Finsure co-founder and MD John Kolenda reveals how the group is turning data into a performance driver
Only months ago, big data was enjoying its time in the limelight.
After years of scholarly papers, seminars and tech advances the business world was finally coming to terms with the fact that not only is data everywhere but it has commercial value.
However, big data has a severe limitation – it is the story of what has already happened.
To be truly successful in business today, the trick is to know what will happen next and predict the solution that outcome will demand.
At Finsure, that isn’t just the goal, it is the next breakthrough, and it is already a reality.
Before the end of this calendar year, the aggregator famously built “by brokers for brokers” will roll out Infynity, its new, marketleading CRM that is set to redefine how and why brokers engage with their clients.
“The launch of Infynity is key to our plans for 2019.
This new system is built on the basis of predicting customer behaviour before it happens,” says Finsure Group co-founder and managing director John Kolenda.
“The other thing we are doing is integrating it with social media so the system will create a centralised area for all customer interactions. It’s a really insightful system that we can’t wait to roll out to our network.”
Infynity is just one element of how Finsure will support its brokers to ensure good customer outcomes are delivered.
The award-winning aggregator enjoyed a seminal year in 2018, hitting a number of new milestones.
Firstly, broker network numbers enjoyed a 20% year-on-year boost as Finsure recruited its 1,500th broker.
The client base also grew to 60,000 customers under management, and in November the aggregation loan book reached record values of $34bn, an increase of 26% on the previous corresponding period.
This followed 71.6% growth in revenue during the 2017–18 financial year.
To top it all off, Finsure took the coveted first place in MPA’s Brokers on Aggregators survey.
But that’s not to say it was a walk in the park.
“When it comes down to it, the aggregator that can maintain the strongest offering across all services will be the one that succeeds” John Kolenda, co-founder and MD, Finsure Group
“While Finsure was proud to be a high achiever and receive many industry plaudits, we also focused on helping brokers deal with the increasingly complex and challenging regulatory and lending landscape,” Kolenda says.
“The current lending market is the most complex I have experienced in more than 25 years in the industry.”
In Kolenda’s words, Finsure has dedicated “a large amount of resources” to broker education and training programs to ensure its network is ahead of the market’s demanding regulatory changes in the post-Hayne environment.
The debut of Infynity is just one of the support mechanisms that will be rolled out over the coming months, with Finsure pledging an additional focus on expanding its offering, activities and member value proposition, too.
“Our main goal in 2019 is to continue to grow our service offering but ensure it is done sustainably and without compromising the high levels of service we provide to our existing brokers,” Kolenda says.
Rising to the challenge
When it comes to Finsure’s recent successes, its broker network, loan book and customer growth targets are only half the story.
Dominating headlines in September last year, Finsure created a first-of-its-kind business model through its acquisition of Goldfields Money Limited – an “obvious highlight”, Kolenda says.
“In the past, banks have typically acquired aggregators, but this is the first time a bank and an aggregator have merged.
The two companies coming together will provide benefits to both brokers and customers,” says Goldfields’ executive director and CEO, Simon Lyons.
Unlike other mergers, this is a meeting of minds as much as might.
Financial stability and scale aside, the merger has created what Kolenda and Lyons term “Australia’s first truly scalable digital challenger bank”, with a market-leading digital platform designed to give brokers and their customers greater choice.
The resulting entity is focused on providing lending solutions via broker distribution, and it brings the proposition to the banking world at a time when the majors and regulators appear to be doing all they can to push third party distribution out of the equation.
The idea is to combine Finsure’s 1,500-strong broker distribution network with a suite of world-class products, including home loans, personal loans, transaction accounts and deposits.
“Together we’re creating a new force in digital banking,” Lyons says.
“The Finsure distribution network was one of the really attractive aspects when we were looking to merge. They provide a low-cost and scalable means of distributing our loans. We are perfectly positioned to manufacture products specifically for Finsure brokers that will allow them to provide lending solutions for their customers that they may not be able to get elsewhere.”
The debut of this new model fills a number of gaps in the market.
For example, Finsure brokers can leverage one such product to borrow against their trail and invest in their business, with the terms of such a loan being tied to the individual broker’s long-term performance with Finsure.
Another opportunity involves “plugging the gap” in interest-only and investor loans. However, the real point of difference moves well beyond home loans to redefine banking itself.
In this respect a partnership with blockchainbased solutions provider IvyKoin will commercialise the use of blockchain technology in banking to validate and legitimise digital currency without the need for the traditional banking framework.
“This is an area traditional banks have struggled with; however, it’s yet another example of how the new model will shake up the banking sector,” Lyons explains.
New tools and business partners aside, there are many other challenges facing the industry, and in pledging to support its network through these, Finsure is actively evolving the role of the aggregator. “When it comes down to it, the aggregator that can maintain the strongest offering across all services will be the one that succeeds in this market,” Kolenda says, and his words ring true for brokers too.
Diversification will take on new meaning and urgency over the coming 15 months, but it isn’t just about brokers protecting their income and revenue streams; it’s about meeting direct demand from an always-connected market in which the consumer expects multiple solutions under one roof.
“This presents brokers with a great opportunity to enhance profitability, and should lead to them looking for a greater share of the wallet in cross-selling or referring other services such as insurance, wealth and investment,” Kolenda says.
Partnerships will also gain importance as the maturation of the online space increases the pressure on single-broker operators. In order to compete with the large internet lenders, brokers must depend on aggregators and third party providers, and must therefore select partners that support them in both competing and excelling.
Following on from this, Kolenda advises that technology should be approached as an automation tool, with a view to freeing up the broker’s time to explore new revenue opportunities.
“Use technology to your advantage,” Kolenda says.
“Those brokers that embrace change, use technology to their advantage and sell a diversified suite of products will be the ones that come out on top.”