LONDON — MarketInvoice on Monday named a banking veteran as its new Head of Risk, becoming the latest fintech startup to poach talent from traditional finance players in this crucial area.
Shaun Alexander is joining the fintech company, bringing over 30 years of experience at retail and corporate banks. He began his career at Barclays and has worked at Santander since 2008, serving as their Head of Risk for Asset-Based Lending. This involves overseeing credit risk for the invoice financing and other asset finance products.
MarketInvoice, founded in 2010, lets small and medium-sized businesses borrow money only, using unpaid invoices as security against loans. It has lent over £1 billion across its platform to date.
CEO Anil Stocker told Business Insider: “We started with the belief that we would look at risk from a completely new perspective, we were outsiders and we went and challenged the status quo. A lot of insights, behavioural insights, are not captured by the banks because most of their processes are offline.
“That’s a very good approach because we’ve been able to pioneer and go into different sectors. But bringing someone in from the industry has massive benefits because we’re bringing onboard that experience over many decades, of what are the risks in certain sectors, what are the different things to look out for, what are the patterns we’re seeing over time — it’s complimenting our theoretical approach with market experience.”
Fintech businesses typically like to shout about how different they are to traditional finance and are often seen as more a product of Silicon Valley than the City. But MarketInvoice is not unusual in turning to the traditional to recruit someone to oversee the crucial risk function.
Peer-to-peer small business lender Funding Circle, perhaps Britain’s best-known fintech, recruited chief risk officer Jerome Le Luel from Barclays in October 2015. RateSetter poached Cyrille Sallé de Chou from Lloyds to be its chief risk officer last year and lured Jim Gunner from HSBC to chair its risk committee. (Sallé de Chou has since left to join HSBC.)
Stocker told BI: “In lending, risk management is the key thing. This is what’s going to make the businesses. This is what’s going to make the businesses scale, this is what’s going to make the business sustainable through the cycle.
“What’s interesting, I feel, is that with risk you have to kind of combine the latest methodologies around statistics, machine learning, the data insights, the behavioural insights, with people who come from the industry to see how they look at risk. When you combine those two, you can have some quite powerful results.”
At Funding Circle, for example, Le Luel introduced stress testing to the peer-to-peer lender after joining from Barclays and also cut lending volumes in the US after spotting worse-than-expected performance in some historical loans.
Alexander is MarketInvoice’s first head of risk and will sit above the company’s head of underwriting who has been heading up the function to date. He will oversee a team of eight people directly, alongside support from MarketInvoice’s data team.
Stocker says: “Of course, Shaun Alexander would not make the move to MarketInvoice if he just wanted to do the same thing as we was doing at Santander. He’s coming here because he sees a great opportunity for us to challenge some of his assumptions as well as he’ll challenge some of our assumptions.”
Alexander says in a release announcing his appointment:
“Much more can be done with the available technology to drive and enhance the quality and speed of risk decisions for UK businesses. MarketInvoice is not only challenging but driving the change in fintech to deliver a best-in-class risk function in business finance. I will look to adopt the latest technology in evolving our risk models and credit management to achieve MarketInvoice’s ambitions.”
The hiring of Alexander is part of a recent beefing up of the business, following a £7.2 million investment last year. Earlier this year MarketInvoice launched a new product and pledged to double the size of its business in the next year.
Last month the startup also named Giles Andrews, one of the founders of peer-to-peer platform Zopa, as its chairman. Andrews is a well-regarded figure in the industry and seen as one of the forefathers of peer-to-peer lending and UK fintech. Stocker said: “We are at that right stage now to bring in those heavyweights.”
Stocker says MarketInvoice has more up its sleeve.
He told BI: “There’s going to be a lot more news. We’re working on some interesting strategic partnerships and we have another product we’re hoping to launch later this year.”
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