Finance Connect Summer Conference: retreat or innovate?

More than 500 delegates attended Finance Connect’s summer conference for a packed day of insight and discussion on the key challenges facing the specialist lending industry – supporting economic growth; responding to growing regulatory pressures; leveraging technology; and developing the next generation of industry talent. Headline sponsored by Alfa, the event brought together asset, auto and equipment finance professionals united in their desire to build a resilient future.

Meanwhile, Archie Norman noted in his chair’s report for one of the UK’s biggest companies that “There has rarely in the history of M&S been a time where the regulatory environment has been less friendly to growth and investment.”

Against that background, Peck warned delegates of the stark choice facing the industry, between a “retreat to safer havens” – adopting a more cautious approach to risk, but potentially creating a “desert of innovation” – or finding ways to navigate an increasingly demanding lending landscape.

Listing the government’s initiatives to encourage economic growth since July 2024, Peck highlighted “more and more frequent state intervention, but no certainty about whether this will be effective.  The British Business Bank’s growth guarantee scheme is a big opportunity for the industry to seize, but there are pitfalls around state-based risk, not least that this option could crowd out commercial lenders who are not able to use this scheme.”

Plenaries

The opening plenary session explored these themes in more detail, as Kana Inagaki, automotive correspondent, Financial Times, interviewed David Betteley, FC’s auto finance community leader, Spencer Halil, managing director of Northbridge Finance, Auto Trader’s chief customer office Ian Plummer and consultant Andrew Bramweld about what comes next for the auto finance industry.

Disruptions to the supply chain caused by the ongoing Middle East crisis, the growing competition from China and an increased regulatory burden are weighing on a sector which is also having to respond to the demands of the FCA’s planned misselling redress scheme, and the consequent demands on resources and management time.

The impact of government intervention was further examined in the second plenary where the British Business Bank’s chief banking officer Reinald de Monchy sketched out its schemes for creating additional lending and access to finance for SMEs.

As Taylor explained, “BBB schemes enable a different type of additionality, such as taking the risk on soft assets which would be difficult to do with a guarantee.” In both sessions, the focus was on “planning to innovate to cope with demands”, in Plummer’s words, with Taylor suggesting the next phase of industry development was to address “finance declines” and drill down into how to shape a product to address these. 

Streams

The conference split into parallel sessions looking at auto, asset and technology developments. Wayne Gibbard, partner, Shoosmiths, set out the key operational concerns for lenders in implementing the FCA’s motor finance redress scheme, and led a discussion with industry experts on the areas of focus. Amanda Hulme, partner at TLT, provided an update on the proposed reforms of the Consumer Credit Act  1974 and how regulated lenders should prepare for changes.

The asset finance stream continued the focus on the SME market with an analysis of the growing trend for “loan stacking” whereby smaller companies take out multiple short term loans rather than look at asset finance options. Jim Higginbottom, NACFB CEO, identified this as a nuanced problem with many drivers, including SME pressure for speed of response, lack of awareness of how to access advice, and the role of incentives, all of which in his words act in a similar way to “the role of fast food in creating obesity”, and create a “collaborative obligation to fix.”

Equipment finance professionals attended sessions on the transition to green finance and how the technology equipment finance distribution chain is evolving, while the dedicated technology stream had a strong AI focus with sessions on how to move beyond the pilot stage; scaling AI decisions in credit and residual value; and the growing problem of AI use in organised fraud attempts. There was also an evidence session from Nivo on real-life projects using AI with tips on what works and what does not, while Tony Lynch of Carpass.ai provided a demonstration of how the AI voice is becoming the first point of contact in customer engaging, enhancing the customary chatbot experience with the addition of emotion and real time reaction.

Career progression

Alex McWilliams, head of brand and communications at Simply, led discussions looking at why when 82% of those in the industry would recommend it to others, almost half contemplate leaving at the mid-career stage. The findings suggest there is a training gap where content, rather than quality, is the issue, and identified four building blocks for better career progression: mentoring; community and peer-led learning; recognised credentials; and a visible programme for development.  

The afternoon included the regular Dragons Den session where five companies with innovative ideas presented to a panel of experts. The winner, chosen by the judges and the delegates’ votes, was Resistant AI, a real time fraud detection system capable of catching fake, tampered, or AI-generated documents in seconds.

David Betteley, seconded by Spencer Halil, argued in favour, citing the need to consider the industry’s long-term interests. Betteley warned against “poking the bear”, saying “redress may be painful, the figures are probably unfair, but it is a defined cost which closes the issue and restores investor confidence – an appeal creates uncertainty as to the outcome and could produce an even harsher intervention.”

On the other side, Roger Skinner and John Rees took the view that while the industry should “do the honourable thing” and compensate consumers who had suffered harm, the structure of the redress scheme was fundamentally flawed and should be challenged as an example of FCA overreach. “It uses a formulaic, hypothetical and speculative calculation” in Skinner’s words, which “creates a chasm between compensating for a proven loss and paying out for presumed harm or loss which may never have occurred.”

The opponents to the motion achieved the biggest audience sway of opinion, converting an original 50:50 vote taken at the beginning of the debate to a definitive 67% against by the end.

“There was a real buzz and excitement across all the sessions in all streams – auto, asset, equipment and technology – which underlined the importance of Finance Connect’s role as the independent voice in the market.”

“This year’s summer conference moved to a new venue at Kings Place, which has won awards for its advanced architectural design and strong environmental focus.It was a great location that enabled our continued growth and was able to facilitate expert presentations and panel discussion sessions combined with opportunities for delegates to network and meet exhibitors.”