The ‘new’ Barclays Partner Finance means serious business, reports Fred Crawley.

A year after completing monumental changes in office location, systems and company organisation, Barclays Partner Finance (BPF) has emerged as a serious contender for the top spot in the motor finance market.

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While BPF looks different to its competitors in many ways – it does not yet have HP, PCP or wholesale finance offerings, and runs a non-motor retail finance portfolio as large as its motor finance business – it is just the same as any of them in its hunger to pick up and develop dealer relationships.

The "new" BPF can be said to have emerged in June 2010, a month which saw a number of milestone changes to the business.

These included a move of its main office from Glasgow to Cardiff; the implementation of a brand new origination system; and a new credit decisioning system.

Arriving just after these changes, in September 2010, was managing director Ronnie Denholm, a man bringing with him the experience of a career spent in the cards and payments industry.

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After qualifying as a chartered accountant in Scotland, Denholm decided after two months that the job was not for him and joined American Express, where he worked for 20 years.

Mandate for growth

Having moved to BPF from US-based Harbor Payments, Denholm’s objective was clear: to execute a mandate for growth set by Global Business Solutions, the division of the Barclays empire encompassing BPF’s immediate parent Barclaycard.

Denholm explains: "Barclaycard, the leading consumer lending business in the UK, has an increasing appetite for B2B business, and Global Business Solutions sees BPF as a crucial part of its B2B capability in the UK."

BPF has seen growth even through its reorganisation, with headcount increased throughout the changes undergone, and a drive underway to increase its sales force by 20%.

It is now estimated to lend in the region of half a billion pounds in motor finance every year, with as much business written again in BPF’s non-motor retail portfolio.

"We are still babies compared to some of the players in the market, having written our first motor loan in 2003" says Denholm, "but we are learning fast.

"We are on a clear journey – we will finish gathering the building blocks we need in terms of products, capabilities and service offerings, and then go for our growth ambitions – namely, we want to become the leading point of sale provider in the UK."

In a proviso that is common to many ambitious motor lenders, Denholm explains that he does not equate "leading" to "biggest", although it seems that BPF’s aspirations lie towards outgrowing the middle market and entering the same level of scale as the market’s leading giants.

"In terms of our growth ambitions, it’s fair to say we’re not constrained," he adds. "The market is a smaller pond. We have a growing market share, but we still have a way to go."

 

A pleasure to work with

Denholm continues: "We do not necessarily want to take the leading position in terms of sales volume, loan book size, or highest yield – what we want to achieve is the highest level of customer and client satisfaction.

"Products and capabilities that make our business efficient, effective and a pleasure to work with."

It is hard to find a lender that doesn’t make lofty claims about striving for customer satisfaction, but Denholm is quick to back up this focus with a sound rationale.

"In terms of the value we provide, what can I change?" he says.

"It is hard to change the number of consumers in the market, the percentage of proposals we underwrite, or the yield on the business we do underwrite.

"What I can change more easily is the number of client relationships we have, and the propensity of those clients to propose to us rather than to others.

"This is not best achieved through lowering price – anyone can do that, and buy market share for a while, but that won’t last long without the right products and capabilities, and consistency of service."

BPF’s product offering is an area of intense internal discussion for the company – at present, all business written is in the form of personal loans, with no secured products such as HP and PCP being offered, although it is understood that an HP product may be under development.

The company is also currently evaluating an entry into the stocking finance market, with the understanding that a wholesale offering would boost dealers’ propensity to make finance proposals to BPF.

"I would love to pretend we’re ready with our core offering, but we are not – there is still a lot to work out," Denholm confesses.

 

Retail finance experience

In terms of BPF’s developing service provision, the company is bringing to bear ideas developed through its retail finance experience, such as digital signatures and paperless sales processing.

While Denholm expects that full implementation of a paperless system could take more than a year, he is optimistic that it will routinely allow payout within the same day as proposal, and massively aid compliance in the forecourt sales process.

Another service priority for BPF is having more salespeople out in the field and meeting clients face to face. This strategy has been supported by the development of a dedicated hotline based in Cardiff, which takes on a large part of the admin burden of the sales process in order to maximise the time BPF’s reps can spend with existing and prospective clients.

Asked what underlays his company’s service philosophy, Denholm is very clear.

"Consistency," he says.

"What frustrates dealers is a lack of consistency from lenders, be it regarding payout time, declines or approach to regulation. Our aim is for clients to know exactly what to expect from us."