Yorkshire Bank is set to launch a new product which will reduce the amount of time it takes to process finance applications from the SME sector from weeks to hours, The Yorkshire Post can reveal.
The deal with Ezbob will see Yorkshire Bank use its own algorithms for assessing the loans as well as its own credit and pricing, while utilising Ezbob’s technology, to bring down the application process from as much as two weeks to less than 24 hours.
Speaking exclusively to The Yorkshire Post during a visit to the region, the bank’s chief executive David Duffy said: “It is old and new but keeping both and not replacing old with new. That balance is very important.
“We are really creating a bank which is ready to adapt to the future and the really exciting part to start that with is this fintech.
“We looked at providers that are within this SME space because that is our core, that is what we like to do best. We looked at how to best to serve our northern environment. We talked to people and asked what is it that you want?
“They all talked about being underserved and lack of convenience. We recently saw data showing 40 per cent of SMEs were funding investment off a credit card, which is staggering.”
The new platform mens that in some cases SMEs will be able to access finance in the region of between £10,000 and £50,000 in less than 10 minutes. Describing the SME sector as that which “drives the economy” Mr Duffy said it was vital for the bank that it served them in the best way possible.
“What is interesting about this is an underserved population, with 40 per cent doing credit cards [for finance], that we have a solution, nationally, of the Yorkshire Bank brand. It is a digital solution, anyone can use it. It is very exciting and is the first of its kind in the UK.”
Mr Duffy added that he did not see the new service as being a replacement of the traditional pathway to finance, saying that the preexisting application process would remain active.
“This is not instead of, it is supportive of the relationship,” he said.
“We will play on our heritage, look at our strengths and then give this technology as an additional tool.”
Gavin Opperman, group customer banking director for CYBG, added: “We take probably about two weeks on a nominal small loan. That is just because of the way we underwrite and documentation we require for it. It is cumbersome and it served the banks well. But you are not talking about 24 hours before somebody will have the money in their account. That is the speed we need to support people who have good businesses.”
He added that he saw the offering as the evolution of banking away from regions which had caused issues for the sector in the past.
“We became pawn shops,” he said. “We were just lending against security. Customer behaviour started to say ‘I will use any vehicle to get finance’ and that is when we started doing an injustice the to the businesses, because the cash flow cannot handle it. The idea of a one-size bank that fits all? Those days are gone. That is why I am really excited about this offering.” The new offering goes live later this month.
Mr Duffy also predicted that the economy of the north of England was set to grow more strongly than the rest of the UK over the next two decades.
Mr Duffy said the small business sector in particular as being the driver of economic activity and that this sector was best placed to deal with any Brexit fall out.
He said: “We think that the north for next 20 years will probably grow much better than the rest of the UK. We will be the bank of the north, there is no doubt about it, and it is based on a heritage franchise in Yorkshire.”
He added: “We want people to stop thinking about the south. The south is not our issue. We are in the north, and the north is a growth area.
“SME is what drives the economy, full stop. And I think when you have Brexit consequences, good or bad, you will see small business running very hard.”