Salad Money Impact Report 22-23 WEB - Flipbook - Page 17
RISKY INSTINCTS?
NOT FOR EMMETT –
BUT DON’T IGNORE THE
ELEPHANT IN THE ROOM
“You see a lot of complicated
products aimed at people we
serve” says Emmett Smith.
“Many don’t understand them. That
should change because of the
Consumer Duty. But there’s still the
issue of what we should be talking
about but aren’t.”
Emmett is a Salad veteran. Our
Risk Director joined the team 昀椀ve
years ago. Salad’s model appealed
“because I recognised that how
a昀昀ordability was assessed elsewhere
was inadequate and I was excited
by the potential from using Open
Banking to make loan decisions.
Some people thought applicants
wouldn’t share their data but I did not
see it as a barrier. People do what
they need to do to get the product
they want.
His instincts proved correct. A trickle
of applicants in year one became a
waterfall, now a tsunami. What key
factors determine our decision?
“We are e昀昀ectively seeing someone’s
bank statements so we want to know
whether they are being paid and
making their important payments
regularly. We can see bills that Credit
Reference Agencies can’t see, like
rent, council tax and utilities, and
whether you pay them. If we see you
2022-2023 Impact Report
can a昀昀ord the loan you are applying
for and have a sensible pattern of
昀椀nancial behaviour we are more likely
to say yes.”
Emmett says our customers, who all
have secure jobs with most earning
£20 to £35,000, “appreciate an
a昀昀ordable loan since it helps them
spread big expenses out over 12 to 18
months.” But what makes us say no?
“We can see payments to gambling
昀椀rms. We don’t want to fuel a harmful
gambling problem. If we see you
withdraw a lot of cash regularly, and
can’t see your regular expenses, we
query what’s going on. Making an
informed, fair decision is at the heart
of it. Telling people why we’ve said no
is important too, so they can get their
昀椀nances in better shape.”
Supporting all applicants appeals.
“It’s great to be part of a business
that serves customers well and
helps applicants. We have to decline
many people when it would not be
responsible to lend. But we signpost
them to bene昀椀ts, social tari昀昀s and
good 昀椀nancial education. It makes a
di昀昀erence.”
What’s the elephant in the room? “For
me, it’s the industry around individual
voluntary arrangements (IVAs) and
debt management plans. People
targeted for these arrangements
Emmet Smith,
Risk Director
may not fully understand the
consequences. Lots of so-called
“advice” is biased towards a single
solution that generates substantial
fees for the adviser without
necessarily being in the best interests
of the customer.
“To grow 昀椀nancial inclusion, I believe
it will be down to specialist loan
providers like us continuing to serve
more customers – I don’t see high
street providers entering this market
any time soon due to their focus on
excellent credit scores. On the advice
given around debt management
plans and IVAs, I think there may be
regulatory intervention at some point
to ensure it is impartial and considers
the full range of solutions to achieve
the best outcome for the customer.”
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