This document contains my current notes from the AltFi Lending Summit 2023.

1. 1
AltFi Lending Summit 2023
18 October 2023, London
Notes by: Kristi Rohtsalu
Summary
Themes of the AltFi Lending Summit 2023 were following:
• Macro-credit environment: resilient, yet consumers and businesses are being squeezed
• Artificial intelligence, automation and digitalization:
o Data is the key: getting open banking data flowing more freely
o Using technology to make sense of data quickly, including for regulatory purposes
o Using AI1
to fight against the new types of fraud such as deepfakes
o Generative AI to support client relationship managers
• Profitability as the new-found status for FinTech companies
• Good examples of strategic partnerships and acquisitions:
o Starling Bank and Fleet Mortgages
o OakNorth and ASK
• Regulation: Consumer Duty
• Embedded finance opportunity
• Commercial lending in digital age:
o Different segments, different approaches
o Consumer paradigms shifting to the business world
• Property lending in the rising interest rate environment
1
List of abbreviations can be found from appendices, section 13.1.

2. 2
Contents
1 Risk And Resilience In A Challenging Economy.....................................................................................3
2 The Evolution Of Alternative Lending: AI, Automation And Opportunities Ahead ..............................4
3 How Lenders Can Simplify Their Onboarding With AI - Fireside Chat Fireside Chat with Admiral
Money and Fintern........................................................................................................................................5
4 The AltFi Interview With… Damian Thompson, Chief Asset Management Officer, Starling Bank........5
5 The Cutting Edge Of Embedded Lending ..............................................................................................7
6 Understanding Consumer Duty And CCA Reforms: Constraining Or Catalysing Consumer Lending?..8
7 The Secrets Of A Successful Partnership: OakNorth Bank And ASK Partners.....................................10
8 Profitability In A High Interest Rate Environment ..............................................................................11
9 Digitalise Or Die: Why Tech And Data Should Be On Top Of Lenders' Agenda ..................................12
10 Commercial Lending In The Digital Age: Adapting To Changing Customer Expectations And
Preferences.................................................................................................................................................13
11 Managing Rising Rates: Strategies For Property Lending In A Challenging Market .......................15
12 Poll Results......................................................................................................................................16
13 Appendices......................................................................................................................................18
13.1 Abbreviations..............................................................................................................................18
13.2 Disclosure....................................................................................................................................18

3. 3
1 Risk And Resilience In A Challenging Economy
Headline Sponsor, Experian
Rob Haslingden, UK Head of Propositions @Experian
John Griffiths, Market Engagement Director, Credit and Risk, Business Information @Experian
Economy
• Retail spending continues to grow:
o Volume is down
o Value of items is up
• Drop in business sentiment
• Labor market cools:
o Unemployment rate is low, but set to rise
• Consumer confidence rises:
o Consumers have remained resilient to inflation
o Wage growth in the UK is at record high; big differences between the sectors
o Consumers think that the worst is over
• The chock of mortgage rates continues to roll out
Macro-credit trends: consumer
• Consumers are searching more for credits
• Arrears are slowly ticking up, yet consumers seem to be coping OK
• Card applications are holding up
• Credit card balances are slowly increasing
• BNPL has remained strong during the summer; average spend: £143
Macro-credit trends: commercial
• Business credit searches are on rise, but new lending is subdued
• Average cash balances are starting to drop
• Delinquencies have been rising steadily, but not very much
• Monthly default rates are increasing
• New company failure rates: there is big uptick for companies that were started in April-June 2020;
companies started during the COVID crisis behaving differently
• New business lending & outlook:
o New lending demand: +32%
o Growth in asset finance & asset value: +33%
o Loyalty of customers: 40% of debt from elsewhere
o Blind spots: 2.2% of ‘good’ debt is bad elsewhere
o Pockets of opportunity
In summary: Household and business credit is squeezed.

