Brokers are in prime position to help their customers understand what's on offer
While the ability for consumers to hop straight online and apply for a loan may be growing, nothing beats the human interaction and advice from a finance professional, says CEO at Apricity Finance, Linden Toll.
According to data from the invoice lender’s latest survey, 63% of brokers said they had seen an increase in fintechs over the past 12 months and 73% said this was going to increase in the next 12 months.
With the continued growth of the sector and the introduction of new players, 84% said they could know more, or they knew nothing at all about fintech lenders.
Toll says the problem is that these new “fast fintechs” – those that offer fast online loans without getting to understand the needs of their customers – are providing little guidance to borrowers about what they offer: and this is where the broker should be “on the front foot”.
Brokers can provide a higher level of service
Apricity offers invoice finance to SMEs struggling with cash flow, and Toll says that these business operators really benefit from having a high level of service where loan options are explained to them; something many fast fintechs aren’t doing.
“With everything from confusing interest rates, a generic application process, and sometimes a lack of transparency, fintechs may still have some way to go before they are ready to offer the high level of service that many SMEs require,” he explains.
More than 50% of brokers in the survey said the ‘personal service and trusting relationship with their customers’ was an important way they differentiated themselves from fintechs. Toll agrees that the human element is an important one that fast fintechs can’t beat.
“Any time you’re making a large decision, whether it be personal or business-wise financially, you need research from experienced professionals that you’re doing the right thing. In my view, technology can continue but we as human beings like to be told we’re doing the right thing,” Toll adds.
Working with fintechs, not against them
But it is not a case of brokers versus fintech. Toll says fast fintechs are a welcome addition to a difficult lending environment and brokers should be adding them to their arsenal to help their small business customers.
While it certainly looks like there will be more fast fintech in the future, Toll says many of them will drop off as quickly as they started.
“I think the ones that prevail will be offering a reasonable position which they are able to explain readily and transparently,” he says.
