Exploring our latest enhancements to digital decisioning
Adam Ginty, marketing business partner for SME markets at Shawbrook, sat down with Ed Rixon, senior manager for Growth in Shawbrook’s Digital SME Lending team to explore the latest enhancement to auto-decisioning via the Shawbrook Broker Portal.
At a glance
Adam: Within the Digital SME team there has been a lot of focus on augmenting deep human expertise with digital decision-making to speed up flow transactions. Could you give a short overview of what was introduced?
Ed: Shawbrook has traditionally been seen as a storybook lender. Somewhere for brokers to place those hard-to-fund deals. Certainly, with the breadth of our team and the way we’re structured and empowered to find a way to do a deal, it’s something we’re very proud of. Last year, we brought to market a first-of-its-kind digital decisioning tool in our Flow space to improve speed and consistency of service. We utilise this tool for deals across the risk spectrum rather than just storybook deals. This means we can now support brokers with much more of their deal types whilst maintaining the levels of service they have come to expect from us.
Put simply, we can consume and aggregate a vast amount of data about the borrower, the asset, and historical data, and through continuous enhancements to our model, give a pretty accurate credit decision in a fraction of the time. What this means for our Digital SME Lending business is that we can employ the technology to do the heavy lifting of reviewing a case to give fast decisions for ‘tick and turn’ deals, which gives our relationship managers more time to find ways to handle those marginal cases. But also, we’re now able to provide a home for our brokers’ flow business using our Broker Portal and fast, digitally assisted decisions.
Adam: And what’s changing to this digital decisioning tool?
Ed: We worked closely with a select group of brokers last year to ensure that our initial launch was as smooth as possible. What that meant was validating that we could deliver accurate decisions, and fast. We’ve taken a lot of learning from that initial rollout, and with the feedback and support of our broker network, we’re now in a position to start expanding the use cases and deal sizes that we can push through auto-decisioning. For deals up to £250k, we can now get brokers an Agreement In Principle (AIP), in 24 hours, however in reality it can happen far quicker than this.
In the initial rollout, the crucial balance we needed to consider was to ensure that we’ve rolled out a tool that is as accurate as possible, providing the surety that when a decision has been given, we’ll stick to it, and sound risk management. By partnering with our broker network, we’ve developed a comprehensive and robust tool, and we’re now able to expand its application to a wider range of deal types and continually enhance the decision engine.
For deals submitted through the Shawbrook Broker Portal, we can now accept Sale & Hire Purchase /Lease Back to support customers who have purchased an asset with the intention of placing it on finance. We’ve also extended out to Plant Hire, for those looking to hire out plant and machinery. Alongside this, we’ve also improved balloon valuations for cars and LCVs, which supports customers in reducing their monthly payments.
We’ve also developed the tool to be able to provide balloons on a much wider variety of assets, including HGVs, trailers and many plant and machinery assets. And for longer life assets, for example, HGVs, we’ve extended the maximum asset age allowing Shawbrook to fund some assets above ten years of age at contract maturity.
Adam: Obviously, the tool is going to be looking to say yes, but it may also say no. What are the typical reasons that the system gives a decline?
Ed: We’re able to consume, aggregate and analyse a large amount of information, to process this data quickly. The intention is to build a picture with the most amount of colour possible so that we can model the likelihood of the borrower repaying, rather than simply lending based on the value of the asset. We find that we’re able to safely lend in more cases, and the system has been very accurate in modelling this.
The system itself uses both business and consumer data, so in this instance the information of the company directors, to inform the automated decisioning engine. So, what we’ve seen when all that information is fed into the auto-decisioning tool is that we’re uncovering things that a time-consuming, and manual underwrite may not. The main red flags that get picked up are significant business or business director arrears and defaults on previous finance agreements. CCJs or high overdraft excesses for the business are also common reasons for declines.
Adam: For brokers looking for a home for flow business, what should they do?
Ed: If they’re already a Shawbrook Broker, and have a potential case, the easiest way is to submit it through the Broker Portal. To benefit from auto-decisioning, the case itself must be submitted via the broker Portal. Or if they want to talk through a potential case, they can pick up the phone to their BDM.
If they’re not a broker of Shawbrook’s, but they’d like to be, they can click below to find out more information and request to join our panel.
Adam: Thank you for your time, Ed. We're looking forward to seeing more enhancements in future!
