Andy Fisher, Aro’s chief growth officer, reveals the main growth areas for the business over the next 12 to 24 months, and explains how Aro Mortgages is educating lenders about Open Banking.
1. Describe your role at Aro – what does chief growth officer entail?
I’m responsible for implementing strategic growth initiatives across the company. The board will come up with the growth strategies we want to deploy for a given period of time and a key function of my role is making sure those strategic initiatives are implemented across multiple teams, multiple departments, and that the same end goal is being worked towards by everybody.
We have a marketplace comprised of over 120 lenders, but there are always new entrants coming into the market. The credit risk, conduct risk, and social risk appetites of lenders are shifting all the time. So, a real key function of my role is to make sure that we know what those shifts are, and that we have the most optimised lending panel for our customer base.
2. What are the main growth areas for Aro that you have identified over the coming 12 to 24 months, and beyond?
We have Aro, and Aro Mortgages. Aro is a data driven financial services marketplace, so it has one set of growth initiatives and its own strategy. Aro Mortgages is a regulated second charge mortgage broker, which has a different set of strategic growth objectives and initiatives. There is some commonality, as you can imagine, but I’ll talk about Aro (the marketplace) for the moment.
We’ve changed strategy in the last 12 months – we’ve gone from being a direct-to-consumer-led organisation, to being solely focused on B2B partnerships. Most of our growth is going to come from B2B partnership wins and working with existing partners to identify growth opportunities. We need to constantly improve the customer experience to increase conversion, and to increase stickiness. The Amazon one-click checkout has set the bar quite high. Whether we can get to that digital journey, while still adhering to all of our regulatory and social responsibilities that come with working within financial services, and making sure that people aren’t making ill-informed decisions around their finances, is yet to be seen.
We recently invested in a data science capability, so we now have a data science team comprised of different backgrounds and experiences. What they’re unearthing is a whole host of actionable data insights – and we use that language quite deliberately, it has to be actionable insights rather than just data for data’s sake. All those actions lean towards generating better customer outcomes. So, this is around identifying cohorts of customers that may not be receiving an offer at this moment in time. Can we identify an existing lender that would write a new product for those customers, or is there a lender not currently on our marketplace that should be?
We’re also looking at new data sources available to aid lenders’ decision-making capabilities around their confidence to lend to a customer or not. The one that lots of people talk about is Open Banking. Traditionally, lending decisions are based upon credit reference agency (CRA) data, and there is a very positive move towards Open Banking. It’s not about moving from one data source to another. It’s about bringing in a secondary data source that risk departments and risk officers can use to base lending decisions on, and keeping the customer experience as smooth and as digital as possible.
3. How is Aro Mortgages bringing the second charge market on the Open Banking journey? Is there appetite and interest?
There are lenders at different stages of either their understanding of, or their awareness about Open Banking and what Open Banking can do positively. New entrants coming into the market with no legacy tech or systems or process, they will launch with Open Banking products. Existing lenders will have to adopt Open Banking into their existing processes, which is a greater challenge than launching from scratch with Open Banking.
There’s a journey they’ve all got to go on. What’s different in the second charge mortgage market is it’s 95% intermediated. No lender has a direct-to-consumer proposition at scale, so it isn’t just lenders that need to embrace and adopt Open Banking, it’s the brokers and the intermediaries. So, I would say it is at its infancy in terms of being a mainstay in credit policy decision making for second charge.
Recently, we invited all second charge lenders to our investor’s offices in London. We had Equifax in the room, and we had a two to three-hour session talking about Open Banking and how, as a data set, it can drive product innovation and grow the market.
4. What are your plans for growing and expanding Aro’s existing B2B partnerships?
We have to make sure that our objectives are aligned to our partners’ objectives, and that we have stakeholder engagement across both organisations. There are some partnerships that are in growth, and some that are finding their footing and, strategically, they’re not always at the same point.
It’s about building and agreeing strategic roadmaps with each individual partner, establishing what’s important to them and how Aro, as a marketplace, can aid their own brand ambitions.
5. Aro recently underwent a rebrand, from Freedom Finance to Aro, so what is the thinking behind this? And why now?
Freedom Finance, as a brand, has been around for around 30 years. The way people thought about Freedom Finance is as a traditional secured loan broker that deals with declined customers.
We wanted to freshen it up because, with the new brand is a new strategy. And the new strategy is a B2B-led growth strategy, as opposed to direct-to-consumer.
Whenever we were out talking to people – our customers, partners, investors – and asked them to think about Freedom Finance, it felt quite subprime, manual and like a decline-based business. Whereas what we are is a really sophisticated, data driven technology business that deals with some of the most high-profile blue chip brands in the UK.