Driving growth in asset finance through strong relationships

AFC leadership interview with Glen Christie-MacAllan, Head of Asset Finance at Cambridge & Counties Bank

In the ever-evolving asset finance industry, the ability to adapt and foster strong relationships has become a cornerstone of success.

At the heart of CCB’s business strategy is a commitment to brokers as essential partners, ensuring that customers’ needs remain central to every decision.

Industry growth and market trends

The asset finance sector has experienced significant growth in recent years, driven by global shifts and the changing needs of small and medium-sized enterprises (SMEs).

According to Christie-MacAllan, businesses are seeking new assets in response to environmental standards, after years of extending the lifespan of their current assets amid uncertainty stemming from the COVID-19 pandemic and geopolitical tensions, such as the war in Ukraine.

While sustainability is a key driver for industry growth, it also brings challenges. As businesses transition to greener technologies, questions surrounding the residual value of electric vehicles (EVs) and other new assets remain.

Christie-MacAllan notes that while CCB is committed to supporting green finance, the bank remains careful, prioritising a thorough understanding of these assets to provide tailored solutions. In addition to sustainability, technology is increasingly shaping the future of asset finance. While the sector has been slower to embrace digital advancements.

However, he stresses that asset finance cannot rely solely on technology. “Underwriting is an art, not a science,” he says, emphasizing the importance of human expertise in complex transactions.

Customer and broker service expectations

Strong relationships with both customers and brokers are pivotal to CCB’s business model. “The ability to have actual conversations with brokers and customers is absolutely critical, especially in these uncertain times,” Christie-MacAllan emphasises. While technology handles a significant portion of routine transactions, personal interaction remains vital for high-value and complex deals.

At CCB, brokers are viewed not just as intermediaries, but as valued partners. The bank maintains a select group of brokers, fostering close collaboration and trust. This allows CCB to understand the unique needs of brokers and customers, enabling the delivery of personalised solutions. Christie-MacAllan believes that these deep relationships set CCB apart in the competitive asset finance landscape.

Moreover, CCB takes a proactive approach to feedback, favouring qualitative input gathered through direct conversations over formal surveys. This feedback loop ensures continuous improvement in services and maintains high levels of customer and broker satisfaction.

Strategy with brokers and commission

Despite growing competition and increasing regulatory pressures, Christie-MacAllan sees a bright future for brokers. As asset finance becomes more complex, brokers’ expertise in understanding the intricacies of various lenders’ underwriting processes becomes invaluable.

He predicts that while automation will handle simpler transactions, the role of brokers in high-touch, complex deals will only grow in importance.

In recent years, brokers have also evolved from sales-focused intermediaries into business owners, a trend Christie-MacAllan views positively. Their long-term commitment to the industry is demonstrated through investments in their own balance sheets. This shift aligns with broader industry movements toward transparency and trust-based relationships between brokers and lenders.

CCB’s approach to commission is similarly transparent. The complexity of a transaction, rather than its size, dictates commission levels.

Christie-MacAllan is clear that brokers deserve fair compensation for their expertise, particularly in unregulated spaces where the focus is on achieving the best customer outcomes. “We are as open as possible with our brokers, and we expect the same from them,” he notes, ensuring straightforward, mutually beneficial partnerships.

Regulation and risk management

Navigating the regulatory landscape is another challenge in the asset finance sector. Christie-MacAllan is confident in CCB’s customer-first philosophy, which prioritises treating customers as they would want to be treated. This approach helps the bank stay ahead of regulatory requirements, ensuring consistent delivery of the best outcomes for clients in line with the expectations that are synonymous with Consumer Duty and the Lending Standards Board (LSB). CCB is currently working towards LSB accreditation for across both AF and it real-estate finance (REF) business.

Risk management is a critical part of CCB’s strategy, particularly as the bank expands into new asset categories. Understanding both the asset and its relevance to the customer’s business is central to managing risk effectively. As Christie-MacAllan points out, “If you’re lending money on something you don’t understand, you should expect to get burned.”

Looking ahead: Strategy and vision

In its 2023 results, published in May, Cambridge & Counties Bank registered its highest ever level of gross new lending in 2023 at £328 million, up 6% year-on-year. In particular, the bank’s fast-growing asset finance business experienced record customer drawdowns and net book growth, with exposures up 17%. And Cambridge & Counties Bank is poised for further growth and transformation.

The bank recently expanded its focus to include a new business line which has been set up to provide dedicated finance solutions for lending values of up to £150,000 and has opened a new asset finance office in Reading to serve this market.

By investing in increased automation and bringing in experienced talent, such as Matthew McDermott, a new head of credit – asset finance, CCB is enhancing its operational efficiency while maintaining the personalised service that sets it apart.

Looking to the future, Christie-MacAllan envisions deeper relationships with existing brokers, rather than expanding the broker network. This strategy allows CCB to maintain service quality and develop niche expertise in areas like vintage sports cars. Sustainability will also play a growing role, building on the bank’s B-Corp certification, achieved in 2023.

Ultimately, CCB’s asset finance strategy is rooted in transparency, relationships, and a deep understanding of assets, underscoring the bank’s commitment to the asset finance market, their brokers and customers.

“Asset finance continues to grow in importance to many UK businesses during these uncertain times, and we continue to invest in our own team and market proposition to meet this strong demand servicing our valued business partners and customers,” Christie-MacAllan concludes.

His vision for the future combines innovation with a strong foundation in human expertise, ensuring CCB remains a trusted partner in the rapidly changing asset finance landscape.