Lender Morses Club has unveiled ambitious plans to attract new customers currently underserved by mainstream lenders.
The Leeds-based home credit business, which successfully floated 18 months ago, reported a 46 per cent leap in first half profits this year growing customer numbers to 233,000.
However now the business is setting its sights beyond doorstep lending, looking to provide banking services to the estimated 10 million people in the UK who lie on the fringe of being able to access mainstream lending.
Morses chief executive Paul Smith told The Yorkshire Post: “It’s our diversification policy that is going to be key to growing the business.
“The direction of travel that we have been going down is for the last couple of years to introduce our customers, and perspective customers for the future, the none-home collect credit folks, into card based services using a Visa card partner, who has an emoney banking licence. We are going to unlock the sort code and account number and then invite people to use that as a bank account.”
The move is enabled by the introduction of the Second Payment Services Directive (PSD2) in January which is designed to allow greater competition in the payments industry.
Mr Smith said: “With the customer’s permission it unlocks a great deal of the data about where the banks have been making their profits on you as an individual customer.
“You might be sitting there thinking, ‘I do not pay for my bank account’. But through PSD2 you will be able to engage and see how people have been making money through you. It could be that in the last year you have paid £300 for your free bank account. And you will be able to see not only what it has cost you but also a whole bunch of alternatives that are much, much cheaper than what you are currently paying for your bank.”
Mr Smith said the Morses brand would allow them to reach a large pool of customers.
“We are looking at low cost distribution in that we are already a known brand with lots of customers in a space that is largely underserved by banks. It does not mean to say our customers don’t have bank accounts but the banks underserved them on the basis that they don’t make enough money out of then. When we have added in the rest of our road map I believe we will be truly unique in the market.
“We want to wrap around price comparison services in their own right using the same technology platform. Third party partners use us for loans, potentially may use us for banking but also as a collective we can recommend to you different deals on your utilities and essential services which will be cheaper than the ones you use at the moment.”
The travails of competitor Provident Financial have helped boost customer staffing numbers, with Morses having hired approximately 650 former Provident workers.
Morses also launched dot dot loans, an online brand.
Mr Smith said that investment in digital technology for its agents had saved an estimated £800,000 a year in paperwork.
He also had praise for the Yorkshire region as a place to do business.
“It is pretty well linked.
“The talent pool in Leeds for financial services is extremely well developed.”