Metrics Monthly | September 2020 | UK Edition

Metrics M onthly September 2020 | UK EDITION

In this issue THE FUTURE OF FORBEARANCE

As the Covid-19 Mortgage Holiday draws to a close, what’s next for the mortgage industry?

In this issue Welcome Page 03

In the news Page 04

The future of forbearance Page 06

19,000 votes counted Page 08

Regulators must act now Page 10

Case study Page 12

The ADP Landscape Page 14

Auto Decision Platform Page 15

Auto Decision Platform

02 | Metrics Monthly

September 2020 | UK Edition

Decision Platform (ADP) saves on time, , driving more profits to your bottom line.

Welcome

Contacts

Welcome to another compelling issue of Metrics Monthly! As local lockdowns put socialising in some parts of the UK back on hold, the finance industry world is still revolving, and this month’s newsletter looks at recent awards, new forbearance guid- ance and the collapse of rent-to-own retailer BrightHouse. Our ‘in the news’ section looks at how Fintech organisations are being sup- ported by Tech Nation’s Fintech Pledge, which sees big name banks sign on the dotted line in an effort to keep the UK at the global forefront of Fintech com- panies. We’re also showcasing the new Nesta challenge which offers £2.8m to support solutions that can help people access financial assistance or access affordable credit during this difficult time. Our feature piece this month follows on from our May article about how mortgage lenders have been recog - nised extensively for the fantastic work

they are doing to process millions of payment holiday requests. As the 6 month Mortgage Holiday scheme draws to a close, we ask “what’s next for the mortgage industry? ” and look at the recent FCA guidance which aims to ensure firms provide tailored support to mortgage borrowers who continue to face financial difficulties. Amidst the negativity in the media this month, we have some good news to share, as the results of 19,000 consum- er votes are counted and LendingMet - rics is recognised for our outstanding work with our partners. Our featured thinkpiece this month is by CEO David Wylie, who says the col - lapse of BrightHouse and others, plus an ongoing tidal wave of compensation claims, should act as a wake-up call to the regulator on page 10. If you haven’t subscribed to Metrics Monthly yet, make sure you head to our website to sign up and receive monthly editions straight to your inbox.

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Metrics Monthly | 03 Our online Auto Decision Platform (ADP) saves on time, money and errors, driving more profits to your bottom line. ADP assesses your applicants in real-time, 24 hours a day, and delivers consistent and accurate lending decisions in milliseconds.

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

In the news

UK banks sign pledge to collaborate with Fintechs The networking group Tech Nation recently invited banks to sign its new Fintech Pledge, in an aim to boost the sector by establishing partnerships between fintech firms and banks. Early signatories included Bar-

drive positive change in finance, be it underpinning new customer solutions or transforming regulatory reporting.’ Supported by HM Treasury, the pledge also encourages the banks to follow good practice and improvement, requiring signatories to provide bi-an - nual feedback within the first year. These steps will ensure that the pledge remains on banks’ priority lists and that their actions are overseen, with support and guidance provided when needed. The pledge follows the UK government’s independent review of the Fintech sector in July, in order to ensure the UK remains at the forefront of the global Fintech market. The £7bn sector will play a vital role in the economy’s return to normality following the coronavirus pandemic.

clays, HSBC, Lloyds Banking Group and NatWest group, with additional banks able to sign the pledge from 15 September. The pledge involves the banks provid - ing clear guidance to technology firms and promising to provide a dedicated landing page and a named contact for firms looking to partner with them. Tech Nation’s Fintech Delivery Panel director Victoria Roberts said: ‘Building partnerships with established institu- tions is a fantastic route for fintechs to

Nesta launches £2.8m Rapid Recovery Challenge Innovation foundation Nesta has launched a £2.8 million challenge called the Rapid Recovery Challenge to support solutions that will improve access to jobs and money for people hit hardest by the Covid-19 economic downturn. the greatest potential to help people access financial assistance, manage their cash flow or access affordable credit.

