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MERJE Meets - a series of articles and interviews based on expert insights from a range of senior business leaders - continues with a Q&A with Sheraz Afzal, highly experienced Legal, Risk and Compliance Director for progressive FinTech Quint Group...
Sheraz is responsible for leading a fast-paced Legal, Risk and Compliance team, ensuring that Quint Group can efficiently monitor and identify any risks to the business.
He brings a wealth of experience to this position, having previously held senior roles within Risk and Compliance for numerous high profile Financial Services institutions covering the UK and Europe.
Please can you tell us a little bit about the Quint Group company culture and ethos and what makes them unique in comparison to your competitors?
Greg Cox, our Founder and Chief Executive, described his vision as Quint Group becoming like the VISA of consumer credit. It’s a self-contained ecosystem of businesses that encompass credit building, personal credit, consumer credit, and payments. It’s interesting to have a set of businesses that are all distinctive in their own right but, at the same time, have synergy and can exist in harmony with one another.
Quint Group is wholly independent in that Greg is the main shareholder, along with the leadership team. In practice, this means we’re not beholden to investors or lenders, which is pretty unique to FinTechs, particularly those that are growing rapidly. Many will have taken in extra cash in order to scale, which has the capacity to disrupt the dynamic.
In terms of culture, Quint Group has a real family feel. It has thoughtful processes in place and looks to hire what we call ‘superstars’, the majority of which live locally to HQ, although we also have hubs in London, San Diego, Cape Town and Brisbane. They tend to stay at Quint Group for a long time, resulting in very little talent churn and the capacity to grow. Quint Group doesn’t fill roles for the sake of it and understands that a bad hire can affect the microculture of a team.
Our people have become the backbone of the business, which offers consistency and reassurance to other potential employees. We’re also open to exploring new ways of working which keeps our approach fresh, inventive and exciting, while paving the way for success.
This has given Quint Group a real identity, one that cares for its people. We all work hard but no one is micro-managed or overworked, meaning that we have tangible job satisfaction. I have previously worked in other more brutal companies which are very much gloves off and delivery focused. That method just wouldn't work at Quint Group, which offers a much more caring and nurturing environment, but is also extremely focussed on high performance.
What do you enjoy most about your role as Group Legal, Risk & Compliance Director?
I feel successful in my role when I’m treated by the executive team as a confidante and they proactively come and tell me what’s on their minds. My aim ultimately is to create a safe space for them to talk and to me that’s an indicator of success. With risk management, there are several different lenses with which to look at a problem that encompass impact, scale, reputation, cost and people. Engaging with the latter helps you to look at the world and address the other aforementioned factors in a more rounded way. If you do it well, your colleagues will come to you to get a different perspective, which helps them to do their own jobs better.
I also enjoy being a troubleshooter, particularly across legal matters such as deals and disputes. There’s a wide succession of new and untested problems that come across my desk and the challenge around how to tackle them keeps things interesting and motivates me to come to work. It’s why I avoid larger firms as the projects, although complex, can be repetitive and with that comes boredom. Being part of a fast scaling FinTech with five different companies in its portfolio means that the challenges presented are intrinsically far more complex to tackle, which keeps things interesting.
There has been a lot of FCA focus in recent years around consumer lending, for example payday loans, BNPL and retail finance. Given the current economic climate and cost-of-living crisis, this seems more topical than ever. How has the consumer lending industry evolved over the past 10 years and what does the future look like in this space?
The past 10 years have been really interesting from an innovation perspective. What payday lending did that was good was to facilitate faster speed of decisioning. Fifteen years ago, you couldn’t execute an agreement online, it took ages and the high cost short term (HCST) credit industry really brought that to life around how quickly one could distribute funds. We’ve also seen in motor finance, the rise of PCPs or HP deals. They didn't exist 10 to 15 years ago when the payments would be higher because they were in a straight line. Now with PCP there is one big payment at the end which brings the “monthlies” down, so it’s interesting as the shift has been more optical than substantive.
