The escalating importance of UK brokers to the national new
business effort is indicated by how brokers view themselves. The
greater pressure on brokers to provide ever more complex finance
packages was highlighted in a survey that Hitachi Capital carried
out recently of some 103 brokers.
Respondent brokers recognised that they need to increase their
product provision, both qualitatively and quantitatively, in order
to increase customer satisfaction (see graph below).
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Some 89 per cent of brokers agreed that they need to constantly
seek ways to improve the service they offer to customers. In
addition, some 80 per cent believe they needed to constantly
improve the finance products they offer customers.
With the increased complexity of customers’ demands comes the
recognition that the old days of a man in a back bedroom providing
simply an option of a hire purchase agreement or a conditional sale
agreement (and woe betide the customer who wanted a contract hire
quote in a hurry) are long gone.
With the rise in importance of brokers comes a commensurate rise
in their responsibilities. Brokers are now commonly asked to obtain
finance for a raft of complex and varying purposes such as
directors’ cars on an operating lease, a large piece of equipment
on a linked-rate escalator agreement, a short-term stock
arrangement for demonstrator cars and an invoice discounting
facility for a client’s back office.
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By GlobalDataAs a consequence, some 67 per cent of broker respondents told
Hitachi Capital that they need to offer an ever greater range of
products and 65 per cent believed they needed to be able to educate
customers more about the availability of flexibly tailored
products.
As expected, smaller
brokers (the vast majority) are finding it the most difficult to
summon the expertise in-house to provide more complex finance
structures (see graph 1).
Of those brokers introducing balances up to £5m each year some
69 per cent felt they needed the expertise to educate customers
more about their product range. This fell to 60 per cent of brokers
introducing between £5m and £10m a year and down to 54 per cent
amongst those larger brokers who introduce over £10m each year.
Nevertheless, from all brokers surveyed the message was clear –
market demand is for greater product flexibility.
Martin
Cutbill, divisional chief executive for finance and insurance
services at Hitachi Capital says that brokers are “acutely aware of
the need to innovate and improve performance – more so than the
funders they use.”
Cutbill predicts that for the one- and two-man broker operations
such levels of innovation and implementation will be difficult to
achieve and will, inevitably, lead to industry consolidation.
With greater innovation and increased delivery of more complex
funding packages, comes the need for greater technology. Cutbill
believes that the two come hand in hand.
He comments: “The industry has been slow to take advantage of
new technology – which is an issue for funders and brokers
alike.”
Andy Shuter, managing director of Frontline Solutions (UK) told
Motor Finance that a modern broker’s system should be able to
accept manual entry, and import proposal applications. It should
include a postcode finder and enable communications with the
customer, the dealer and the lender via email and SMS as well as
fax.
It should be able to send applications electronically to lenders
via extensible mark-up language (XML), website integrations, email
and fax. It should be able to transfer declined cases, search
customers and cross check, analyse profits, calculate finance
penetration, evaluate dealer efficiency, and include customer
relationship management functions as well as diary and task
functions. Finally, it should be able to be able to integrate with
credit reference agencies, Car Data Check, HPI, CAP and
EurotaxGlass’s.
The days when brokers were totally dependent on “phone and fax”
are truly on the way out. “The winners,” Cutbill adds, “will be
those brokers who add the most value to their customer and help
them to identify the right solutions – and those lenders who do the
most to help them achieve this.”
Motor Finance Issue: 43 – May 08
by
Brian Rogerson , Deputy Editor
Published for the web: May 22 08 15:39
Last Updated: May 23 08 15:8
