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.’
Reto recommends using both facts and feelings when it comes to buying cars
‘Buy in haste, repent at leisure.’ It’s an old saying that might sum-up the experience of many when it comes to car purchases.
We may start with best intentions in mind. Yet cool-headedness often evaporates with every step inside the gleaming showroom. Our emotional heart swiftly takes control, overwhelming the intentions of our logical head.
I came, I saw, I must have!
Without too much thought, we pay the asking price – or something close – accept the trade-in deal, blithely sign-up to the finance arrangements on offer.
Brakes on. It doesn’t have to be this way. A wind of change is driving through the motor trade industry when it comes to our purchase options. And a helping hand is on offer when it comes to obtaining the right price.
‘The internet, or more specifically online car dealers, is increasingly becoming an option for purchasing new and used vehicles,’ expands Adam Dawson, CEO of local motor loan experts Reto Finance. ‘Potential buyers provide requirements to specialist broker sites, which search through multiple dealerships to find a matching vehicle, at the most competitive price. It’s a very transactional approach compared with traditional local dealerships, but likely to become the route of choice for many of us in the future.’
In the meantime, however, local dealerships remain the choice route for most. And many potential buyers continue being led through this approach by their heart, rather than head.
‘It’s not that buying a car should be an emotionless process,’ continues Adam, ‘but when it comes to money, a level head will put you in the driving seat – along with key financial facts. This is where independent loan companies like Reto can play an important role.’
So, when it comes to money, there are three key factors in play.
First is the price you should be paying for the new car. Every vehicle has an ‘established’ value based on factors such as make and model, year of manufacture and so forth. And it’s derived from real-time transactions collated from nationwide data on car sales.
Second is the money a dealer should offer for your existing vehicle – if trading in. Again, the established value of a second-hand car comes from a centrally managed system, based on actual transaction data.
Third is the cost of finance, if a buyer is not paying cash. Most dealerships will offer a loan or hire purchase arrangements to cover the cost of vehicle purchase. Yet in some cases, the interest rate may rise depending on profit earned on the sale or trade-in price.
‘No one is saying car dealers shouldn’t make a living,’ elaborates Adam. ‘They must invest in showrooms, after all, stock, staff and after-sale services. But emotionally-led purchases may lead to buyers paying more – sometimes far more – than strictly necessary. The counter is a logically-led solution. And specialist finance companies like Reto are perfectly placed to offer one.’
To provide car loans, Reto needs access to the same vehicle valuation information as car dealers. Yet rather than access this at end of the purchase process, why not obtain near the start. This can help ensure buyers get the best possible purchase price, trade-in value and interest rate.
‘Once you have set your heart on a vehicle,’ concludes Adam, ‘get it in your head to contact a company like Reto Finance. We will happily share information about the established value of cars with potential buyers before they settle on a price with the dealer. A little less haste and a few important facts can help put you firmly in the driving seat. From there, it should be a straight road ahead.’
Reto Finance makes the case for a new business name
The prospect of change is capable of evoking different feelings in different people.
For some, breaking with the old is a prospect to relish. Change is welcome, a reason for anticipation and excitement about the future. For others, letting go of familiarity is only ever a prospect for anxiety. What do they say? ‘Better the devil you know’ – best stick with the status quo, no matter how much a change is needed.
Change: it certainly can be a tricky business. And there are few things in business trickier than changing the name of an established organisation. So why contemplate it at all? The prospect of ‘rebranding’ is something many business leaders shy away from. Why take the risk? What’s the point of potentially alienating loyal staff and customers after all. Yet there are times when a new identity is necessary and totally appropriate. Moreover, there are times when adopting a new look and feel can provide the perfect platform for attempting something new, for reinvigorating the organisation, for inviting staff and customers to come along on an exciting new journey. Sometimes, a rebrand may be just what an organisation needs.
A good example of this is found with new local lending company Reto Finance and its transition from Shawbrook International.
Established in 2016, Shawbrook International opened in St Helier’s Conway Street to provide loans for local personal and business customers. A subsidiary of UK-based Shawbrook Bank, the organisation rapidly established a reputation as one of Jersey’s leading loan companies.
Yet for all its success, it slowly became clear that something was amiss. Certain matters moved too slowly, more and more opportunities were going begging, it seemed at times that the chance for greater success was slipping by.
The worrying situation became increasingly obvious to Shawbrook International’s local MD Adam Dawson.
