Roy Armitage, head of credit, LendInvest
Selling a loan is the part of a lender’s workload most visible to brokers and borrowers. Just as crucial – but less frequently observed – is how that lender services that loan.
A commitment to quality servicing is one that’s front and centre for us at LendInvest and it’s that preoccupation that led us to form an industry-first partnership with Pepper, the loan servicing group. So what counts as good servicing?
There aren’t that many unique selling points when it comes to servicing loans well. The key for a borrower and their broker is knowing that their transactions will be dealt with efficiently and that if they have a question it will be answered quickly. Essentially good servicing means that the whole process between initial drawdown and final payment runs without a hitch.
When a lender gets it wrong – when it lets a borrower down by failing to address their concerns, or by not delivering on the borrower’s expectations – then it can significantly detract from the attractiveness of the lender’s business.
It’s rather like the cliche of a good football referee being one that you don’t notice during the game. Borrowers may not always be aware that they are receiving a quality level of servicing on their loans, but they certainly will notice if it’s not up to scratch.
However much a lender and its borrowers move online over time, the servicing of loans comes down the people doing it and their own expertise. As the person responsible for overseeing the quality of our lending, I need to have complete confidence in my team of servicers, knowing that they understand the very DNA both of our proposition and that of our customers which is crucial in any form of lending, but when a lender is dealing in high value, property based loans like LendInvest then it becomes even more important.
Appointing a third-party servicer to partner with us became a matter of trust. As a lender, we need to know that the partner understands and is aligned with what we are trying to do. Knowing that our partner puts enormous value on the ability of its people to deliver market-leading services was paramount.
A question I’ve been asked is, if loan servicing is so fundamental and critical a factor in lending, why outsource the work to a third party partner at all? Why entrust a partner to uphold a level of service you’ve worked so hard to achieve? The answer is simple: it comes down to a question of scale. As a lender with significant growth plans, partnering with a respected servicing business like Pepper will help us to scale up effectively. They can help us manage our growing loan book in the most efficient way, while allowing our internal team to devote their energies and experience to the loans that require more intense special servicing, such as those in arrears or who are unable to redeem.
Taking into account our broad ambitions to offer regulated lending products in the future, finding a partner that understand the regulatory landscape was crucial too. We know that Pepper have the in-built expertise and knowledge, the skills necessary that when the time comes for us to branch out into those other forms of lending, we will be able to do so swiftly and with confidence.
It’s an exciting time for LendInvest, with our ever-expanding range of specialist loans. But we never rest on our laurels and know that repeat custom depends on the quality of experience we deliver throughout the lifetime of our customers’ loans.