Take Buy Now Pay Later (BNPL) for example, it’s not new, it’s essentially the same principle as a credit card. All BNPL has done is change an existing product and made it more optically palatable. The same could be said about PCPs. On the face of it, a lot has changed, but fundamentally underneath it all, the same core products are being dressed up differently to suit the current market’s requirements.
The industry is still struggling with how to lend profitably to subprime customers without PPI subsidising the credit risk. PPI was a huge issue because it was bundled into the loan in question. Why? Because the profit from the PPI was needed to offset the credit risk. Then when the FCA carried out regulatory interventions, lo and behold, that market constricted, and payday lending seemed to come out of nowhere. However, in reality, payday lenders were around 10 years prior to 2011/2012. Then payday lending got scrutinised and supply tightened up, and consumers moved on to BNPL to meet their expenditure and consumption needs.
One reason BNPL companies exist, and HCST credit existed, and people aren't using their credit cards for purchases, is potentially because some folks simply haven't got credit cards. As a result, people took out payday loans to fund consumption and Buy Now Pay Later became a part of that. It’s hard to figure out how to service that segment and it’ll be interesting to see what happens with the cost-of-living crisis and whether there will be regulations imposed on BNPL that constricts this channel, leading to the launch of a new product that services the gap left by Buy Now Pay Later. I think, because of the current economic situation, we’re on the cusp of that happening and it’ll be interesting to observe how it unfolds.
There’s also an argument to say that BNPL will proliferate during the cost-of-living crisis as people feel the pinch but want to continue purchasing non-essential items. As costs continue to go up, this actually becomes an income side problem, while lending is an expenditure side solution. If costs are going up, the only solution to that is to lift incomes because all debt can do is spread the cost over time. This leaves people with the same problem of being unable to meet loan repayments month-on-month.
Quint Group has a credit building business Credito. What is Credito’s purpose and how does it work with its customers to support them during this time of economic uncertainty and the cost-of-living crisis?
Credito’s purpose is to provide the tools and insights that help people improve their credit scores, which in turn increases their borrowing power, get access to loans and credit, pay off debts and achieve their goals, all while getting to grips with how it works.
But first things first, how do people get known to a credit bureau? Typically it starts when they’re a child and a savings account is opened on their behalf. As people grow up and get a job, that account becomes a current account with an overdraft. Student loans also add to this footprint and this is when a person will become known to a bureau, along with having a permanent address and being on the electoral roll.
Credito is a 12-month subscription service that’s paid through installments which we report to the credit bureaus. The subscription gives people access to ways to build and improve upon their credit score. Our target customers are people who are new to credit due to age or moving to the UK, or people who have a poor credit rating, keep getting turned down and want to take positive steps to improve it so that they can, for example, get approved for a mortgage. Credito helps them build a payment record. We also assign them a personal credit coach who can sit down and go through their rating with them to help reflect on what happened and what they can do to rectify the situation, by setting up an action plan to help them take control in whatever way is needed to improve their score.
We’re making some good strides so far in the early stage and we’re proud of our Trustpilot score which is near perfect (4.9/5) with 500 reviews and counting. That tells us that some of the things we’re doing are helping our customers to feel more empowered. It’s also helping us to hone in on what works best for our customers so that we can improve their experience moving forwards. We’re also planning to launch a lower priced subscription service so that we can help more people who need it.
When it comes to the cost-of-living crisis, typically more people than ever are struggling to make loan repayments, meaning that people will have to make difficult financial decisions to keep all of their plates spinning. Credito is a product which can help them understand the impact of some of the decisions they might make and how they could be detrimental to their financial health.
How does working in a FinTech compare to your previous roles and working environments?
Quint Group is the first FinTech I’ve worked for and I do prefer smaller firms as they’re more creative, with less daily repetition. Large organisations have a lot of red tape and decisions take a long time to get made. What I prefer about FinTechs is the fast pace, variety and new challenges they present compared to more mature institutions. There’s something different to sink your teeth into every day.