‘Working for and alongside Shawbrook’s UK team was great,’ he elaborates, ‘but also frustrating at times. It was too easy to view the Channel Islands-based operation through UK eyes, to judge local opportunities from a UK perspective, to colour our intentions with a UK filter. In short, being part of a larger non-Channel Islands organisation was proving both a help and hindrance. Something had to change.’
That change happened in October 2019 when Shawbrook International became Reto Finance, and, more fundamentally, a whole new company. Amicable discussions then negotiations led to a local management buy-out. Adam and fellow directors became owners of the new company, supported with backing from a major London-based finance investment house. The collective belief is that the opportunity presented by the change is a very exciting one.
‘While we provided a great service as Shawbrook, constraints on the business limited the chance to do even more. Being a local company opens so many doors. The Channel Islands’ financial regulations are different to the UK, its financial laws more tailored to the local market. Reto Finance can now create financial products specific to local requirements. We can expand the range of loans available, increase the lending flexibility, speed-up decision making, minimise the layers of complexity often associated with loan applications. It’s a powerful platform from which to shake-up the local lending industry. Reto means ‘challenge’ in Spanish – I’m looking forward to seeing a challenging Reto making some real changes.’
So, in this case it seems that change should be a welcome prospect, not one to cause anxiety. What do they say? ‘Seize the day’ – sometimes a change for the better is exactly what’s needed.
Following a management buy-out, Jersey’s newest loan company opens for business on 1st November. Reto Finance is the new brand for the business in a deal which has been supported by leading private equity investor Quilam Capital. Reto, which means ‘challenge’ in Spanish, has exciting plans to shake-up the local lending market while continuing to operate the existing and successful business.
Since opening in 2016, Shawbrook International has become a significant finance provider for both personal and business customers. While successful, however, the local management team identified opportunities to take the business further through separation from its UK owners. Negotiations recently came to fruition, allowing Reto Finance to step forward.
‘The relationship with Shawbrook lent a powerful platform upon which to build the business,’ explains Adam Dawson, who remains CEO of the new company, ‘but we believe there’s now an opportunity to become more tailored to local needs. Under the new arrangements, we can more fully create the products and services demanded by Channel Islands customers. Being part of Shawbrook allowed us to challenge the local lending market. As Reto, the challenge now is simply how far our ambition can take us.’
Operating from its existing Conway Street premises in Jersey and Smith Street in Guernsey, Reto plans to continue offering a wide range of loan products for both personal and business customers. The opportunity presented by the new company will be extending that range and challenging the traditional approach taken by many local lenders.
‘Customers old and new can rely on us for traditional loans,’ Adam continues, ‘for a holiday, new car or home extension perhaps, or when buying business equipment and assets. We don’t want to categorise or pigeon-hole anybody’s requirements however. Reto will be the specialised lender of choice, providing flexible finance solutions that suit local needs, whatever shape or form they come in. An “off-the-shelf” approach to loans just won’t work in the future. The world is changing – it’s time to change the approach to lending as well.’
All existing customers are being contacted with information about the new company, with no planned changes to their existing terms and conditions. New customers continue to be welcomed, with no disruption to lending anticipated. For further information, contact Jersey 01534 886900 or Guernsey 01481 886900, or email email@example.com or firstname.lastname@example.org.
About Reto Finance
Reto Finance is a privately-owned lender operating its business in Jersey and Guernsey and fully registered with the Jersey and Guernsey Financial Services Commissions and compliant with Channel Islands’ finance regulators. The management team were supported in this buyout by London-based specialist investor Quilam Capital.
About Adam Dawson
Adam set-up and managed Shawbrook International Limited in 2016 following seven years working at a senior executive level for a major Jersey-based finance house. Prior to this, he operated in management consulting roles across a range of financial services.
Adam is an experienced and recognised local business leader holding an MA in leadership from Exeter University, where he also mentors first-year undergraduates. A resident in Jersey, Adam juggles work with a busy family life and keeping fit.
About Quilam Capital
Quilam provides flexible investment for exciting ventures. It combines targeted financial solutions with expert guidance and advice, working alongside clients, helping them overcome challenges and accelerate their business performance.
The core team has 35 years’ combined sector experience, encompassing Barclays Capital, Morgan Stanley, RBS, Shawbrook and EY, and a leading track-record of investment, making Quilam the go-to speciality finance partner, having completed over 100 transactions across the investment spectrum. The wider management team also offers corporate finance and operational expertise to provide a full range of private equity services and executive support. For more information about Quilam Capital visit, www.quilamcapital.com