The Intermediary –- June 2026 - Flipbook - Page 55
I N T E RV I E W
what the old structure of the deal was before
you requested a facility increase or a term
extension in case something goes awry with
that deal, when those scenarios happen, you
can get on with helping the borrower, doing the
diligence to make decisions.
“It’s a really exciting strategic choice to
work with us, but we want to provide the
comfort that we’re enabling people to do their
jobs better.
He adds: “Our team of software engineers
speak directly to our customers. We want
to do things quickly, with all the different
stakeholders in mind. It’s about taking that
broader view, consulting with businesses,
rather than just solving one problem.”
Raising future market standards
Across the UK economy, the realisation
has dawned that unexpected events and
confidence-shaking shocks are now the norm,
not the exception. Consumer and funder
confidence in the ability of specialist lenders to
withstand shocks is paramount.
Bridging and development lending have
traditionally been opaque, but the shift toward
transparency is only going to accelerate in light
of recent events. This means clear audit trails
as a market standard.
Fairhurst says: “A deal might be originated
today, and by the time it’s gone through
operational diligence, the market conditions
or circumstances at the funder, or the deal
structure, or something with the valuation,
change before the deal is drawn down.
“So, the audit trail is critical to the whole
piece. For all the different moving parts – to
see when the fee was adjusted, when there was
a down valuation, when the solicitor unearthed
something, when you clarified something from
the risk criteria, when the funds were drawn
down, but then something happened to the
project which affects the borrower’s ability to
pay back. The funders having a view on that
trail becomes absolutely critical.”
Mawdesley sees tech investment as a key
feature of the future of the specialist market,
suggesting that more funders will potentially
pull out of the market, with funding going
to a smaller pool of lenders that can show
that they are “on top of their data, their
systems, their treasury risk management and
operational controls.”
He adds: “Those are the ones that will
ultimately attract more and better funding, and
they will then have a competitive advantage
in our market. Technology is very much at the
centre of that.”
This greater engagement with tech does not
necessarily mean gleeful adoption of all the
latest trends. One of the biggest headlines is, of
course, artificial intelligence (AI), but Fairhurst
and Mawdesley are quick to confirm that this
will not solve all the market’s problems – and
certainly not without careful thought. One
again, they suggest taking evolution one step
at a time.
“What lenders should really do is carve out
individual use cases where a very specific,
trainable AI bot can go and add value,” says
Mawdesley. “If you then do it collectively
through your business end-to-end, that’s the
best way to leverage AI to drive value.
“Asking ChatGPT to plan your holiday is
very different to asking an AI tool to go and
digitise an end-to-end lending process in a very
complex market with lots of moving variables.
It’s just not achievable.”
For example, kennek uses AI to screen
enquiries and present communication
summaries, looking for key terms and
producing digestible information for an
audit trail.
Fairhurst says: “You can segment different
parts of the process.
“We’re currently doing work around
valuation analysis, as well as looking at postdrawdown processes, or for development
finance, handling changing business
circumstances or multiple site surveys.
“There are some really cool things that
you can do, but ultimately it takes a person
of acumen within that business to validate
that information. That’s not going to change
anytime soon.”
So, the human is here to stay, and the
AI revolution may have been overhyped.
Nevertheless, Fairhurst and Mawdesley both
look ahead to a very different world.
When considering what current processes
might be out of date in five years, Mawdesley
is quick to answer: “The valuations, the legal
process, and if a deal takes longer than 14 days,
I think there will be uproar.”
Fairhurst agrees: “How properties are
grouped and valued is going to change over the
next couple of years. Therefore, the monitoring
of your portfolio and the securities that you
have in your loan portfolio, where those assets
are regionally and so on, that’s going to change
quite dramatically.
“That will affect underwriting, it will affect
risk, it will affect valuation.”
The future, then, is faster, more transparent,
and grounded in data. Specialist finance is,
however, still very much a human business.
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