Enormous opportunities for brokers, says new Platform Finance CEO
Australia’s asset finance sector is on an upward trajectory – and there are two key themes that have emerged: rapidly shifting customer requirements and the explosion of new funding options. The upshot is, there are even more opportunities for brokers, says Ryan Young, the recently appointed CEO of Platform Finance, Australia’s leading asset finance aggregator.
Young’s comments come after Platform Finance’s parent company, COG Financial Services Limited (ASX:COG) reported a record year in settlements, with broker partners writing $5.1 billion in asset finance in FY21. Platform Finance experienced a 27% increase in settlements, with commercial volume increasing by 18% and consumer volume growing a massive 62%.
“We have seen strong growth in core markets including transport, construction, trades and farming, which have continued activity throughout the pandemic,” says Young, who has more than 15 years’ experience in the asset finance sector. “Equally, there has been a huge increase in consumer financing – from new cars to caravans, horse floats to boats, home renovations to extensions. Not only that, but new tools and platforms are changing the playing field. To stay ahead of the curve, it’s crucial for brokers to have access to all the tools and products, so they can meet all of their customers’ demands. We’re here to help them navigate the maze and capitalise on the changes.”
Platform Finance’s growth is largely a result of its diversification during the pandemic – and its lender panel has helped the company achieve that, adds Young.
“We have the scale and ability to sustain a large number of funders,” he says.
“It’s obviously difficult to predict where demand will come from, particularly because of lockdowns, restrictions and other variables. However, we’re able to be versatile because we have the most diverse product offering – including commercial asset finance, consumer asset finance, personal loans, novated leases, even a car buying service – and the biggest processing team to help brokers in areas where they might not have the capability.”
Broker expertise key to leveraging high demand
Ultimately, Young says, brokers helped drive Platform Finance’s strong results.
“We work hard to give them the tools to be successful, but in the end, it comes down to their skills and, over the past 18 months, their resilience and drive to keep delivering in some pretty challenging circumstances. The sector is rapidly evolving, especially with new funders entering the market as traditional lenders reduce their exposure and become less flexible. New sources of funding are vital to meet diverse customer needs.”
Two key asset finance themes that will allow brokers to scale to marketplace opportunities:
1. New funders, disruptors, and innovative solutions
“There’s an extraordinary number of funders in the market at present,” says Young. “And although there has been some consolidation recently, I think the growth will continue. To help our brokers keep track of all the funders and ensure they have the scope to deliver all the funders to their clients, Platform Finance is providing them with efficient tools. We’re fortunate that we have the largest scale in the market, meaning we can deliver the broadest suite of funders to our brokers.”
Young says that over the past two years, funders have become“a lot more specific in their appetites” particularly as a result of the Royal Commission and the declaration of the pandemic.
“They’ve become a lot less flexible for customers that don’t tick every single box. Which is why brokers need a much wider spread of funders. A major trend is the re-emergence of finance companies – and they have a very important role to play,”
he says, pointing to two new entrants into the market as a great example:
• MoneyMe, which recently partnered with Platform Finance to offer its Autopay vehicle financing solution to brokers; and
• Non-bank fintech lender, Moneytech Finance, which will bring a wide spread of products – including its small business line-of-credit solution – to Platform Finance’s brokers across the country.
“Autopay and Moneytech are examples of finance companies finding gaps in the market. They’re innovative solutions and will open up more options for our brokers; they’ll be able to compete more in the dealer finance space, and more in traditional banking areas like working capital, trade and import. We would expect that as funders bring more disruptive products to the market, we could grant our brokers first access to them,” says Young.
Today, Platform Finance has over 40 lenders on its panel.
“Over the past year, brokers have, on average, used around six different funders, with others using up to 20. Brokers have always shopped around, but in the past, they could use three or four funders to settle 90 per cent of their deals. Now there’s even greater choice, which is why it’s vital for brokers to have the right partners in place,” Young says.
To help brokers keep up to date with new funders and new products, Platform Finance has a number of systems and processes in place including:
• an intranet and mobile app for its broker network (Broker Central), which houses information on all the funders on panel
• weekly updates on policy changes
• webinars, which provide new and existing funders with a platform to convey key messages and information on new products.
2. Greater need for compliance awareness
Young’s vast experience in risk and compliance has taught him that a strong understanding of compliance can give brokers the edge.
“We know we have to keep investing in the space and we have dedicated team members – lawyers and compliance specialists – to keep track of the ongoing compliance changes. Our aim is to have the best compliance program in the market, and I don’t mean the most rigorous or over engineered. It’s about having a program that meets the letter and the spirit of the law in the most efficient, customer-friendly manner possible. We’ll invest more in this and help brokers navigate the maze,” he says.
“We don’t know what the rules will be in 2-5 years’ time, but we do know they’ll keep changing. A key focus for Platform Finance has been to equip brokers with the tools to deal with whatever comes up – and automating compliance with our Connect CRM is one of these tools. Platform Connect is designed to assist brokers meet their compliance obligations and provide a competitive advantage, in terms of doing it the best way possible. There’s no grey area now.”
Read more on Platform’s recent FY21 Result announcement on The Adviser Magazine here.