Lender innovation can only take us so far

Paul Aitken

May 10, 2017

Paul Aitken, chief executive of Borro, responds to Tony Ward’s article on innovation

Innovation in any walk of life inevitably comes about as a result of external pressure to change the status quo for the better or when someone dares to challenge the established order.

At Borro, we challenged the belief that all secured lending had to be against bricks and mortar and introduced a new facility secured against luxury assets and the business has flourished.

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However, on a more fundamental level in today’s market, a growing number of would be borrowers are denied access to funding as lenders and regulators continue to balance meeting customer needs, particularly from those who feel disenfranchised, and the dictates of ethical lending and in a way that meets current compliance requirements.

As a regulated lender ourselves, we understand the balancing act that all lenders face and it is going to take lenders, regulators and government getting together to decide how best to proceed.

In this case, lender innovation in product design and criteria is restricted and only possible within the framework that currently exists in law. Therefore, out and out innovation is a great aspiration but without a fundamental rethink about the relationship between customer requirements and protection against lenders’ ability to deliver within the existing construct, even the best entrepreneurial spirits will not prevail without reframing the structure in which the industry currently operates.

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