4. 4
2 The Evolution Of Alternative Lending: AI, Automation And
Opportunities Ahead
Niels Turfboer, Managing Director of the UK and Netherlands @TP24
Richard Prime, Co-CEO and Founder @Sonovate
Lara Gilman, Co-lead @IwocaPay
Moderated by: Daniel Lanyon, Editorial Director @AltFi
In our first panel session of the day we'll ask what the future holds for the alternative lending landscape.
We'll dive into the emerging opportunities, disruptive innovations, and potential pitfalls ahead, plus
question whether innovative lending models can continue to adapt and compete.
Companies in the panel
TP24: Started in 2016. In 4 countries. Lending to SMEs. Larger asset-based loans.
IwocaPay: Started in 2012. Provides instant working capital. Operates in UK and in Germany. More
recently, secured a new line of funding.
Sonovate: Working capital provider. Operates in UK and in US. Has lent 4.5 bn.
Uses of AI technology
Niels / TP24: We are testing the algorithms. Using technology for operational workflows. Testing AI for
risk management, but in the segment of larger asset-based loans it’s more complicated. Aim: fully
automate loans up to £5 million.
Lara / IwocaPay: For us, automation is core from day one. How can we use the data efficiently – and use
the right data? We do not automate everything, but only where we can automate confidently. We are
aiming to blend the best of humans and machines.
Richard / Sonovate: We see automation as fundamental, a necessity for scaling. Data is core foundation.
Are customers demanding automation and AI?
Niels / TP24: Customers do not care what we do technology-wise. They care about the service.
Keys to success:
• Having the data structure.
• Encouraging people to share their data; more accessible, more reliable and relevant data.
• LLMs getting more out of the data. Niels: “You already see it in medicine!”

5. 5
3 How Lenders Can Simplify Their Onboarding With AI - Fireside Chat
Fireside Chat with Admiral Money and Fintern
IDVerse Public Breakout
Highlights:
• Simplifying customer onboarding with AI: using AI / deep learning to verify the documents and
people’s faces.
• Need to fight with new types of fraud, such as deepfakes2
.
• AI enables improving understanding where extra checks are needed.
• Regulation is in progress: digital ID framework, giving principles.
• Observation: Neobanks are becoming comfortable while big banks are creating innovation teams.
4 The AltFi Interview With… Damian Thompson, Chief Asset
Management Officer, Starling Bank
Damian Thompson, Chief Asset Management Officer @Starling Bank
Interviewer: Oliver Smith, Managing Editor and Head of Content @ AltFi
From the news: From July 2023, Starling Bank has a new (interim) CEO.
On 30 June 2023, the co-founder of Starling, Anne Boden, stepped down as the bank’s CEO. John Mountain
took the role as interim CEO.
“Now that we have grown from being an aspiring challenger to an established bank, it is clear the roles
and priorities of a CEO and a large shareholder ultimately differ and require distinct approaches. As
Starling continues to evolve and grow, separating my two roles is in the bank’s best interests,” said Anne
Boden via the Starling’s press release in 25 May 2023.3
“[…] However, Boden’s decision followed a clash with investors over fund manager Jupiter’s decision in
February to sell its holding in the bank at a price that cut Starling’s valuation from £2.5bn to between £1bn
and £1.5bn, according to people familiar with the situation,” writes Financial Times.4
The interview
Q: What is Anne Boden’s role in Starling now?
A: Anne is on the Board. She is very present on the strategy.
2
Deepfakes involve the use of algorithms and machine learning to manipulate or replace elements of a photo, a
video and/or audio.
3
[WWW] https://www.starlingbank.com/news/starling-bank-reports-six-fold-increase-in-profits/ (Last accessed on
19 October 2023.)
4
Emma Dunkley and Siddharth Venkataramakrishnan (19 June 2023). ”Anne Boden stepped down as Starling CEO
after investor clash”. Financial Times.
[WWW] https://www.ft.com/content/bd88678d-68f4-4c17-83dc-d56803a48ca7 (Last accessed on 19 October
2023.)

