Metrics Monthly | December 2020 | UK Edition

Metrics Monthly | December 2020 | UK Edition

Metrics M onthly December 2020 | UK EDITION In this issue READY FOR A RECORD 2021?

David Wylie predicts a phenomenal spending rebound by the end of the first quarter 2021, as the brakes are taken off pent-up demand

In this issue

Welcome Page 03

In the news Page 04

Premier Power Top 20 Page 06

Ready for a record 2021? Page 08

Scalable automation Page 10

Two new awards Page 11

Auto Decision Platform Page 12

Auto Decision latform

Online Gambling Page 13

Organic Growth 25 Page 14

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Case study Page 16

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02 | Metrics Monthly

December 2020 | UK Edition

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Welcome

Welcome to the December issue of Metrics Monthly!

required resources to fully capitalise on it. Our headline piece this month predicts a record 2021, as CEO David Wylie fore - casts a phenomenal spending rebound by the end of the first quarter. Find out why on page 8 . The inaugural Organic Growth 25 was announced this month, and we're pleased to have been featured. You can find out more about the cohort, what inclusion means and the qualification criteria here . As the year draws to a close, and many businesses begin the wind-down for Christmas, make the most of the quiet period to catch up with the latest news, industry insights and updates in this issue of Metrics Monthly. As always, you can subscribe to the monthly newsletter on our website.

Contacts

Whilst this Christmas period may be an unusual one, we're still in the festive spirit and looking forward to the end of what's been a difficult year. You can read our full Christmas message on page 7 . As a prominent software provider for many mortgage lenders, we've been keeping an eye on the industry in our past few issues of Metrics Monthly. This month, we're focussed on the mortgage payment holidays still in place for 127,000 customers. You can read more in our In the News section. In addition, we're looking at why the lack of internal alignment could hold back firms from reaching their Open Banking potential as new figures show compa - nies realise the potential of investing in the revelation but may not have the Merry Christmas 07

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Metrics Monthly | 03

In the news

127,000 mortgage holidays still in place Recent figures show that 127,000 mortgage holidays were still in place in mid-November. This is a signifi - cant reduction since June, when over 1.8million people were deferring pay - ments as a result of the pandemic, with analysis showing that 89% of customers who took the mortgage holidays have now returned to making repayments.

assessing customers’ abilities to pay their mortgages, and lenders with an infrastructure capable of assessing individual circumstances are proving better equipped to provide help as and when needed. The FCA’s 6 month extension of the mortgage holiday scheme was a welcome relief for those worst hit by the economic crisis caused by the pandem - ic, but customers are urged to contact their lender directly to discuss their options and receive tailored support. Managing Director of Personal Finance at UK Finance, Eric Leenders, said: “The banking and finance industry remains committed to helping customers get through these challenging times. Mil - lions of people struggling with Covid-re- lated income shocks have been sup - ported through payment deferrals, and lenders will ensure customers continue to receive the help they need.”

Whilst this is good news for the mort- gage payers who are now able to return to regular repayments, thus implying their finances are more stable than during the peak of the pandemic, the number of mortgage holidays that have remained in place suggests some cus - tomers are still facing difficulties. Whilst the volume of payment deferrals has reduced, mortgage lenders have adapted to now providing more tai- lored support for homeowners facing financial difficulties. Factors such as affordability now play a larger role in

New Business Analyst joins the LendingMetrics team

Carl Zimmerman joins the team as Business Analyst Following increased growth, Lending - Metrics decided to add another Busi - ness Analyst to the team. The company welcomes Carl Zimmerman, an expe - rienced senior credit manager with a history of working in the financial ser - vices industry.

decision engines, which will be deployed into their Auto Decision Platform (ADP) or internal systems. The role plays an integral part in the on-boarding of new clients and ongoing support for existing clients.

About the appointment, Head of Oper - ations Paul Brown commented: “We’re pleased to welcome Carl to the team and look forward to seeing the Busi - ness Analyst department grow.”

