This is Part 1 of a 2-part series on Understanding Suerly. In this post, I want to focus on some fundamental elements of Suerly. What is the value proposition? And how does it distinguish itself from other products in the market?
Click here for part 2: Why Suerly?
The mechanics of Suerly
To put in the simplest words, Suerly is like a job portal, but for loans. Let’s think of it this way. Before the proliferation of job portals, job seekers look for jobs from a newspaper pull-out section called Classified (it has nothing to do with secrecy) that employers advertise their vacancies on. These job ads will state the roles and responsibilities, qualification requirements and a list of documents the employer needs in-order for job seekers to apply.
To apply for the job, applicants need to write a cover letter and a resume, print them out, make copies of all documents, certificates, recommendation letters etc. Depending on how many vacancies the applicant applies to, he/ she needs to mail in a separate set of the same documents to different employers. Also, don’t forget the stamp!
Once everything is ready, the applicant goes to the post office and mail the job applicant package to the respective employer. From there, he/ she waits for calls while praying for good weather so rain doesn’t ruin the hard-made job application packages.
Fast forward 20-years, you don’t see people apply for jobs this way anymore. I’ll even be surprised if millennials know what’s a Classified pull-out.
With job portals like Monster, JobStreet, Indeed etc., anyone now can register themselves and create an impressive online resume. Applicant can also be creative and link their LinkedIn profile or portfolio URL to their online resumes. As for employers, instead of waiting for postmen to deliver job application packages to them, they now have a readily accessible pool of candidates to select from with job portals. It also makes it faster to screen candidates for interviews. Job portals make job application and vacancy fulfilment cheaper, easier and faster.
I hope by now you can see that applying for a loan is like applying for a job 20 years back. Applicants have to search and compare loan products, fill up the required forms and attach the required documents to prepare for the application process. Also, depending on how many banks the applicant intended to apply from, he/ she will need to make separate copies of the same documents for submission.
Going back to the analogy I used earlier, the mechanics of Suerly is to have a direct access platform between borrowers and banks, where borrowers can create their credit profile (i.e. a resume in job portals) and banks can have access to a readily available pool of interested applicants. This mechanics has proven to work for job portals and many other direct access platforms such as holiday rentals and crowdsourcing etc.
How is Suerly more effective than loan agents?
I did not have a good experience dealing with loan agents. I have written about it before. Maybe it was my problem. Maybe I was being too demanding or I am too much of a perfectionist. So, to understand how others feel, I ran a survey on 50 people that had recently gotten a loan. In summary, three in four people do not believe loan agents will keep their personal information safe. In fact, they believe the marketing and scam calls they received originated from loan agents. In fact, loan agents are incentivised by the number of contacts they can make, many agents will share their customer’s contacts in return for more contacts from other agents. To them the math is simple, the more contact they make, the conversion they’ll get.
As for Suerly, it runs on an “agentless” model where interested applicants register their information. This creates a pool of interest loan applicants where banks can access and invite their ideal applicants to apply. To protect the applicant’s privacy and security, sensitive profile information will only be sent to the bank if the applicant accepted the bank’s invitation to apply.
Amongst other benefits with Suerly, the “agentless” model offers:
- Protection against prying eyes on applicant privacy and sensitive data since no intermediaries will handle the applicant’s information.
- Saving in agency cost/ commission, making overall loan origination cost lower. Banks can leverage on this saving to reward the applicants.
Is Suerly another loan comparison website?
Apart from comparing loans, loan comparison websites also offer application services. This makes loan comparison websites a financial intermediary that earns a commission from lenders. Thus, these websites will inevitably inherit the pitfalls of loan agencies.
Recent google search trends on some popular loan comparison websites also suggest that these websites are trending downward even though consumer loans are on the rise. This shows that people are staying away from these websites and prefer to deal with banks, directly.
Another key distinction between loan comparison websites and Suerly is these websites use marketing materials to attract applicants. They often advertising a particular loan of having a rate that is “as-low-as…” or showing a particular loan product of having low entry bar with “instalment starting from…” The truth is, applicants do not always get the advertised rate that because the offer rate and terms imposed depends on a lot of factors such as the applicant’s debt-service-ratio (DSR), credit profile, demographics etc. Suerly does not attract application with marketing materials. In Suerly, applicants “ask” for financing and wait for banks to “bid” for their financing after screening their the applicant’s credit profile. In the end, we want applicants with good credit standing to have as many offers so they can choose the best deal for themselves. With this model, we are also encouraging banks to compete in giving better offers instead of having the most attractive marketing campaigns.