest of our industry – as shown by the noticeably similar talking points at the three events I attended earlier this summer. 

If you haven’t seen our platform in the last six months, get in touch. A lot has changed …and the first-mover advantage is still available, for the lender that wants it.

Image courtesy of Unsplash