InterBay Asset Finance joined the Acquis Lumia community in 2023 and, as an early adopter of the platform, we spoke to Andy Middleton, the Head of Underwriting at InterBay, about how the group is using Lumia and how he sees the platform as a key tool in the industry’s fight against fraud.

About InterBay Asset Finance

InterBay was set up in 2018 by OSB Group to build an Asset Finance business from scratch. It focuses on funding hard assets and has a portfolio in excess of £300m, with plans to grow further.

The company chose to implement Lumia because it wanted a simple solution that would integrate with its existing fraud detection processes and protect its portfolio. It enables the team to independently validate customer hire purchase debt against filed company accounts, providing peace of mind about any lending decisions.

When asked about why InterBay chose Lumia specifically, Andy said:

“At the time, we were using another Credit Reference Agency (CRA) which, while useful, doesn’t provide full coverage of the whole Asset Finance market. But by adding Lumia, we were able to build a clearer picture of our customer’s debt profile across the market.”

 

Fraud as an industry challenge

Andy describes fraud as “a key risk to InterBay and our peers. Our customer and broker relationships are built on trust and common goals. Experiencing fraud as a funder can lead to a full loss and negative outcomes for our genuine customers. As an industry, we all need to work together to root fraud out for the benefit of funders, brokers and customers.”

In response to this collaborative challenge across the industry, Lumia was created by Acquis Data Services in 2022. It is a register of asset finance borrowing that provides a clear and real-time view of a company’s current asset finance arrangements. It has been developed with the cooperation of lessors from across the industry and enables asset finance providers to identify suspicious or irregular balance sheet borrowing on a large scale – and alert the lender to possible fraudulent activity.

Andy continued: “The more we contribute as an industry, the more informative the data becomes. It’s incredibly important we push fraud out of our industry. We should be competing for good business, not bad debt.”

When looking at the challenge of fraud in the asset finance sector, you can’t ignore the Arena TV scandal, which left the industry with a huge and lasting impact. And when asked about this, Andy said: “Fraud had always been a risk in our sector, but Arena TV made it a reality, felt by everyone. Beyond the losses incurred by funders, I believe the biggest loss was to genuine customers seeking asset finance as the funders sought to reduce the impact and protect their portfolio from similar frauds.

“This is why Lumia was the perfect solution – it has been developed by the industry and presented us with a simple, but effective solution that will report on most of the Asset Finance Top 50’s portfolios. “At InterBay, we saw Lumia as an opportunity to further protect our portfolio whilst maintaining a smooth customer journey through our underwriting process. We wanted to enhance our existing fraud prevention measures by adding a further layer of independent validation to our customer accounting data. It allows us to confidently lend to genuine customers and steer away from fraud.”

 

How InterBay uses Lumia

Delivering a personalised service to their customers is important to InterBay and therefore they manually underwrite to give a bespoke decision, so the company was keen to implement the solution quickly and use Lumia as a reference tool on every decision made.

Andy continued: “We use Lumia as an additional validation source of a customer’s outstanding hire purchase debt. The data can inform our credit team of any new debt taken out that isn’t reported to our Credit Reference Agency (CRA). At the other end of the process, Lumia data also supports our Collections and Recovery teams where we might not be given the full story by a customer in arrears.

“Prior to using Lumia, our risk management and lending decisions were still robust, but Lumia gives us an additional layer of insight to ensure we’re offering the most appropriate outcome for us and our customers.”