In my role, it’s important to be nimble when it comes to making decisions as speed very much dictates the rhythm of change. It’s far better to overcome roadblocks quickly and move on so that everyone can work more effectively. I’m also open to the idea of not being perfect, so trying something new and having it fail and being able to learn from it so it doesn't happen again. That’s how people improve in their role. A FinTech provides an environment where that can happen and they become stronger as a result.
What is the future of FinTechs/Quint Group in your opinion?
FinTechs are almost like innovation laboratories for larger organisations. They are the speedboats of our industry and larger organisations are the oil tankers. FinTechs solve the real problems, resulting in a clamour for the products that they bring to market. The larger organisations then buy the FinTechs, effectively outsourcing their research, and product development. I think this is the current way of working, and we’re still quite early in that cycle of an economic model for FinTech businesses but the future looks extremely promising.
What piece of advice would you give to people aspiring to follow a similar career path?
Be curious and don't make final decisions too quickly. I think that the minute you reach a conclusion, you’re in danger of closing off all other possibilities. Even when you’ve made a decision, stay curious and actively seek other options, because you might be wrong and something new and unexpected might present itself.
I spend the whole time trying to prove myself wrong and I firmly believe that this keeps you learning rather than doing the same things over and over again. Ask yourself: “What can I do differently to stay relevant?” It’s easy to get comfortable in a position, but it’s important to keep switching things up and staying hungry when it comes to new skills, talent and tech. That's how you get better in your role.
What has been your biggest challenge in your career and how have you overcome this?
I really believe in diversity because there are many occasions when I’ve been the only non-white person at the table. I’m privately educated through a combination of a scholarship and a government-funded assisted place. The observation that I make about this is that private school taught me to speak like a posh white Scottish man. When working on a graduate scheme with a large firm, one of the first things someone said to me was: “You sound different to what you look like.” Even quite recently, someone said how I sounded on the calls didn't match up to my appearance. Clearly it’s a theme, but I made a decision a few years ago not to let it get to me and have my own agency over it.
The minute I think that something negative has happened to me because of my race, I'm disempowering myself and, as the years have gone on, I've done ok in my career. I do now reflect on past professional challenges and think they happened because I presented differently to what people thought I should. It's something I've become more aware of in the past couple of years than the previous 20, probably because I'm in a position of more significant seniority now I won the battles I needed to. Appalling incidents such as what happened to George Floyd gave me, and many other people, pause for thought.
I really do think a lot though about diversity - whether it’s racial, gender or neuro cognitive - and what it means. It’s about not trying to fit the mold but being able to see situations and problems through different lenses to find the best solutions.
It’s also not about being blinkered but being open to new ways of thinking. Companies looking for people to ‘fit’ are actively opting out of diversity. The right thing to do is to seek out ‘not fit’. Seek out the friction. And yes, you might make a mistake and it might be too much friction but I fully support the importance of surrounding yourself with people who come from different backgrounds and think differently. It’s where new ideas and innovations are sparked. This doesn’t happen when the same people from the same background are sitting in the same room as one another, churning out the same old ideas.
And now for our quick fire round:
Best podcast you have listened to in the last 12 months?
Secret Diary of a CEO’s episode with Professor Tim Spector who set up blood sugar sensor ZOE. That half hour has completely changed the way I eat and look at my diet.
Favourite holiday destination?
I love the Caribbean, it’s the place where my heart resides. Cuba is wonderful, as is Jamaica. We’re looking forward to our first family holiday to the Caribbean, this time in Antigua in October. We love to travel and try to go away three or four times a year.
A funny fact that most people would be surprised to know about you?
I was asked by my school maths teacher to judge The Times National Crossword Championship. It’s timed, and the teams have two people. When it’s tight, you have one person finishing the clues and their partners sprinting down the auditorium towards you in a bid to submit their answers first as it’s the quickest team who wins. That level of physical exertion wasn’t something I expected to see in a crossword tournament! I earned £15 an hour for the honour, which was a lot of money in 1996!
A big thank you to Sheraz for contributing to our MERJE Meets series with this fantastic article! If you'd like to share your thoughts on any aspect of the industry, get in touch - marketing@merje.com
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