I banked my first cheque as a broker February 1978; that’s right it was 40 years ago. The very word cheque, conjures up a bygone age, let alone the 40 years.
Back then I was known as a Leasing Broker because the dominant product was leasing, due to its tax advantages. As the Tax Commissioner cracked down on residual value settings, forcing them in line with depreciation rates, hire purchase came into vogue. The popularity of chattel mortgages didn’t take place until the introduction of the Goods and Services Tax.
The speed of technological development over the years has been exponential. I recall well, our first facsimile machine. We were early adopters so in the first couple of years it was useless because not a lot of other companies had them.
Prior to the fax machine, applications were typed, some hand written, and hand delivered to the lender. Signed documents were also hand delivered.
Over time the fax machine became almost universal with the vast majority of small businesses having one. How prophetic that it is now almost obsolete.
The introduction of the internet ushered in a new age in banking. No longer would settlement cheques be collected from the lender and hand delivered to the supplier. The fax machine then the internet bought the biggest changes. Documents and written information could be transferred instantly.
The final trip down memory lane relates to the mobile phone. I recall prior to having one; again, we were early adopters; my day would be challenged driving around trying to find a public phone that hadn’t been vandalised.
Some of you will well remember these days and not necessarily fondly.
So very much has changed but as the saying goes; “the more things change the more things stay the same”.
There is no doubt that technology has made the processes more efficient, but the process itself is still the same. The essentials of good lending haven’t changed. Lenders still look for borrowers who have the character and capacity to repay loans in a timely manner. Just because we can gather documents more quickly does not change the quality of the borrower.
Our customers are people and they like talking to a person who they know and who knows them.
My strong recommendation to all young brokers is not to be fooled by technology. Use it as an enabler to spend more time, not less, in front of your customers. Get to know them. Ask them: what are their plans, their strengths, their weaknesses, their appetite for risk, their opportunities and their threats? Be there for them not just when they are borrowing money but when times are tough.
The mark of a successful broker is the amount of repeat business written. Understanding your customer’s business and keeping close will ensure a steady flow of repeat business.
Competition will come thick and fast from online offerings so maintaining the point of difference will be key for our futures.
Terry Moody is a member of the Australian Institute of Management, the Company Directors’ Association, past President of the Australian Equipment Finance Association immediate Past President and current Company Secretary of the Commercial & Asset Finance Brokers Association. He has been involved in equipment finance for over 40 years and is a founding Director of Moody Kiddell & Partners Pty Limited. He is also a founding Director of the Northcare Foundation, a charity dedicated to intensive care research and education.