Reto Finance offers expert insight on the Island’s loan industry

There’s no doubting the impact of technology on all our lives. From personal, to home, to work, smart devices and applications have changed so much of what we used to take for granted. Mostly for the better; sometimes for worse. But at a pace and with purpose that seems unrelenting.

As well as exhibiting a very public face, technology has been quietly changing things behind the scenes too. Increasingly, automation, algorithms and artificial intelligence help organisations process data, busily sifting and sorting to make decisions that hitherto sat in human hands. Progress? Probably. Inevitable? Certainly.

The lending industry is a case in point. In times past, people not machines would have considered loan applications. They worked to a set of rules, of course, made decisions based on consistent criteria. Yet discretion and subjectivity based on intelligence and intuition could still sway matters one way or another.

Is this all but lost to technology now? Or does a place remain for human touch when it comes to a personal loan? One person with an insight into the past, present and future of local lending is Adam Dawson, CEO of Reto Finance, one of the island’s newest but also most experienced finance companies.

‘Technology has certainly had a massive impact on the lending industry over the past 20 years,’ acknowledges Adam, who has spent his career in finance and management consulting. ‘Decisions in the UK, for example, have become highly automated. Miss any of the criteria, and you miss out on a loan – it’s as straight forward as that. Fortunately, here in the island there is still room for the personal touch, for considering a person’s wider circumstances and individual requirements before deciding whether to offer a loan or not. It’s one of the reasons I enjoy working for a local company like Reto.’

Adam opened Reto Finance in 2019 after a management buyout of Shawbrook International, the local branch of a major UK finance house. Before this, he ran Close Finance, the company that first brought him and his family to Jersey ten years ago. During this time, he has come to deeply appreciate both island life and the distinct conditions shaping the local lending market.

‘We are so much closer to our customers,’ Adam elaborates, ‘which means Reto can more readily take individual circumstances into account. The amount of fraudulent loan applications here is also much lower, comparatively, the level of bad debt much less. This allows us to be more flexible and accommodating, while also ensuring people are not taking on more than they can afford to pay back.’

There are challenges that come with operating in a small island, Adam admits, such as size of market and cost of doing business. Fortunately, this is presently offset by a less onerous regulatory environment than the UK, something Adam hopes will continue in the future.

‘Customers absolutely need protection against unscrupulous lending,’ he states, ‘and some of the unethical practices seen elsewhere. Reto and other local lenders are presently engaged with island government on developing measures to prevent this. But we should be careful to avoid throwing the baby out with our bathwater. Slavishly following the UK might just lead to UK-style approaches to lending – automated decisions being taken by remote offices, rather than the human touch on offer at Reto.’

Would such a change drive Adam off to some remote office, to leave the island that’s been home for the last ten years?

‘I don’t think the situation will arise,’ he smiles, ‘because the island normally makes pretty logical decisions on such matters. And I don’t think my family would let me. Personal logic now dictates that Jersey is the only place to be.’