Woody Allen famously wrote: “More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness; the other, to total extinction. Let us pray we have the wisdom to choose correctly.”
This may be the feeling of many in this country, watching on in helpless anxiety as our political leaders fumble through the minefield of what is probably the most momentous time in our history since the Second World War.
As was discussed at the ASTL’s recent annual conference, members have shown increasing concern about the UK’s economic prospects but remain confident and bullish about their own firm’s outlook. They are not, however, unaware of the risks and difficulties they face.
The industry needs to train talented people to think for themselves. Computerisation will never replace the skills of underwriters, who have to think beyond narrow confines. Fraud continues to grow as fraudsters manage to stay ahead of attempts to curb their activities. In many ways, computerisation has made their aims easier to achieve. Lenders also need to be aware that no one is above suspicion and even trusted employees may commit fraud. Circumstances may turn once honest people to crime as a way of dealing with financial pressure.
Beating the mainstream
It should not be forgotten, though, in this age of robo-advice and increasing reliance on digital solutions, that bridging is as much an art as it is a science. Interpersonal relations and a willingness to roll up sleeves to puzzle out solutions are the keys to ensuring these objectives are achieved. A major reason for the success of the bridging sector is the inability of mainstream banking to deal with issues on a detailed level. ‘Computer says no’ predominates on the high street.
The issue of debt, both private and state, remains the elephant in the room. Government debt totals £8.6tn, way above the usually quoted figure of £1.8tn, which ignores other obligations such as state and public-sector pensions. And this figure continues to rise inexorably as our balance of payments is not expected to move into the black for at least 10 years, if ever. At some stage there will need to be real austerity coupled with higher tax payments because we cannot rely on ‘the kindness of strangers’ forever.
Personal debt is rising too. At the end of August, people in the UK owed £1.5tn. This is the highest-ever figure and, according to the OBR, is expected to reach £2.3tn in 2022. Unsecured credit lending was £20.9bn, the highest since 2008. With inflation outstripping wage growth and disposable income levels, this is worrying.
We live in a world where there are no longer any certainties and situations change with alarming rapidity. It would be foolish to predict what will happen next.
Nevertheless, I do not think the future is all gloom and doom. In December 1948 in Durban, South Africa, with two wickets standing and 12 runs required off the last three overs, Cliff Gladwin, the English bowler, came into bat. He scored the winning run from a leg-bye with the last ball of the match after the ball had struck him on the thigh. In the dressing room afterwards he said to Dudley Nourse, the South African captain: “I told you: cometh the hour, cometh the man.”
Maybe we should not depend on any individual to provide the necessary leadership, but trust in ourselves and our better instincts to stride up to the wicket and hit our problems for six.
Benson Hersch is chief executive officer of the Association of Short Term Lenders