LendingCrowd, the only fintech lending platform headquartered in Scotland, joined forces with DIGIT and Fintech Scotland last week to mark the end of this year’s Fintech Festival – bringing the industry together for a panel discussion and informal drinks reception.
The Best of the Fest event on Friday 27th September kicked off with a roundtable discussion featuring LendingCrowd founder and CEO Stuart Lunn, FinTech Scotland CEO Stephen Ingledew and DIGIT founder Ray Bugg.
The discussion was chaired by Sarah Ronald, founder of service design consultancy Nile.
“Fintech is the new punk rock,” said Ingledew, who won the Evangelist of the Year accolade at DIGIT’s Scottish Financial Technology Awards on 25th September.
“Fintechs are dancing at the disco, but bigger and more established companies and industries are still at the bar, worried they’ll embarrass themselves on the dancefloor,” he added.
While he acknowledged that Scotland would never have the largest number of fintech companies in the world, Ingledew told the audience at The Green Room in Edinburgh that quality was more important than quantity – and collaboration is a vital part of the mix.
“There’s a commitment to collaborate to drive change,” he said. “By collaborating, the fintechs will be able to scale up and take on the big companies to deliver better outcomes for customers.”
Continuing the customer service theme, Ray Bugg said that the UK’s major high street banks need to be aware of the emergence of tech-driven challenges because they can no longer rely on the loyalty of their customers.
“You can switch account in a matter of days and join a bank in a matter of seconds, so if customers aren’t happy they’ll move,” he said. “Customers really are shaping change in banking and fintech.”
Stuart Lunn, who founded LendingCrowd in 2014, agreed that good old-fashioned customer service – both for investors and business borrowers – remains important in this era of apps, instant messaging and online chatbots.
“It’s absolutely crucial to have a team that has direct contact with customers, whether they’re investors or borrowers. They need to know that they can pick up the phone and speak to a real person when they have any questions,” he said.
Lunn added: “The majority of people appreciate a phone call to welcome them to the LendingCrowd service. Fundamentally, SMEs are still driven by relationships, so they really value face-to-face contact. That’s why we’ve expanded our business development team to ensure we can meet borrowers in person and help to fund their ambitions.”
The discussion also touched on the lessons that can be learned on the journey from starting to growing a fintech business. Lunn told the audience that building a business is a long process that will involve many unexpected hurdles, so it is important to get the foundations right from the start.
“We’ve built a business, not just a set of activities,” said Lunn, who won the title of Leader of the Year at DIGIT’s Scottish Financial Technology Awards. “Things never happen as quickly as you’d expect when you’re building a team. You have scarce resources and you have to be aware of changes coming down the line, particularly in a regulated environment.
“That hasn’t been a problem for us, because of the approach we took, focusing on infrastructure ahead of fast growth.”
LendingCrowd was the first fintech lending platform focused on the SME market to move from interim to full Financial Conduct Authority permission in 2016. This enabled it to launch one of the first Innovative Finance ISAs on the market in early 2017.
“With hindsight, we may have put more effort into sales and marketing, but I believe it was the correct approach to focus on credit, compliance and governance,” Lunn said. “We have seen the regulatory landscape shift and change over the past five years and that will continue as regulators do a good job of adjusting to the evolving business models across the financial sector.”
In terms of attracting, nurturing and retaining the best talent, he said that start-ups should seek to bring in dedicated human resources support once the number of people in the business grows to about 25.
“Life can get in the way of your grand plans when you’re building a business. But you have to recognise that your team will have their own challenges inside and outside the office too. That’s why I was so pleased that LendingCrowd was selected as the only Scottish company to join Tech Nation’s Upscale 4.0 programme for high-growth start-ups. That experience has been invaluable for the whole team.”