International Finance
Fintech January-February 2019 Magazine

Serving the new breed of digital first retailers

Serving the new breed of digital first retailers
With a flexible payment option, powered by a customised 'decision engine', Duologi is aiming to serve a new breed of digitally aware customers. Rob Cottingham, credit director at Duologi tells us more about building a perceptive engine and its relevance in the financial services industry

Tell me about Duologi’s journey so far
Duologi is a specialist consumer lending company that was set up in September 2017 after receiving backing from Oaktree Capital. We established the company primarily to service the new breed of “digital first” retailers that need to provide fast, frictionless finance options for customers at the point of sale. These organisations understand the importance of data analytics to help them optimise their own sales, marketing funnels and customer lifetime value. Hence, our main focus is to provide bespoke finance solutions and data analysis to retailers, as well as organisations across a wide range of other sectors from health to education.
Unlike many other similar businesses in the market, we know that one size simply does not fit all. Instead, we work with each partner individually to ensure we create a bespoke service for each. Our unique platform is powered by groundbreaking technology, built from scratch, and allows organisations to quickly and simply start offering finance to their customers. 
What are the biggest challenges you have experienced in your current role?
Developing our custom-built ‘decision engine’ from scratch last year was the biggest challenge. It’s a robot which can make extremely rapid decisions on whether or not customers should be offered credit based on their individual circumstances. We were tasked with making the engine market-ready within just a matter of months – which we did – and are really happy with the results. I am, however, never complacent. We continue to challenge both the technology itself, and the scorecard development within it, and strive to improve its performance even further. The more we grow, the easier this becomes, as we continue to gather data that enables our insights to become increasingly deeper and more complex.
 What are the current issues facing the consumer credit market?
While credit options such as point of sale (POS) finance are becoming increasingly popular within the UK, there are some major issues preventing businesses taking full advantage of the benefits credit has to offer. Within our recent report, which looked into current state and future of the consumer credit market, we found the main reason for this was a severe lack of consumer awareness around such payment methods. It highlighted that almost everyone (94%) would not think to ask if a business offered POS finance and that this could be costing UK businesses up to £25 billion a year in lost revenue.
Serving the new breed of digital first retailersWhat’s more, we discovered that poor credit lending practices – such as high interest rates and unexpected costs – are far too common and are contributing to high basket cart abandonment rates.
We have no hidden charges for our end customers. We charge an interest rate, (or not, if it’s interest free) – and that’s it. But we are aware that there are others in the market that start charging when customers get into financial difficulty. However, we simply do not believe that is the right thing to do and hinders efforts to find solutions to debt challenges.
Many other lenders are falling short in terms of user experience. This was also evident from our research. We found that over a quarter of people experienced slow credit application processes, whilst lending agreements were full of confusing jargon which made the whole experience less transparent than it should have been. At Duologi, we decide whether someone is eligible for finance in just a few seconds after asking only a handful of questions. This makes lending processes as easy as paying by card, so we see this as the future of credit.
What does the industry need to do to address these issues going forward?
There are a few simple things that lenders can do to rectify these issues:

  • Make sure 0% interest loans are offered – we found this to be a major consideration for over three quarters of consumers buying on credit.
  • Create a seamless payment journey – to avoid customer frustration, credit platforms should work quickly, easily and seamlessly across all online channels, including mobile.
  • Promote the offering – given the low awareness levels around POS credit, it is imperative to promote these finance options wherever possible. Even a simple website header can alert potential customers to the benefits of finance solutions, providing a clear reason to purchase from that business in particular.

What keeps you motivated?
To see our business grow from nothing – and to be part of that from the start – is amazing. Even more motivational than that, however, is getting a deeper understanding of how we can help others to grow their businesses, whilst at the same time supporting our end customers with their purchases.
About: Rob Cottingham joined the company back in May 2017 and was one of the first members of staff. His key task – apart from the basic requirements of defining appetite, developing policy and rolling out an appropriate strategy – was to execute the build of our unique decision tool that now sits at the heart of the business. Prior to this, Cottingham had built up over 20 years of experience in the credit risk and enterprise risk sectors, including in international theatres of operation.

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