Lending as a service: the new industry paradigm 

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aaS automates the lending process, removing many of the steps that banks usually place as stumbling blocks, to give customers faster access to financing with fewer barriers.

This market sector is anticipated to double in the US and UK by the end of 2024, according to LendIt. Such streamlined growth is driven by the dramatic benefits for banks and non-bank lenders.

By replacing legacy applications with a natively digital LaaS platform and realigning business processes, loan approval can be completed in minutes, with funds disbursed within hours.

LaaS impact studies have found that key costs of acquiring and servicing loans can be reduced by as much as 80%.

ezbob is now one of the leaders of the growing LaaS market.

“ezbob was started from a chance meeting on an airplane in 2011,” Guriel explains.

“It was just before I turned 40 and I wanted a change. I’ve spent my entire career in the banking sector, including in JP Morgan.

“At the time, I was amazed that there was not much to find on the internet that had to do with actual banking products. Remember, this was pre-fintech as we know it today.

“We set up the office in a small farmhouse, started planning the system architecture and raised some £2m from the UK government’s Angel Co-Fund and from Hagshama Fund.

“Since then, we have raised millions in debt and equity from the likes of Oaktree Capital, Bank Leumi, Shawbrook and the Honeycomb Investment Trust.”

The idea of being a technology provider was born in 2012.

“At the time, we teamed with Accenture in order to sell our platform to banks. Unfortunately, at that time, the banks were not ready to work with a start-up or fintech.

“The only way we could get the business off the ground was to start lending ourselves. After we signed our deal with RBS, we decided to pull back from lending so that we could concentrate on R&D. “

ezbob is now a UK-based software provider for banks and other financial institutions. The company has evolved into one of the most advanced lending solutions available on the market.

The company has 80 employees from 11 countries, with offices in London, Tel Aviv, and Sofia. The fintech provides it LaaS solutions to major banks and financial institutions. It counts American Express, NatWest and Yorkshire Bank among its clients.

The UK government’s Bounce Back Loan Scheme, an initiative to support SMEs hit hard by the Covid-19 pandemic, came around when Metro Bank was unprepared to participate effectively.

As Andy Piggott, Metro Bank’s director of lending products, explains: “The discussion wasn’t about whether or not we wanted to get involved, but rather how we would get involved.

“We hadn’t previously participated in the unsecured SME lending space, and our processes were geared more towards larger commercial customers that require manual intervention and underwriting as part of the credit decisioning process.

“We had to act very quickly to build a system that would help our customers whilst meeting the high volume of application and cashflow demands we anticipated.”

The bank explored its options and decided that embarking on a digital, automated journey was the best fit for the high levels of demand expected.

To create a suitable solution for its customers, Metro Bank turned to ezbob and its award-winning loan origination platform.

ezbob’s onboarding and credit decisioning platform helps financial institutions to increase sales (account openings and lending) and profitability by using advanced AI-powered decisioning analytics and automation.

It taps into the rich open banking environment and aggregates information from over 40 different data sources, prompting better risk management and quicker, more informed credit decisions.

Ezbob provided Metro Bank with a highly customised, AI-powered onboarding flow, adjusted to BBLS requirements in a short timeframe.

The relevant external and internal data sources were integrated smoothly and ezbob’s risk engine was adapted to be fully compliant with the BBLS.

According to the partners, the SME lending platform had 94% fully automated approvals. They say 90% of users completed the application in less than five minutes.

The ezbob system also acted as a data warehouse for all reporting requirements.

With Metro Bank new to the unsecured SME lending sector, a dedicated, agile team of ezbob experts were on hand 24/7 to support both the bank’s team and the new platform.

This project helped to build a strong relationship between Metro Bank and ezbob that endures today.

ezbob was founded in 2011, in the early days of the fintech revolution. The fintech started operation as an online lending platform, processing more than £1bn ($1.41bn) of loan applications from SMEs. The loans were funded from its own balance sheet.

“You could say lending is in our DNA,” Guriel says.

ezbob has been the winner of multiple awards over the years. Among these are the EU Guarantee Programme for Small and Medium Business Loans in October 2013, and the Financial Innovation Award for Best Technology Initiative in December 2017.