Carl, who recently relocated from Cape Town in South Africa, brings to the company a wealth of experience in credit, collections and recoveries. He enjoys longboard surfing and joins the company at our UK head office. As a Business Analyst, Carl will work closely with clients to design tailored

Business Analyst Carl Zimmerman

04 | Metrics Monthly

November 2020 | UK Edition

Lack of internal alignment could hold back firms from realising their Open Banking potential

FCA reminds firms to be ready for end of transition period With the Brexit transition period due to end on 31 December, the FCA are reminding firms to be prepared for a number of changes to regulations. In a couple of short weeks, EU laws will no longer apply and the FCA has set out detailed considerations for firms to understand if/how they will be affected and any actions they may need to take. Nausicaa Delfas, Executive Director of International at the FCA, said at the start of December, “with just a month to go until the end of the transition period, firms need to make sure they are prepared for the end of passport- ing, and for the new financial services landscape after the end of the transi- tion period.” More information about the FCA’s guidance can be found here.

A new survey by Tink found that finan - cial institutions see an opportunity in Open Banking but believe that a lack of internal alignment risks holding firms back from realising this potential. Tink surveyed 290 financial executives across multiple European countries and found over two-thirds of those surveyed are aware of the opportuni- ties of Open Banking and believe that the benefits outweigh the potential costs. However, only 43% of product owners believe their team has the required resources to fully capitalise on this. UK and Ireland country manager at Tink, Rafael Plantier, said: “we should not underestimate the enormity of

the task that financial institutions face in transforming their operations to become Open Banking ready. It is to be expected that there are differ - ing levels of buy-in for open banking across the organisation, and pockets of the business that may lag behind in embracing the opportunity.” Regardless, the investment in Open Banking for the future is clear: accord - ing to the report, the average annual Open Banking spending growth rate is 20-29%. Compared to 2019, spend - ing on Open Banking has increased by 63%, with budgets distributed fairly evenly across organisations’ departments. You can read the full report here .

+44 (0) 2394 211010 | www.lendingmetrics.com

Metrics Monthly | 05

Premier Power Top 20

Credit Connect announces its company power list for 2020 LendingMetrics are delighted to have been featured as a top 20 ‘premier’ company on the Credit and Collections 2020 power list. companies are a diverse mix of compa - nies that have enhanced technological innovation.” and other well-recognised names in the credit and collections sector.”

The announcement isn’t the only rec - ognition that LendingMetrics have received from Credit Connect recent - ly, after being awarded the Credit Risk Solution award at the 2020 awards last month. The company received a special star award for consistent innovation in this sector by winning Credit Risk Solu - tion for the fourth year in a row. A report reviewing the 2020 awards will be available mid-December and will feature enhanced profiles of the top 20 companies as well as a league table in order to showcase who is leading the way in innovative technology. The 2020 Premier Power Top 20 com - panies, in alphabetical order, are listed below.

LendingMetrics is pleased to receive recognition as one of the top 20 inno - vators in credit and collections, follow - ing a successful year for the business despite the obvious obstacles many SMEs have faced. Colin White said: “The companies that have made the top 20 ‘premier’ list this year are now high - lighted by their dedication to innovation. All the companies listed have provided solutions that have helped to enhance the best customer outcome through lending or collections processes.” About the achievement, CEO David Wylie said: “We’re delighted to be fea - tured on the company power list once again, alongside fellow industry leaders

Now in its second year, the company power list is a round-up of the most prominent and innovating companies in the industry. Each year, Credit Connect identifies the top 20 ‘Premier’ innova - tors based on research into the finalists and winners of the annual awards. The power list acts as an index of compa - nies providing technology innovation and achievement, recognising indus - try-leaders who have contributed to progressing industry standards and excellence. According to Colin White, founder of Credit Connect, “the top 20

Aire Aryza Group Callminer CCS Credit Kudos CRS (Credit Resource Solutions)

Innovation Software Jaywing LendingMetrics Modulr MotoNovo Finance Paylink Solutions SmartSearch TransUnion Webio Zoot

Divido Elanev Esendex IE Hub

06 | Metrics Monthly

December 2020 | UK Edition

Merry Christmas 2020 was undoubtedly a difficult year for many. The Covid-19 pandemic sent shockwaves across the world, and it's still not over yet. There is hope on the horizon, however, and with the first official vaccinations being administered this month we saw a sense of relief sweep the nation. The partial lifting of restrictions this Christmas provides a much-needed opportunity to spend the festive period with our loved ones, and we hope, whatever your plans may be, that you stay safe and have a wonderful Christmastime. From everyone at LendingMetrics; we wish you a Merry Christmas and a happy New Year.

