Bricks and mortar finance is on the decline.
Fintech has formed a number of digital only financial platforms such as TransferWise and Azimo which are disrupting Western Union and other high street brands, and with the launch of online-only banks around the corner, stopping by your local bank branch could become a thing of the past in the coming years.
You’d be forgiven, then, for thinking that a profitable financial business in the 21st century should be an online-first business with the minimum number of physical parts.
Well, not just yet anyway. Paul Aitken, CEO and founder of alternative lending platform Borro says:
“Some people think fintech means that you should engage with the client directly and everything should be online, and I think that works for businesses that are in high-volume transactions and low value.”
Borro is a lending platform that lets borrowers gain finance against the value of luxury assets. As of September 2015, Borro are also moving into the residential property loan market. Aitken says that there’s still a value in the physical aspects of business:
“If you look at the growth of businesses like Lending Club in the US, where they really took off was when they worked out that direct mail was important, and that is a really important part of what they’re doing.
“The fintech element of the business is that they’ve got a technology platform that enables them to serve clients very quickly and to underwrite clients in a unique way.”
While tech is obviously important to Borro, it’s not 100% of what makes the business tick over.
Borro is a “tech enabled business rather than a tech only business”.
While the current is definitely flowing towards the simplicity and convenience of internet-based transactions, for the time being there is still a value in having a physical presence in finance.
At the end of the day, finance is about building trust with consumers, and business of all kinds are trying to build that trust in any way that they can, whether it’s direct mail, or personalized online experiences.
If physical attributes help to build trust, they’ll always have a place in the financial world.
To hear more about Borro’s tech enabled business, watch the video above.