BLOG: Fintech to help letting agents battling High Street banks
Historic complaints to the Business Banking Resolution Service from small businesses will be closed from February next year. Garrett Foxon, founder of Lettspay, gives his opinions on the issue.
The Business Banking Resolution Service (BBRS) is an independent service designed to resolve complaints between SME business and their banks.
It will still deal with complaints after April 2019 but only from businesses with turnovers of £10 million or less and assets of £7.5 million or less.
Of course, if there were no disputes between the banks and their business clients there would, in theory be no need for the BBRS.
CHOICE
Most small letting businesses feel they have little choice but to deal with the High Street banks. But most have found themselves receiving poor service and at risk of having their undesignated client accounts closed as the banks use anti money laundering requirements to lose accounts which they perceive to be unprofitable to operate.
If an agent acted in this way, their landlord clients would simply move to another provider. Most letting agents currently try to tough it out and put up with the situation because they may not be aware that they have alternatives.
Fintech client accounting providers provide all of the required compliance for an agent and leave the agent in control.”
This is where fintech can provide a solution. Fintech client accounting providers provide all of the required compliance for an agent, leave the agent in control (so not outsourcing the handling of monies) and, crucially, care about their relationship with the customer (the agent). Their success relies on providing a solution and service that meets or exceeds the needs of that customer.
Undesignated client accounts where all client monies are sloshing around in one account are a risk the banks understandably don’t like.
IDENTIFIABLE
A good fintech solution provides individual numbered client wallets and so all client monies are identifiable and allocated, removing the undesignated issue completely.
If all letting agents left their High Street banks there would likely be a collective sigh of relief in the banking sector. Most banks see lettings and management as a high-risk market with little financial reward. But this is because they are operating an outdated low-tech model that actually increases the very risks they are concerned about.
The BBRS provide a limited complaint resolution service and is not suitable for most letting agents.”
The BBRS provide a limited complaint resolution service and is not suitable for most letting agents.
The biggest deterrent for fintech providers to do anything but provide a superb service would be the potential loss of reputation and customers.
We don’t provide a great product with great service because we are scared of independent resolution. Quite simply, we just don’t want to acquire a bad reputation or see clients going elsewhere.
Garrett Foxon is the founder of Lettspay