6. 6
Q: Tell us about Starling’s loan book.
A: At the start, Starling had no asset strategy. Everything was about customer proposition. That created
deposit growth. Now, there has been a strategy shift. Starling had to get to profitability – and where is the
best opportunity? On the loan market. Entering loan market requires building the capacity: risk
management etc.
Starling made strategic portfolio acquisitions (including Fleet Mortgages, specialist buy-to-let mortgage
lender, in June 20215
). Key things are getting right yields and building capabilities for the future.
Starling’s advantage: it started with a low C/I. For reaching profitability, Starling does not need that high
Loan-to-Deposit ratio as incumbent banks do.
Mortgages are very difficult to resist if you look at risk-adjusted returns. At the same time, it’s difficult to
go to the low-risk segment where HSBC’s cost of capital is close to zero.
Mortgage loans played a big part of Starling’s profitability last year – and will play in this year as well.
“We do residential mortgages – we do not have any commercial real estate.”
Q: How is your mortgage portfolio performing?
A: The effect of interest rate reset is coming through. Starling is more exposed to single point interest
reset as compared to the others who have built their portfolios over time and see mortgage interest rates
resetting more gradually. “But nothing to worry about,” Mr Thompson adds.
Q: Currently, Fleet is a subsidiary brand under which Starling’s mortgage loans are issued. Are there any
plans to start issuing those loans under Starling brand?
A: Fleet has a great reputation on the market. Starling brand and bank license help in building confidence
on the background, but Fleet’s brand remains. Doing Starling’s own mortgages is not in sight right now.
Definitely, the question comes up in the strategic plans.
Q: Culturally, Fleet is very different from the rest of Starling. What are your thoughts on integrating those
two cultures?
A: Starling is a regulated bank. Fleet is an alternative lender. Starling is a tech business, fleet is not. Fleet
is very good in what it does – we have left them to their own universe.
Q: Getting to Net Zero6
– what’s your plan for Starling?
A: Starling started with sustainability being built in. We have got a very low ratio. There is no paper; there
are built-in principles.
Q: What is Starling’s appetite towards providing forward flow in real estate development finance.
A: None. Real estate development finance is a different story.
An anonymous from the audience asked: “What do you make of the Metro Bank’s recent ‘wobbles’? Is it
an opportunity for Starling”
Reference was made to the recent bit of news about Metro Bank seeking bids to sell £3bn of mortgage
loans from its books, this with the aim to repair its balance sheet without undue delay.7
5
[WWW] https://www.starlingbank.com/news/starling-bank-acquires-mortgage-lender-fleet-mortgages/ (Last
accessed on 19 October 2023.)
6
Net Zero refers to the balance between the amount of greenhouse gas that's produced and the amount that's
removed from the atmosphere.
7
Mark Kleinman (15 October 2023). ”Metro Bank seeks bids within weeks for £3bn mortgage book”. Sky News.

