Ask any banker or broker about the future of credit and they will quickly tell you about digital. Try to change the subject and he’ll talk about digital again. It was difficult for him to change the subject, but isn’t that proof of a small revolution taking place?
If we take up the speech of the founding president of the MoneyResource account, Brent Lucas, at the Eurohold Consulting conference last June we understand that what made the success of this medium, which today has a million users, it is the simplicity of the product and its disruptive factor compared to the offers of the banks but especially the confidence which was quickly established in the product thanks to the reputation obtained on social networks and on the internet more generally.
So in terms of credit as in finance everything goes digital and the user takes control.
The question of the traditional broker then arises quickly.
What services can the broker then offer if a user benefits from more and more information and compares himself? Can it still offer its services in a traditional way when we are in the advent of more and more reliable and increasingly information exchanges? Can it still exist outside a group when banks demand volume of processing and automated and standardized processes?
The response from large brokerage groups is simple. Small brokers will be bought by large groups to benefit from the expensive infrastructure and interconnected with banks. They will thus benefit from the latest innovations and support to tackle subjects such as artificial intelligence, blockchain, predictive models, robotics for processing files, etc.
This answer is undoubtedly correct because, as the Director of MoneyTakers Solutions reminds us, the significant share of the credit market is today around 5% whereas it is 15% in the traditional financial sectors. Especially since we will soon have to endure competition from GAFAs who are gradually setting up in the world of payment …. and soon in the world of credit?
And why not the augmented broker?
The path seems to us more tortuous and the purpose less obvious. The mastery of technology will not only be the exclusivity of large groups but could be owned by third parties whose object would be the pooling of resources.
Small and medium-sized brokers could thus benefit from the same resources as larger ones and offer the same services. Would banks then always have an interest in favoring the signing of mandates with those who make the most volume? It is no longer so obvious.
Being able to standardize and offer the same services as the largest, traditional brokers would benefit banks from the same economies of scale.
The new broker or augmented broker could thus imitate the big ones and always offer what makes the very essence of the profession: proximity and advice. Because even if the user consults several brokers on the internet (7 on average for the repurchase of credit), if he forges an opinion, if he is able to make simulations,… he will always be happy to be able to s ” hand it over to a “board”.
And the next step?
The rest is still a bit confusing. The drop in the rate of wear and associated margins seems lasting, the position of the banks is versatile and the search for the new banking model is permanent, we see the outline of the coupling between payment and credit, we are caught in the game of redemption automatic credit, we see the regulations evolving and we can wonder if the payment institutions, which cannot offer credits today, will hang in the way of credit institutions,…
Fintechs revolutionize payment, they revolutionize credit, in a disruptive way and attack commissions and intermediation and can at any time question a path that was thought to be traced and a story that was thought to be written.