The broker lender relationship–where do we go from here?

We all operate in an ever-changing marketplace with varying business needs, new broker services and evolving loan products. But how will this impact the broker lender relationship in the short to medium-term and what will the future hold?

More time (and need) for relationships

New technology and automated solutions offer brokers and lenders the opportunity to free up valuable time and improve productivity. In particular, more mundane tasks, such as uploading loan application documents and sifting through financing documents are likely to be fully automated over the next few years.

Whilst this helps brokers to offer their services at a lower cost, it also allows them the time to build and strengthen relationships with their clients and key lenders.

The shift towards customer service and client satisfaction will become particularly apparent going forward. For example, businesses and individuals are slowly becoming tech-savvier and increasingly financially literate. As a result, brokers will have to go further to meet the demands of their clients evolving needs. Constantly making an effort to go the extra mile and looking for new ways to add value will become the new normal.

Further consolidation of the market

Hundreds of alternative lenders have entered the market over the last years. And while we will certainly see new–and improved–products being launched, we also expect some less successful companies to fold, and others to be acquired by competitors.

We believe that those lenders which offer a unique product and have a strong focus on customer service and broker relationships will be most successful. And by continuing to define their loan product, they will further strengthen their position in the market.

Meanwhile, alternative lenders with a variety of loan products will ultimately be forced to reduce their offering to remain competitive.

Diversification will be key

Brokers, on the other hand, will find themselves in a very different situation. Apart from the growing importance of strong relationships and client satisfaction, they will need to diversify their offering.

While it was sufficient a few years ago to specialise in just one loan product, i.e. becoming a mortgage broker or specialising in asset-based loans only, more and more brokers have started to diversify. By offering a one-stop solution, brokers will be able to retain their client, up-sell their services and remain competitive.

For UK businesses looking for funding, further refined loan products, better customer service and an improved offering from their brokers will be hugely beneficial and will work towards ensuring a speedy loan provision.

It is encouraging to see that brokers and lenders work closely together. With this shared goal in mind, combined with a desire to adapt to the needs of small businesses, a stronger lender broker relationship looks to be a likely outcome for the near future and beyond.