7. 7
The question was politely ignored this time, yet Metro Bank’s issue came up later on, anyway.
5 The Cutting Edge Of Embedded Lending
Miriam Wohlfarth, Co-CEO @Banxware
Brendan Regan, Head of Europe @Plaid
Nick Harding, CEO and Co-founder @Fluro
Jakob Pethick, Chief Commercial Officer @YouLend
Moderated by: Amelia Isaacs, Senior Reporter @AltFi
This panel discussion will probe into how embedded lending is transforming customer experiences with
personalised financing solutions. Is the era of one-size-fits-all lending over, how is technology enabling this
new age of lending and are traditional lending models prepared for this kind of disruption?
Q: What is embedded finance?
A: Integration of financial services into non-financial products and services, such as e-commerce
platforms, mobile apps, or other businesses, allowing customers to access financial functions seamlessly
within the context of their existing activities.
Q: What is going on in the consumer side?
Nick: Embedded finance continues to grow. The time is clearly extremely challenging. We are monitoring
trends like mortgage interest rates being reset.
Q: What are the trends in B2B embedded lending?
Jakob: There are more challenges on the loss rates side. On the other side, we are also seeing
opportunities. In B2B, challenges are different than in the consumer space. The opportunity is much
bigger.
Miriam: For the customers of the platforms, it’s all about personalisation, building the right product:
localize, adapt the user flow, be very transparent. Backend offer is very different, especially in Europe.
People are very much on their privacy thing.
Q: What are the key factors for the embedded finance technology innovation?
A: These are numerous:
• Emergence of a lot of software companies that make the embedded finance possible.
• Open banking that made the rails possible. Open banking is 5-6 years old, embedded finance is 3 years
old. Open banking is the key enabler. With that, you immediately increased the addressable market.
It is the real-time nature of banking data that enables instant availability of loans.
• VPR – Variable Recurring Payments – is nascent. We are heading to a different era: reduced fraud etc.
Q: What role does personalization have to play?
Miriam: One size fits none. Amazon in a way set a gold standard for consumers. You really like this blend.
Companies that build the right product are those who succeed.
Brendan: Customization that is reflective to customer profile. Being able to interact with the customer as
soon as the situation changes (e.g.: income increases, or, on the contrary, customer is in trouble).
[WWW] https://news.sky.com/story/metro-bank-seeks-bids-within-weeks-for-3bn-mortgage-book-12984988 (Last
accessed on 19 October 2023.)

8. 8
Nick: The key question is this: how can we get more open banking data flowing?
The two stages in embedded finance development:
1) Embedded financing built into the product, and
2) Personalisation of check-out experience.
Q: Other than e-commerce and online marketplaces, where have you seen interest towards embedded
finance?
• Insurance companies have shown interest
• Interest from software companies
• Interest from payment businesses like PayPal
• Interest from businesses like Airbnb and Booking.com
Q: What is the biggest block to embedded lending?
A: It’s the customer who does not expect a loan outside a bank. Younger people see that already, they
realize: convenience is the king.
6 Understanding Consumer Duty And CCA Reforms: Constraining Or
Catalysing Consumer Lending?
Lucas Dalglish, Chief Commercial Officer @Jaja Finance
Nikki Worden, Partner and Head of Financial Institutions Group, UK @Osborne Clarke
Carol Hamilton, Chief Product Officer @Provenir
Rosie Normanton, Head of Strategic Partnerships @The Money And Mental Health Policy Institute
Moderated by: Daniel Lanyon, Editorial Director @AltFi
As new regulations reshape the landscape, what is the real impact on consumer lending? This session will
tackle the crucial debate on whether these changes are creating stumbling blocks and adding red tape, or
unleashing potential. Can the industry turn regulatory shifts into strategic opportunities? We’ll challenge
perspectives and explore the transformative potential of these reforms.
Background information
Consumer Duty is a standard introduced by the Financial Conduct Authority (FCA), intended to improve
consumer protection for financial-services firms in the UK. The changes were announced in 2021 and
officially came into force on 31 July 2023.8
More information can be found on the FCA website: https://www.fca.org.uk/publications/policy-
statements/ps22-9-new-consumer-duty
The interview
Q: Consumer Duty in the UK came to force this July. What has changed?
8
Source: Wikipedia, https://en.wikipedia.org/wiki/Consumer_Duty (Last accessed on 19 October 2023.)

