Loan Talk caught up with Mark Stevens, Managing Director of Provident Financial Group’s Consumer Credit Division to find out how he would improve education within the consumer credit sector.

What is your role at Provident Financial and what does it consist of?

I am the managing director of Provident Financial Group’s consumer credit division. I lead the consumer credit business which serves around one million customers through three different brands:  Provident, our home-collected credit business founded in 1880; Satsuma, our online short-term loans business; and glo, our guarantor loans business. The common theme across all three brands is financial inclusion and lending a hand when others won’t. 

What is your previous experience?

Nothing that prepared me fully for the exciting world of short-term, non-standard, unsecured lending! I began my career in strategic consultancy and then moved into private equity. When I finally got a ‘proper job’, it was in the mortgage market working at Bradford & Bingley and then Leeds Building Society, but I’ve also been privileged to hold the position of Chief Executive of Yorkshire Cancer Research between these two positions. It’s been a steep learning curve since I joined Provident in 2012 but we’ve made great progress thus far and there’s an exciting future ahead.

How would you say changes in consumer behaviour have impacted your industry in the last 12 months?

Changing consumer behaviour has very positively impacted our industry. In particular, customers are, rightly, becoming more demanding with their expectations of a smooth customer journey. While we have always been focused on delivering the best customer outcomes, the move to online and adoption of mobile technology has driven advances in our business to better service our customers’ wants and needs, while ensuring we remain a responsible lender.

What do you expect to be the biggest technology challenge for the business in the next 12 months?

We’ve been on a remarkable technology journey thus far. Five years ago, technology was an after-thought in a paper-based home credit business; now it is one of our biggest levers in terms of customer experience and financial performance across all our businesses. We have made huge strides in the last couple of years in driving a digital agenda into home credit and in launching our two online brands, Satsuma and glo. Our biggest challenge as we look ahead is prioritising the large number of initiatives that we want to launch to further improve customer experience and diversify our product proposition.

What do you think will be the biggest technology improvement in your industry in the next 12 months? 

Compared to some other sectors both within and outside financial services, I think there is still much to do in the short-term lending sector to create a digital eco-system for customers. If you look at mainstream banking, I use my mobile banking app with increasing regularity as its functionality improves. This has boosted the transparency and convenience of my basic banking needs. In the next 12 months, I would expect significant investment in mobile apps to likewise improve our interactions with our customers and be more flexible to their requirements.

What would you ban in the short-term credit market?

Late fees and default charges. Why kick someone when they are down? If people are having problems making their existing payments, how is it ethical to load them up with further debt? Our home credit business has always had a fixed cost of credit approach, and I am proud to say that Satsuma is the only large online lender with absolutely no late fees or default charges.

Do you think the short-term credit market is overcrowded and why?

It’s competitive, but not overcrowded. Customers certainly have plenty of choice, and, well-run businesses have an opportunity to build sustainable profits through responsible lending. From where we’re sitting, the balance feels about right.

What do you think there is a gap in the market for?

Line of credit products potentially fit the non-standard customer’s multiple borrowing needs better than concurrent loans. I would welcome more clarity on what propositions are acceptable under the regulatory regime.

What exciting developments do we expect to see from Provident Financial in the near future?

As a public company I have to be careful what I say outside of the normal City announcements. We have been pretty clear about the growth potential across all of the divisions of Provident Financial, which includes the Vanquis credit card business and the Moneybarn car finance business – both of which are leaders in their respective fields – in addition to the consumer credit brands.

How has Provident Financial grown in the past few years?

Around 10 years ago, the Group mainly comprised of the long-standing home credit business. Since then, the Vanquis credit card business has grown from a start-up to more than 1.4 million customers, we acquired Moneybarn in 2014, and we launched Satsuma in 2013 and glo in 2014.   As a result, the Group now has in excess of 2 million customers and entered the FTSE-100 in late 2015, with a current market cap of over £4b.

Do you think there needs to be more education around short-term credit?

Absolutely. Where do I start – this is my favourite topic! I find that customers in our sector tend to be very savvy. Our research shows that one in six people are denied access to mainstream credit, although they have the same needs to access credit as anyone else. Financial inclusion is at the heart of what we do. Our customers generally are good at budgeting, but sometimes need that helping hand when times are tight or they are hit by unexpected expenses, and we are proud to be on hand to assist them in these times. Our customer feedback scores speak for themselves with over 95% positive feedback – a rating high street banks would love to achieve.

Sometimes people who aren’t customers have the wrong perceptions of both our customer base and the lenders that help those customers. It’s important for our sector to engage and drive that education process rather than sit on the sidelines moaning about it.