Q&A: Emma Steeley reveals how Aro is deploying data intelligence in personal credit

Emma Steeley, chief executive officer of Aro, formerly Freedom Finance, on transitioning the company to a product-led approach and creating a more inclusive culture in the process, since joining in July last year.

1. For those of our readers who aren’t familiar with Aro, what is your offering?

Aro is the largest consumer lending marketplace and go-to embedded finance provider in the UK. Our platform provides customers with credit offers through our direct integrations with lenders. We offer unsecured loans, credit cards, homeowner loans and auto finance from a single application form. 30% of our business comes through our direct-to-consumer approach. But, the majority of our business comes via our partners, which tend to be financial services brands, or well-known retailers.

2. You were appointed as chief executive officer of Aro, or Freedom Finance as it was, in July 2022. What was your vision for the lending platform? And what have you been able to execute so far?

When I first went into the organisation, I had a fantastic team in place and the technology was brilliant, so that was all really helpful. But the approach we’ve taken is to restructure the organisation completely and we’ve transitioned to a product-led approach, which isn’t the easiest thing in the world to do. But what it’s forced us to do is to break down silos that had formed in the business and now we have a much more collaborative way of working with each other.

As I said, 30% of our business is from our direct-to-consumer proposition. However, when I joined the business, it was very clear to me that shouldn’t be the growth path. The growth path should be via our B2B partners and that’s a unique offering that Aro has in the market. And, actually, it’s the bit that has the true ability to scale at pace.

One of the key strategic pillars that we’ve implemented is the deployment of data intelligence, so that’s now being successfully deployed into the platform. Whereas we used to look at data from a creditworthiness point of view and pre-filter on the lender rules, now we’re using customer application behavioural data, a lot more credit bureau data and, of course, Open Banking data to enable us to provide personal credit-matching solutions for our customers – that’s been a fundamental shift. When I joined, we had no data scientists and we now have an expert team of five. They’re working with us, so that as well as being product-led, we’re being data-led in the way we think about customers, for us to deliver personal credit solutions.

The other piece is the shift in culture. I wanted to ensure we are driving a more inclusive environment. One of the steps we’ve taken is a small one but one that I’m immensely proud of. We’ve rolled out new policies in the business and they’re around maternity and paternity leave, domestic abuse, and the menopause. Just by being really candid in the work environment, that helps to drive the inclusive culture and remove any of the stigma that surrounds those subjects.

3. Are you hoping to lead by example in financial services by implementing those policies?

Yes, and it’s something that we want the financial services industry and the fintech industry to be proactive in – anything we can be doing at Aro to educate companies that these are the standard policies you should be thinking about. Because all women of a certain age are going to go through the menopause, but that doesn’t mean we become useless at work. It’s about, how do you make it a comfortable environment for them and remove the taboos?

Domestic abuse is something that impacts so many people, both men and women, and it can impact the way that people work. It’s about how you should be proactively making your employees feel as comfortable and included as possible – and safe. We’re keen at Freedom to promote these policies across the industry.

4. How does Aro use Open Banking APIs to match lenders with borrowers?

With Open Banking specifically, we access the APIs and the categorisation via Equifax. At the moment though, it’s very much for the customers who are declaring they’re on a slightly lower income and then we get the explicit consent to pass customers’ data to the lenders that are using Open Banking to deliver positive outcomes. And the reason I’m saying about positive outcomes is that many lenders are still on a journey to understand how they can use Open Banking to say ‘yes’.

It’s been new ground for me being on this side of the fence, because prior to Aro and being at Equifax and AccountScore, I was seeing more clients using it, more API calls being done, the affordability solutions being deployed. We, at Aro, only earn revenue when lenders lend. Being on this side of the fence, what we’re seeing is lenders are primarily using this data to say ‘no’ at this standpoint. This is a massive area of focus for us over the next 12 months so we can work strategically with lenders. How do we give them the confidence to say ‘yes’ to customers without necessarily having to adjust their risk appetite? That’s something industry-wide that we need to be addressing.

The other piece of Open Banking we’re rolling out imminently is in-session Open Banking because there are a few lenders that require Open Banking at the point of application. So, to improve the customer experience and reduce the overall friction the customer goes through when they’re applying for credit, we’re getting in-session Open Banking up and running for certain lenders. I think that will help to improve uptake and customer experience.

5. The term ‘embedded finance’ is becoming more familiar, yet the technology is still nascent. How is Aro unlocking embedded finance opportunities and how do you see those opportunities developing over the next few years?

Embedded finance simply allows companies to access and utilise financial services provided by third parties. Aro has been doing it for years but nobody’s known about it. We work with partners such as Asda, Very, Creation and TSB, either at a customer’s point of need – so when they are outside of the organisation’s risk appetite but they still want to provide that customer with a service – or as an affinity relationship where we power the entire digital lending marketplace on the partner’s behalf.

One thing to note is that some partners can initially feel nervous about ‘I’m passing my customer to someone else to look after’. But the truth of it is, it brings them closer to their customer, as they’re still looking to serve the customer and provide them with a positive experience and the best possible outcome. I think that’s a powerful message for the brands that are looking at embedded finance solutions.

6. Who is set to benefit the most from embedded finance?

The lenders benefit because, from a lending perspective, they don’t want to just see the same customers over and over again via an aggregator site, for example. What they’re looking for is pools of customers that maybe they wouldn’t get exposed to otherwise and that’s how embedded finance solutions can really benefit on the lending side.

Ultimately, it is the customer who benefits the most, though. We know no-one is excited to apply for credit, so what the customer wants is peace of mind. As you’ve got more organisations that embrace the opportunity to provide access to third-party services for their customers, the more the customers will feel companies are looking after their best interests.

Emma Steeley took part in the first Women in Open Banking meet-up, in partnership with American Express, earlier this year – read what she had to say about good leadership traits.