9. 9
Lucas: We have to make sure that we have the right customer focus. For Jaja, it was a smaller project. We
need to be very clear now: what those metrics are?
Nikki: It’s a step-up. Biggest change is this: everything has to be demonstrated. Data is the key. There are
lots of controversies about the partners of the financial service providers. Consumer Duty means investing
into compliance. There is more coming in the future. Part of the compliance piece is fair value assessment.
The most obvious issue on the market is overpricing. How can the firms justify that their prices correspond
to the fair value?
Carol: There are lots of discussions about the data and extracting meaningful information very quickly.
That’s where AI comes to play. Regulation is very ambitious, creating confusion: how are customers
benefitting from that?
Rosie: It’s too early to measure the consumer benefits. We saw increased demand for our work: what is
the experience for the customers with mental health problems?
Q: How is the Consumer Duty going to interact with innovation? What are the risks in the outcome focused
regulation?
Lucas: For us, the regulation provides competitive advantage. A lot of the new competition is getting
blocked. For people coming into the space now, these are new challenges. We have been part in building
the regulation, we have built it collectively; new entrants have to figure it all out on their own.
Nikki: There are both, positives and negatives. The most successful FinTechs just have to demonstrate
what they have done. For newcomers, lawyers are expensive. Getting to the market is more difficult. On
the other hand, small can be nimble – for example, when it comes to solving the problems of people with
mental health problems.
Lucas: Name an example of the struggles that people with mental health problems can have.
Rosie: For example, making phone calls is a big struggle for some.
Q: Let’s now focus on consumer credit and BNPL regulation.
Rosie: There are two key issues: a) BNPL is very important to be regulated, and b) customers accessing
credit in digital way is having its own risks.
Nikki: The problem with the consumer credit regulation is that you have to pick a category. BNPL is low
risk by product conditions. What is risky, is how people are using it.
Carol: Regulation could be accelerated in several places. Technology often leads the way; technology
forms the regulation. Consumer expectations have changed and, more importantly, consumer behaviors
have changed. Technology pushes that. Regulation ‘catching up’ is not the right term – technology forming
regulation via shaping consumer expectations and behaviors is how it’s ought to be.
Q: Consumer Duty wants firms to show that they are testing outcomes. What are the best ways for firms
to do that?
A: Step 1: Identify vulnerable customers. Step 2: Simulate, test, find the right strategy for them. Note that
vulnerability can be temporary. Collect and use functional feedback: what customers are upset about?
Tracking a section of customers through your entire value chain is really what gets you beneath the skin.
Q: What happens with the Consumer Duty when loan portfolios are bought and sold?
A: It’s a new part of Due Diligence.

10. 10
7 The Secrets Of A Successful Partnership: OakNorth Bank And ASK
Partners
Ben Barbanel, Head of Debt Finance @OakNorth Bank
Doug King, Co-founder @Ask Partners
Moderated by: Oliver Smith, Managing Editor and Head of Content @AltFi
Since 2018 OakNorth Bank and ASK Partners have had a successful working relationship, co-lending
millions of pounds across dozens of property developments, before the two lenders agreed a deal in
October 2022 for OakNorth to acquire a 50 per cent stake in ASK. What are the secrets of this successful
partnership, how have the duo managed to collaborate rather than compete, and what are the outcomes
from effectively working together?
OakNorth Bank, founded in 2015, is specialist in structured lending solutions to growth businesses. The
company has 300+ employees.9
Doug, on ASK:
ASK was set up in 2017. The idea was this: create a diverse funding place rather than people getting
funding from one source. We have family offices, HNWI-s etc. as customers. The team has grown from 3
to 20.
Q: When did the partnership began?
Ben: First transactions took place in 2018. Now there are no transactions as such – it’s all one smooth
flow.
Doug: OakNorth bought 50% equity stake in ASK after we had done business together for four years.
Ben: As a regulated bank, we have retail deposits. We also have ASK’s cash behind us.
Q: Why 50% acquisition and not 100%?
Ben: We decided to build the partnership together rather than take over.
Doug: There are synergies for both.
Q: How has the deal worked?
Doug: We have massively grown our loan books. Previously, ASK originated transactions. Now originations
are more on the OakNorth’s side. Co-operation started on management level. Now, it’s more on team
level.
Ben: ASK for us is reliable, diverse source of capital.
Q: What does the future hold for both? Is 100% ownership still a theme?
Ben (on 100% ownership): There is nothing defined.
Doug: We are going to grow together. That’s how we have structured the deal. We are trying to optimize
the talent.
Both: M&A in 3-5-7-10 years time… Let’s see where the most of the equity value is.
Q: Culturally, is ASK stand-alone?
9
Sources: Wikipedia, https://en.wikipedia.org/wiki/OakNorth_Bank (Last accessed on 20 October 2023.); AltFi,
https://www.altfi.com/companies/oaknorth

