Consumer lending

Etika Logo Dark (From Website '22)

Ethical lender etika benefit from champion/challenger testing with newly implemented ADP

Founded in 2012, etika delivers fair and flexible financial products in a socially responsible way to customers, retailers and partners.

About etika

etika can be selected as a payment option at checkout - also known as an “at the basket lender” - with a number of retailers. The technology-driven company actively seeks out retail partners that meet their standards for ethical finance, ensuring they put the financial wellbeing of customers first. Unusually, the lender does not charge fees for late payment, meaning customers that get into difficulty will not increase their debt. They believe that if the risk modelling and decisioning isn’t correct, it’s etika’s responsibility, not the consumer’s.

Choosing LendingMetrics

Prior to choosing to work with LendingMetrics, etika was doing a lot of work in-house, such as monitoring changes in the market, rather than using a third party. Previously, all risk decisions were decided by a technical team, rather than a credit risk department, using an in-house decision engine. The lender wanted to be able to concentrate more on growing the business so began to look at what technological solutions they could use to improve processes. They soon recognised that they wanted a decisioning system that could be managed by a credit risk resource and Auto Decision Platform (ADP) was the clear solution. LendingMetrics’ consultative approach allowed them to clearly demonstrate potential and flexibility of the solution.

The experience

Since implementation, etika have found the ongoing support and project management from LendingMetrics invaluable. According to etika, when they have encountered challenges or want to initiate something new in ADP, the LendingMetrics team have always been happy to help.

They have found the reliability and stability of the platform very strong, which was an important factor in their choice of solution. The provider also loves the modular nature of ADP as each of their retailers necessitates a separate set of requirements. etika prides itself in offering tailored solutions for their partners.

Their three main operators, for example, have completely different requirements, and ADP’s intuitive Engine Editor has made it simple and efficient for etika to confidently modify their policies, algorithms and risk appetite instantly, with no coding experience needed whatsoever.

ADP is second to none for champion/challenger testing. It has enabled us to confidently propose and execute changes in the knowledge that the objective is achievable.

Leon R Tunnicliff, Global Head of Credit Risk & Fraud at etika

Having a versatile team, etika have found it easy for non-credit employees to learn how to use the system. With every ADP contract, clients receive access to the Video Training Series, which comprises hours of custom-made training videos direct from LendingMetrics’ ADP experts, at no extra cost.

A particular highlight for the lender has been the ability to conduct champion/challenger scenarios. Previously, etika found this very difficult but now they are able to use the passive engine functionality to test logic changes against real-time data - without affecting live lending decisions - giving a highly accurate method of identifying the outcome of those changes.

etika will continue to focus on growing the business with ADP at the forefront of their credit risk strategy, ensuring they maintain their ethical stance and continue to lend in a socially responsible way.
Looking to the future, etika are introducing a multi-bureau credit risk strategy, utilising The LendingMetrics Exchange (LMX), which provides access to both Equifax and Experian credit reference, A.M.L, affordability and anti-fraud products through one single A.P.I, and one contract.

Chief Technology Officer, Neil Williams, said: ‘We’re looking forward to continuing to work with etika to further roll-out ADP in more territories and introduce multi-bureau credit reference data via our LMX platform. This will see them benefit extensively from preferential contractual terms alongside our white-glove service and extensive multi-bureau expertise.’