We offer a wide variety of lending options in the commercial market, but creating something new is one of the most exciting parts of my job. So I thought I would share with you how it’s done.
There are many aspects to address within this, from how our products reach the market and how we ensure they meet a definite market need.
Any new productg also needs to suit our network of brokers and, at the same time, remain compatible with our business model.
Developing a product and meeting these requirements is no small task.
Identifying the need
Perhaps the most important stage in any product development process is the initial identification of need.
The process is often triggered by demand from brokers, who might send us deals that fall outside the boundaries of an existing product. Because all our deals are reviewed individually, small anomalies can often be accommodated.
However, sometimes we notice a trend, whereby more than one broker has sent us a deal with similar circumstances beyond the range of the product.
This demonstrates that there’s a market demand for something we don’t currently offer, and recognising this is enough to set the wheels of product development in motion.
Our residential refurbishment product is perhaps a good example of this.
Prior to developing this product, brokers could offer a short term loan to investor clients wanting to buy a property before undertaking decorative works, and could then move them onto a term loan.
However we had more and more brokers approaching us with clients wanting a term refurbishment loan from the offset.
They wanted to hold onto the property for longer for rental purposes and did not want the fuss of two loans.
The residential refurb product which ensued was a direct result of brokers’ feedback regarding demand, LTV and pricing.
Once we’ve identified that there’s a real requirement for a new product, then, I will begin more detailed research – canvassing our network of brokers as well as the market more generally.
It’s also necessary to consider the product in the context of Shawbrook’s business model at this stage, so I will always look at the feasibility of its development with this in mind.
There’s a lot to think about, but we work on it as a team. Product development is a fixed item on the agenda of our monthly sales meetings, so everyone gets involved in supporting the activity.
By this point, my market research will have established what existing products are available in the sector we’re exploring.
I will get together with the commercial product development team at Shawbrook – which includes the managing director of Commercial Mortgages, a senior lending manager, and the heads of specialist lending and lending and credit – for a brainstorm.
We will then use this market information to discuss what we can do that is different. Having identified some options, I will go away and put the basic structure and criteria together for the proposed new product.
Having retrieved the refined product specification, managing director of commercial mortgages Stephen Johnson and I work together to finalise the details and check everything is in order before the product gets ultimate sign-off.
It is at this stage that decisions are made as to pipeline availability – that is, whether it is appropriate for clients with relevant deals that are already working through our systems to be offered it, or whether it should apply to new enquiries only. Having reached these conclusions, we start to think about exactly how we take the product to market.
We take great pride in ensuring all our products are optimised and serve our intermediaries and their clients as best they possibly can.
In order to maintain this standard we speak to a wide range of brokers throughout the development of a new product.
This is as true at the post-development stage as at the product’s conception. This is why we sometimes feel it appropriate to pilot our products before launching them to the wider market – giving early access to a couple of our valued strategic partners.
We are currently doing this with the automated process of our vanilla buy-to-let product, fine-tuning the system, product and criteria as necessary using the brokers’ feedback.
But the refining of our products doesn’t end with the termination of a pilot.
We are constantly reviewing our products and adapting them in response to market changes and what we learn from brokers. Indeed the brokers themselves are often best-placed to tell us about those market changes as they see them first-hand.
Brokers complete the picture on everything we do on the commercial mMortgages division, which is why they are such an integral part of our product development – from conception to delivery and beyond.