Credit Savvy’s Managing Director speaks to FST Media about how banking incumbents can learn from fintechs to be more nimble and agile.

FST Media: What are your key priorities over the next 12 to 18 months?

Hofman: We have a number of key priorities for the next 12 to 18 months. Firstly, we want to help Australians understand the importance of monitoring and managing their credit reputation – it’s still a fairly new concept in the Australian market.

Increasing awareness surrounding credit scores and what constitutes good credit behaviour, as well as smart ways to leverage your scores is one of our key aims, and we want to be able to get that message across to the Australian consumers.

We also want to grow our membership base, which is important for our business, and we are currently growing by a few thousand members every week. When it comes to digital, we want to continue to have our offering available on our website. We give people free credit scores today and when more data becomes available to be shared between the banks, we just want to make sure that this information is conveyed in a useful way for our members so that they can make sense of it. That is going to be quite a major change in the data that the banks now can use to make credit decisions.

Lastly, we are focusing on deepening our partnerships with product providers and helping them to understand our capabilities as a distribution partner. We want to make sure that we have a good representation of providers that customers like to deal with; providers that people can access and that have good rates on our panel. Despite being owned by CBA and Aussie Home Loans, we do business with all major players and we are not restricted to just Australian brokers or CBA products. However, we need to also understand their challenges and how we can help them.

FST Media: What are your thoughts on the rise of peer-to-peer (P2P) lenders like RateSetter, SocietyOne, MoneyPlace and their intelligent use of data?

Hofman: If you take the consumers’ point of view, we welcome their rise and it means there are more options available to consumers – particularly those consumers that look after their credit score and manage their credit reputation properly. P2P lenders allow these consumers to take advantage of better rates. The next consideration is that if they can make it easier for consumers to do business with them, in addition to offering them competitive rates, then they are definitely a threat to the incumbents.  

However, if we look at this from the perspective of data, you would expect that the incumbent banks would be in an equally strong position to use the data that they have on their customers intelligently as well. What that means for consumers and whether they will live up to that promise, only the future will tell. Overall, the rise of P2P lenders is good for consumers – it gives them more choice and access to lower rates which is a positive.

FST Media: How can banking incumbents learn from fintechs to be more nimble and agile?

Hofman: Banking incumbents are in a difficult position as finance is highly regulated. Both banks as well as fintechs need to be responsible for how they do their business and how they run their operations. However, there are lessons to be learned from this new breed of fintechs. Overall, it comes down to company culture and fostering an agile culture – not just for the technology team, but across the whole organisation.

If you look at what the fintechs generally show, there is a sense of urgency, energy, excitement and purpose, and I think even the banks in their current operating environment would benefit from those traits as well. The key lesson for banks is getting that sense of urgency, energy and purpose which is something that you generally see in the smaller startups, but it is a real challenge for major banks. 

FST Media: What is the ‘holy grail’ that is yet to be delivered in financial services?

Hofman: For me, the ‘holy grail’ in financial services is the promise of how data can be used effectively. And, I think that’s still yet to be fulfilled in the Australian financial services industry. There are some inroads being made but through consumers’ eyes, if I look at my bank, I expect my provider to know me given that they have so much data on me. As a customer, when I wish to take out a card or loan, I expect them to act on this data and act on this information. I want them to make it easier for me to get this product, recognise that I am a customer, together with my loyalty and my history, and lastly I want to be rewarded for my good credit behaviour.  

Taking these insights into account, which are driven by data, we will increasingly see the emergence of new business models in financial services which is great for consumers if they decide to embrace it. However, I think we still have an unfulfilled promise of actually leveraging the data banks have on me as a consumer and that’s a real challenge for them.

FST Media: What does disruption mean to you?

Hofman: I think disruption is basically about making things better for consumers. In our case, it’s about giving people easy access and immediate access to something that they don’t have to pay for. It’s a free service and I believe that is in itself disruptive. Ultimately, the user will decide what they like to use, but here at Credit Savvy we are offering something that is better for consumers. We are empowering consumers with this credit information, allowing them to negotiate with credit providers and understand how the data’s being used. At the end of the day, we are very much focused on what’s good for consumers and that’s our key driver.

FST Media: How do you encourage a culture of innovation in your team?

Hofman: Innovation is about having the right people in the team with the right attitude; that’s essential. If you look at our office, we have an open office environment where everyone can contribute ideas, and if we have any issues we share them around.

Innovation can come from anywhere, whatever your role is in the team, and we strongly encourage that. If you look at our development sprints, we also have short sprint cycles and decisioning lines and we make sure that anything that we agree on, as an action item, is implemented relatively quickly. For a young business, this is essential, and over the next 12 to 18 months whilst we shape our business, we know it’s highly likely we’ll need to correct our course. However, this is just a challenge that comes with the territory we’re in. As a relatively small organisational team, you can still make those adjustments quickly, however once you grow it becomes a different challenge.

FST Media: Every leader has a legacy that they wish to be remembered for. What is yours?

Hofman: I enjoy challenging the status quo and linked to this is the notion that by breaking down the old structures, we will be able to contribute to the greater good. With regards to the legacy I wish to be remembered for, that’s an important aspect for me.