Ravi Gurumurthy, Chief Executive of Nesta, said: “COVID-19 has created a huge economic shock. Millions face severe threats to their job security and household finances, and we know that low-paid workers, people in insecure roles and those under 25 will be hit hardest. I’m looking forward to seeing the range of solutions innovators develop to address these issues and support those whose jobs and financ - es have been most impacted by the pandemic.” Entries for the challenge are now open and close on the 26 October. To find out more about the Rapid Recovery Challenge click here.

Nesta’s own research of those in low paid or insecure work shows that, nearly a third of those surveyed (32%) believe that a second lockdown would send them over the edge financially. In order to attempt to support these people, the Rapid Recovery Challenge aims to find Fintechs, charities and other organisations that address the challenges faced by these people. The challenge requires organisations to enter their solutions in a bid to win up to £475,000 of backing. The most promising solutions will have

04 | Metrics Monthly

September 2020 | UK Edition

Three new faces in the LendingMetrics office We are pleased to announce the appointment of three new members of the team.

The first of these, Adam Hill, joined the team as a Senior Developer and brings a wealth of experience in software design. Adam’s skills in development aren’t just limited to the workplace; his innovative game Hot Shots won the Intel App Inno- vation Contest in 2013. He joined the company whilst some members of his team were working remotely due to the pandemic, but luckily LendingMetrics staff are now very well versed in video conferencing and communicating effectively whilst working from home, meaning Adam was able to quickly hit the ground running with working on research and development for our mul - ti-award-winning Auto Decision Plat- form (ADP). Nizam Ullah joined the team as our new Finance Manager, and will be taking the lead on finance management for the business. Nizam brings over 10 years of experience to the role, and is also a member of the Chartered Institute of Management Accountants. Finally, Ashok Davuluri joined the company as a Developer with over 6 years of experience with full-stack .NET development. Nizam and Ashok join the team at our new office space in White - ley, and after a busy week of induction activities are both looking forward to getting stuck in with their new roles.

About the new appointments, Head of Operations Paul Brown said: “We’re thrilled to welcome three new starters to the company this month, and pleased that, in these difficult times when many industries are struggling, LendingMet - rics, as a nimble and reactive Fintech,

has remained stable. As a result, we are able to continue our substantial rate of growth as a business, with more excit- ing additions to the team soon to come.” To connect with our new teammembers on Linkedin, click on their profiles below.

Senior Developer Adam Hill

Finance Manager Nizam Ullah

Developer Ashok Davuluri

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

Metrics Monthly | 05

The future of forbearance In May we released an article about how mortgage lenders across the country have been recognised extensively for the fantastic work they are doing to process millions of payment holiday requests. The COVID-19 Mortgage Holiday scheme allowed borrowers to request a payment break or reduced monthly payments, and was extended from 3 months to 6, resulting in huge volumes of requests.

Whilst these forbearance requests pro- videdmuch needed reassurance for the many people struggling due to redun- dancies and failing industries, lenders expressed concern that the mortgage payment holidays would only delay the inevitable for too many customers. Although the majority of customers would most likely resume repayment as normal, many could remain in finan - cial difficulty, with the potential for a swathe of mortgage defaults hitting later in the year. This could potentially delay a recovery in the finance indus - try as cash flow is dented, prevent - ing new loans from being granted. The question arose: “What does the future hold for the mortgage indus- try?”. Recently, the Financial Conduct Authority (FCA) has made a step towards answering this question, by announcing proposals to ensure that firms provide tailored support to mort - gage borrowers who continue to face difficulties with their repayments as a result of the pandemic. The guidance aims to ensure cus- tomers receive the support they need, whether they requested payment deferrals at the start of the pandemic and continue to face financial difficul -

ties or their financial situation is newly affected after the current guidance ends, which will be on 31 October. The new, draft guidance proposes that firms consider the appropriateness of a range of short and long-term support options, directly related to the specific circumstances of the customer. This, however, would require many lenders to find better processes that allow them to assess actual affordability, based on up-to-date details. Lending - Metrics’ OpenBankVision (OBV) does exactly this, providing fully verified, cat - egorised and machine-readable Open Banking >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

www.lendingmetrics.com

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