11. 11
Doug: Yes, 100%. From our lending perspective, we are 100% off-balance sheet.
Q: What advice would you give to other companies who are looking for the same kind of deals?
Ben: Communication. Open dialogue.
Doug: I agree. The key is talking to each other, respecting one another.
Q: Any challenges from working together?
Doug: There have not been any actual roadblocks. OakNorth is in the heavily regulated (banking) industry,
yet it is incredibly quick and nimble. Learning from working in the regulated industry has taken us to the
next level.
Q: Any operational challenges?
A: There has been a well-defined process. Probably… When we got together in a small room with the
management team and did some blue-sky thinking. Then the tech group came and said: no way.
Q: Question to ASK: how do you want to grow your business?
Doug: Two important things:
a) Brand that is respected by borrowers, investors and shareholders, and
b) Where our people work, is it a happy place? Culture aspect is incredibly important.
Q: Another question to ASK: Do you have control over your lending criteria?
Doug: Yes. What we do not control, is the lending process.
8 Profitability In A High Interest Rate Environment
Brian Bartaby, CEO and Founder @Proplend
Maximilian Eber, Co-founder and Chief Product Technology Officer @Taktile
Hugh Courtney, Chief Financial Officer @Zilch
Moderated by: Daniel Lanyon, Editorial Director @AltFi
As the financial world grapples with rising interest rates, how can lenders maintain profitability? This panel
will question existing models and explore our understanding of profitability. We’ll ask whether innovative
strategies can ensure sustainability and even prosperity in such a climate.
Profitability is a new-found status for FinTech companies.
Hugh: Zilch has been profitable for the last months. We assumed, we have to build a model that works in
all markets and in all market conditions. For us, it was about utility: what the customer wanted and where
the customer wanted it? It was also about scaling: how do we actually scale? Zilch has a highly engaged
customer base, customers getting more valuable over time. Acquiring customers has become cheaper:
better channels, more repeat customers.
Brian: Proplend became profitable in 2021. We managed it through efficiency. Technology has played a
massive role in that. The loans do not sit in our balance sheet. We are a very small nimble team.

12. 12
Maximilian: We help risk teams to build and launch their decision-making process. Three elements to
profitability:
a) We help customers to connect all data sources
b) Merging these data sources together
c) Pricing
We always try to focus on credit approval process. Cross-selling, pre-approving offers, etc.
Q: What about lowering costs?
Hugh: Absolutely! Accessing venture capital is no longer a certain journey. We did a lot of consolidation
on our cost base, clarified the focus. We have to focus on innovation.
Q: Let’s say, interest rates stay flat. How stable is your business model?
Hugh / Zilch: We are turning our book around very frequently. That gives us a lot of flexibility. The other
part is this: we can make money out of customer relationships.
Brian / Proplend: There is always benefit to have both, retail and institutional money. We have built a
loyal set of clients. We treat investor money as our own money.
Q: Let’s make some predictions. Let’s assumes, interest rates go up. Who is exposed?
Maximilian: Underwriting will be much-much more important. Funding is more expensive, margins are
tighter.
Hugh: Recent bank failures… Result of poor management. I feel quite bullish about the FinTech sector.
Q: What FinTech business models, do you think, are fundamentally flawed when it comes to profitability
in low interest rate environment?
A:
• Businesses that rely on VCs.
• Right now, neobanks are benefitting from low deposit rates. But what if the rates raise?
Q: Brian, has Proplend compromised lending quality in order to increase volumes?
Brian: No. Whatever happens with the interest rates, our margins remain the same.
9 Digitalise Or Die: Why Tech And Data Should Be On Top Of Lenders'
Agenda
Kennek Public Workshop
Alan Margolis, Director @Greymax Capital
Georges Assi, CEO @Naviter Capital
James Davis, Co-Founder @Rocking Horse
Xavier De Pauw, Founder @Kennek
Kennek is a loan management system that is ‘more than just a loan management system’. It offers a
complete lending toolkit, with no coding required.10
10
From the company’s website: https://kennek.io/platform (Last accessed on 20 October 2023.)

