Imitation is the sincerest form of flattery that mediocrity can pay to greatness. With that pithy one-liner, Oscar Wilde highlighted the downside of following the crowd. A lack of originality is a recipe for never being more than adequate.
The lending industry is dog-eat-dog and, as a result, changes rapidly. This means that, when it comes to bridging, there’s another problem with playing the imitation game. If you stand still, you are going to get overtaken very quickly by more forward-looking competitors.
While copying others and running with the herd may provide some short-term gains, a lack of originality stifles real progress and growth, not just for lenders, but for the industry as a whole. Lenders who fail to innovate with sufficient persistence will stagnate. So, there are enormous risks and, indeed, opportunity costs associated with copying others and failing to innovate.
The solution is to put more time, effort and resources into change. There are huge benefits to creating original lending solutions. To be frank, it’s always been this way in lending.
It’s the same with products. Until quite recently, very few private individuals became landlords: buying a property to rent was seen as the preserve of wealthy professional landlords with sizable deposits who could obtain commercial-style mortgages. The modern ‘buy-to-let’ mortgage was not available and the possibility of purchasing property as a means of funding a retirement income did not occur to most people. The infrastructure of loans, advice, and information was not available.
The trading of loan books via originators means lenders can maximise their returns on capital, establish large lending companies relatively quickly with a relatively large balance sheet. It sounds so simple now, but back in 2000, the “creator and trader of mortgage assets” model was a new concept.
Since the financial crisis, new online banks have challenged traditional banking paradigms by offering fully digital experiences, redefining customer expectations in retail banking. Fintech has changed the face of banking forever. Very recently, we have seen companies like Monzo not only revolutionise the banking experience for their customers but also lead the way through their digital content via email and social media. It’s businesses like Monzo that have highlighted the staleness of some of the digital activity within the specialist lending and banking sectors, too.
Perhaps the scale of evolution in the bridging industry has not been quite so spectacular? But the point still holds when we look forward to the future. Lenders who innovate gain a competitive advantage. They meet borrower and intermediary demands that their rivals fail to address. They increase efficiency and productivity.
Lenders at the cutting-edge of the industry may also find themselves better equipped to deal with changes or better able to attract and retain talent. Innovative businesses are more resilient and sustainable. Innovation drives business growth and breeds long-term success.
That’s why I’m optimistic for the coming year: there will be winners in 2025, and they will be the lenders who solve emerging challenges with innovative products, campaigns and approaches that genuinely meet the evolving needs of their customers and stand out in the market. 2025 is the year innovation should be embraced by the lending industry.
The lending market is increasingly competitive. To thrive, lenders need to embrace change and focus on building unique value propositions and solutions, rather than simply replicating what others are doing. Originality is the key.