FROM ALL OF US AT

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Metrics Monthly | 07

Ready for a record 2021? David Wylie predicts a phenomenal spending rebound by the end of the first quarter 2021, as the brakes are taken off pent-up demand

2020 has without doubt been one of the most tragic years in living memory. The premature death and serious illness caused by the pandemic around the world will always be remembered by most people as the real tragedy and rightly so. Loved ones have been lost, separated or left scarred from their exposure to COVID-19, and my thoughts are with those families and their friends. There have been many other disastrous consequences of the pandemic, which will also be with us for a long time to come. Countries face eye watering mountains of (albeit cheap) debt that needs to be repaid, economic activity has been crushed, jobs lost, and fami - lies impacted by the crippling impact of such financial shocks. Stretched health services have been unable to maintain the momentum built up over the past three decades in combating chronic illnesses such as heart disease and cancer, and the lack of screening and treatment regimes is predicted to have a long lasting impact on survival rates. But, despite all of these challenges, the world will continue to turn and human nature will endure. Our desire to build,

innovate, provide for our loved ones and enjoy life to the fullest extent we pos - sibly can, will prevail. As the pandem - ic has shown us, life is fragile and too short to take for granted, time is of the essence. So, whilst acknowledging the sadness of 2020 and the likelihood that this horror still has some time to run, in anticipation of the imminent mass-vac - cination campaign, I would like to con - sider what 2021 will hold for us all. After all, life is for living! During this pandemic, tens of millions of us in the UK have had to put plans on hold, whether it be holidays, home improvements, a new car, discretionary spending and even university educa - tion. We have been locked away in our homes, unable to spend money and, in the vast majority of cases, either on full pay or on 80% furlough pay. This has created several anomalies: • Lower spending: No commuting costs, less childcare, no daily lunch and coffee spend, and of course, NO HOLIDAY! Those tens of millions who have remained in work (still by far the majority) have seen their cash pile up.

• Less debt: Many customers have apparently been using this period of relatively stable income and reduced outgoings, to pay down debt. Speak - ing with some of our UK customers, they have reported a drop in demand and an increase in collections. Whilst that may seem positive (and indeed it is so for personal debt levels) in actual fact it results in a reduced loan book for lenders who are seeking to grow their balance sheet. Indeed, to further illustrate this trend, the first lockdown saw some £7.4bn of credit card and loan debt paid off by UK consumers. • Pent-up demand: This is one surely we can all relate to. The thought of being able to get away for a holiday, enjoy a nice meal, upgrade the car, start those home improvements. All those things in most cases we could have afforded, but we haven’t been allowed to. Just this week, EasyJet reported a 50% surge in weekly booking numbers after US drug maker Pfizer announced their COVID-19 vaccine. Imagine what will happen when the immunisation program is in full swing and a return to normality begins.

Lower spending

Less debt

Pent-up demand

08 | Metrics Monthly

December 2020 | UK Edition

Of course, a huge amount of uncertain - ty remains. When will the vaccines be distributed to the wider population, will the Government manage the vaccina - tion roll-out effectively, how quickly will the economy rebound? In truth, no one knows for sure. But my prediction is for a very, very strong rebound from the end of Q1 onwards. Demand for everything will be phenomenal, probably even record breaking. We saw this happen in July, following the end of the first lockdown, when new car year-on-year sales rose by more than 11%. In parallel, we should be prepared to pay more for what we

buy given that capacity has shrunk and the age-old economic rules of supply and demand will likely take hold (try Googling a price for a flight, you’ll see what I mean). So, finance providers need to be pre - pared. Credit demand is likely to be lifted high by this rebound and lenders should be ready to cope. You have been warned: applications for finance will explode on the back of released demand for cars, home improvements, holidays, etc. Until then, stay safe, keep your distance, wash your hands and be ready to be vaccinated.

Above: LendingMetrics Managing Director David Wylie

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Metrics Monthly | 09

Scaleable automation LendingMetrics are delighted to announce that Decimal Factor have selected ADP for their assisted decisioning

Business funding specialist Decimal Factor have chosen to use Lending- Metrics’ Auto Decision Platform (ADP) for their assisted decisioning in order to orchestrate their credit decisioning >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18

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