13. 13
The following slide summarises the key message of this coffee-break session (which one may or may not
agree with): lenders should focus on the tip of the Lending ‘Iceberg’, that is originations and underwriting;
everything else – loan monitoring, risk management, portfolio analytics, arrears management, funding &
investor reporting, loan servicing – should be left to the solution providers such as Kennek.
The slide that summarizes the key message from the panellists
For example, as highlighted by Georges, investors are missing standardised reporting:
“It’s not that the companies do not want to give you the data – they simply do not have that data readily
available.”
There was a question from the audience on how far such standardization would go: would it also mean
standardized risk models, taking IFRS 9 expected credit loss models as an example? James thought that
this level of standardisation was unlikely to happen any time soon. No one else commented.
10 Commercial Lending In The Digital Age: Adapting To Changing
Customer Expectations And Preferences
Conrad Ford, Chief Product Officer @Allica Bank
John Griffiths, Market Engagement Director, Credit and Risk, Business Information @Experian
Eliott Saba, Partner @Bootstrap Europe
Moderated by: Amelia Isaacs, Senior Reporter @AltFi

14. 14
With a shift towards digitisation and evolving customer expectations, how is commercial lending adapting
and thriving? Can we reimagine commercial lending to meet customer preferences in the digital age? This
session will question traditional practices and explore innovative digital solutions.
Q: Commercial lending in digital age – where do you see it heading?
Conrad / Allica Bank: We have those two segments: micro business segment and established SMEs; the
answer is different for the two. In micro business segment we see some adoption of the new tools like
open banking, but not so much as we expected. In this segment, the only successful product is micro
business credit card. SME segment… You cannot fully digitalize it. Generative AI is ideally suited to that
part of the market, to support the work of relationship managers.
Elliott / Bootstap Europe: Commercial lending is broad. Full automation… We lend to B2B SaaS companies
which are easy to underwrite. The others require expert knowledge.
John / Experian: We are trying to push the market: how can we widen the market to the micro business
segment? Consumer paradigms are shifting to the business world, but not everything. Most of consumer
credit is automated; all agenda is around digitalisation.
Q: Where do you see the problems on the market?
Conrad: The problem is in the middle where the loans are too big to automate, yet too small to underwrite
manually. That’s where the opportunity is.
Elliott: Customers want the answer asap: do they get the loan and what are the terms? CEOs, they still
want that human element. VC-s focus on loss making businesses. There are lots of M&A opportunities out
there.
Q: Conrad, tell us more about Allica’s lending today?
Conrad: Allica is full-service FinTech bank in the SME segment. From lending perspective, we entered the
market in phases. Today, 2/3 of our loan book is secured by property: factories etc. The second product
is machinery – trucks, focus on working capital. We have grown very-very quickly.
Q: What about profitability?
Conrad: We have been profitable for over a year by now. It’s very good time to be a bank in Europe.
Elliott: It’s a good time to deploy new capital, and (disagreeing with Conrad) it’s very profitable to be a
lender in the current interest rate environment. Profitability is the name of the game right now.
Q: What do you make of the Metro Bank’s issue around its mortgage book?
Elliott (?): It’s a long-time problem with capital calculation. The fundamental question is this: is there room
for branch-based banking? I believe, for some segments there is room – not for the branches like big banks
have, but for a focused challenger.

