Sponsored by Haydock Finance
Why Agility is Key in a Pandemic Era
In the last 4 months I have regularly asked myself the following question;
Amy McCleney, research engineer at Southwest Research Institute.
Image courtesy: Southwest Research Institute
Credit: Courtesy of Cognite
he Department for International Trade (DIT) is responsible for promoting international investments and trade in the UK, as well as developing trade policy framework. As new markets are developed and the financial landscape is shifted by changes like Brexit, the DIT works to ensure investments in the UK remain stable and profitable.
In the thick of it is Campbell Keir, Deputy Director of Energy and Infrastructure responsible for the Oil and Gas, Renewable Energy, Civil Nuclear and Infrastructure portfolio.
What would a firm of Business Consultants have charged and how long would it have taken them to evaluate if Haydock Finance was capable of relocating all of the team to working from home, with minimal effect on both the business and their welfare?
No one could have predicted the complexities of COVID-19 but like many other businesses in financial services and beyond, we had to adapt to this rapidly changing environment. I am proud to say we achieved this, but it not without its challenges.
It was not around the IT that the complications arose, but from the dire issues that our customers were experiencing and our fundamental desire to help them. We had 3600 agreements in need of ‘extreme’ care and assistance. The 2020 pandemic already has seen a reduction in real GDP by -2.2% in Q1 which equals the lowest drop in 2008 Q4 and dwarf’s the 1990 Q3 reduction of 1.1%, the worst downturn of the recession. You cannot easily deal with forbearance of that magnitude with all systems working and your team in the office, let alone with none of that being available. You, therefore, must change and adapt quickly.
You have also said the technology can help with data handling. What did you mean by that?
Let's say you're reloading catalyst on a platform. You need to have data available to you out in the field that is only available in the control room. You need to know where the process is at, what are the conditions, is the pressure stable? Maybe the pressure reading is not accessible to where you actually physically are, but you can get a reading from the control room.
If you have something like augmented field procedures, the person in that control room has already gone through the procedure to check if pressure was low enough to add catalysts to it safely. That's already been completed. You don't actually have to go try to find that piece of data, it's available to you in real time. You can stay synchronised with the control system.
At Haydock, like most others, we knew that we had to look after our own customers with existing agreements before considering any new lending, though…how many businesses wanted new Asset Finance in April 2020? Not many.
We redeployed people, already with the immediate difficulty of tussling with the new challenges of working from home. Not to mention the mental stress that the actual ‘lockdown’ caused. None of us fully know what our friends, colleagues, and even families in some cases, dealt with.
With lots of hard work and dedication, our customers got through ‘Moratoria Phase I’ and are now coming to the end of what we see as ‘Moratoria Phase II’. Positively for us over 65% of our agreements have returned to full payments. We are also prepared for Phase III should that arise.
Throughout COIVID-19, Haydock has maintained its credit appetite. We have remained in all areas that we were in pre-pandemic and we continue to be ready to lend to SME’s via our introducers in our chosen sector’s. We therefore believe we have remained a consistent partner to our introducers right through the crisis. Despite our service being affected, a broker partner of ours stated to me,
You may be slower than you have been and that’s understandable, but at least you are still lending and at least we can still be sure when we send you a proposal we will get an answer we expect.
As Sales Director, and the Haydock Board echo’s my comments here, that is not good enough for us. We simply must improve our service levels to get back to the high standard that we are renowned for. We have studied 4 parts of our critical processes in a ‘Change’ project that I suspect would have taken a lot longer if we had time to think about it! It is key to deliver change with minimum extra risk to the business and this has been a huge consideration.
The first part for us is the first part of the process, Proposals. We were getting average 15 per day in September 2019, February 2020 that had risen to 30. This was due in the main to changes in process internally plus the re-structure and re-focus of Sales and in fact the whole business to become more Broker focused.
In April we got 4-6 proposals a day whereas one day in July we got 59. With such a difference in quantity we have had to streamline our process, for instance, why do we require as much information at proposal stage on a £25k deal as we do on a £250k deal?
Second part is Underwriting. We feel that as a business like many others we should move towards some sort of automation. The main point to this is clearly, give quick yes/no when the deal warrants it to free up the time of expert underwriters to look at the deals that need the extra diligence. We have now streamlined our processes and procedures to take less time on certain deals, for example less than £50k.
Third part is at pay-out stage. We had up until recently around 150 checks at this stage and we had to enter onto one of our 2 systems items such as ‘cubic capacity’ and ‘trim colour’ for Assets we were funding. We were also entering many of those things twice.
Lastly, we produce documents for our Introducers for the deals they send to us. Sometimes us producing a document is worthwhile and added value, so where it is a CBILS deal, or a Re-finance or a deal with several assets. However when it is a £25k used HGV we think our introducers would actually prefer to use an improved Haydock HP Doc and better PDF editor to do their own, after all if we issue an acceptance the best way to secure that deal is for the introducer to sign up ASAP and doing a document themselves clearly can be done immediately.
We see our future at Haydock as bright but with challenges of this pandemic reverberating for a long time yet. How many businesses will need further forbearance in Q4 2020? How will wholesale funders react to further forbearance requests? Will a second wave of the virus cause further disruption? What, if anything, will replace CBILS? How will company accounts look next year when taking this year into account? What will happen to equipment values?
There is a lot to consider and we do not have all of the answers but we do plan, we do devise strategies even for ‘what if’ situations and we will be, I have no doubt, be much more ready when dealing with something like this or even a repeat of this in the future.
Share this article