15. 15
11 Managing Rising Rates: Strategies For Property Lending In A
Challenging Market
Uma Rajah, CEO and Co-founder @CapitalRise
Richard Dana, CEO and Co-founder @Tembo
Richard Rowntree, Managing Director Mortgages @Paragon Bank
Moderated by: Oliver Smith, Managing Editor and Head of Content @AltFi
The property lending market is being tested with rising interest rates. This panel will delve into the
challenge, and ask whether property lenders can navigate these rough waters and still prosper?
The companies in the panel
Paragon Bank is UK specialist bank. The bank’s lending products include mortgages for landlords and loans
for business customers, including SMEs and experienced property developers.
CapitalRise is specialised property lender, focusing on developers.
Tembo is a tech-focused mortgage broker that is helping families to organize family mortgages.
The interview
Q: How rising interest rates have affected you?
Uma / CapitalRise: We are focusing on developers in Central London. Central London has its own property
cycle. It has been incredibly resilient. Rising interest rates have had an impact – but some other factors
have the opposite effect.
Richard R. / Paragon Bank: Demand from tenants is up, supply is down. Amateurs are struggling.
Specialists – our focus group – are primarily interest only. We are seeing very little stress from the
historical loan book.
Richard D. / Tembo: There is a continued shift to purchasing as compared to renting. Developers are trying
to hold their prices.
Q: Uma, you reported very high growth last year. What about this year?
Uma: We are very optimistic. Our pipeline is very-very strong. As alternative lender, we have several
advantages.
Q: Tembo, how have your priorities changed?
Richard D.: Initially, we focused on first time home buyers. Now we are helping both homebuyers and re-
mortgagors.
Q: Paragon, what is driving the growth in your mortgage lending?
Richard R.: Regulation: Net Zero. There is much to do.
Q: What are the biggest risks for property lenders right now?

16. 16
Uma: Increasing financing costs; developer completing the project; ultimate end price of the property,
given rising construction costs. We are making sure that we have healthy buffers.
Richard D.: Valuation. No one knows what that is going to be. Recession next year, which may come.
Richard R.: Affordability is still a concern.
12 Poll Results
There were three polls running during the day:
1. How seriously should lenders be taking generative artificial intelligence?
2. What is your outlook on the 2024 lending environment?
3. What are your Bank Rate expectations for 2024?
The results are depicted on the graphs below.
2%
37%
61%
0% 10% 20% 30% 40% 50% 60% 70%
Ignore for now
Cautiously investigating
Full steam ahead
How seriously should lenders be taking generative AI?

17. 17
14%
34%
52%
0% 10% 20% 30% 40% 50% 60%
Pessimistic
Neutral
Opptimistic
What is your outlook on the 2024 lending
environment?
4%
17%
79%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Rising above 6%
Below 5%
Flat at 5%
What are your Bank Rate expectations for 2024?

18. 18
13 Appendices
13.1 Abbreviations
A – Answer
B2B – Business-to-Business
BNPL – Buy Now Pay Later
CCA – Consumer Credit Act in the UK
CEO – Chief Executive Officer
C/I – Cost/Income ratio
FCA – Financial Conduct Authority (a financial regulatory body in the UK)
HNWI –High-Net-Worth Individual
M&A – Mergers and Acquisitions
LLM – Large Language Model
Q – Question
SaaS – Software as a service
SMEs – Small- and Medium-sized Entities
VC – Venture Capital, also refers to the Venture Capital firms
VPR – Variable Recurring Payments
13.2 Disclosure
This paper includes my current notes from the event, finetuned within the following few days. Quotes are
not precise, hence no quotation marks. I did my best to capture what was said; all mistakes are mine.
Event page on AltFi website: https://www.altfi.com/events/altfi-lending-summit-2023