Following on from our interview a few months ago, we caught up with Julian Cork, COO of buy-to-let mortgage platform Landbay, to learn about the significant changes the business is going through. He says it's all about the data.
Q: Can you remind us of Landbay’s story so far?
Landbay is a buy-to-let mortgage marketplace lender. We lend prime Buy-to-Let mortgages to experienced landlords across the UK via broker distribution network. We offer institutional investors direct access to these loans. Borrowers pay interest and our platform passes this interest to investors.
We completed our first mortgage in July 2014, began deploying institutional capital in July 2017. To date, we have completed over £450 million of specialist buy-to-let mortgages and we have had zero defaults. Attention to underwriting quality is a key differentiator for our investors.
Q: How is Landbay using data to make decisions, mange risk and drive scale as a hypergrowth FinTech?
Our vision at Landbay is to be the leading buy-to-let mortgage lending platform – that means being the go-to lender for brokers and the partner of choice for investors in these mortgages.
Today we are making good headway. Our origination volume and distribution network continues to expand, in July this year we signed a landmark £1bn funding agreement in partnership with an established global financial institution and we have been recognised by the industry earning 5 “buy-to-let lender of the year” awards over the past 12 months.
In addition, with our 1000%+ growth over the last two four-year periods, we have earned spots on Deloitte’s “fast 50” awards – which recognise the UK’s fastest growing companies – in both 2018 and 2019.
Q: What makes Landbay unique?
The key difference with Landbay is our marketplace funding model. The marketplace has two sides: lending and funding. Our different funding channels have different product and risk appetites, and our model enables a single face to market for multiple product combinations. In turn, this enables a positive broker experience while delivering to specific investor appetites.
Data is central to this vision. Our allocation based on credit appetite enables Landbay to have a wide origination footprint and our systems and data capabilities are critical to manage this.
Q: Many companies, and certainly all FinTechs, are ‘doing’ data nowadays. But what makes Landbay truly data driven?
Landbay’s platform is built on a microservice architecture that includes over 20 databases. We also use a variety of SaaS tools – including NetSuite ERP, Segment, and Google Analytics – to power business operations. Our core Marketplace Technology platform has been featured as an Amazon Web Services Case Study. Business events processed by our micro services are captured and passed down a pipe into our large Redshift database. We have implemented the Looker data exploration and visualisation tool over this database to make the data accessible and actionable to everyone in the company.
Having this depth of data in our reporting systems lets us do some interesting things to manage risk for our funding partners. A good example of this is our stratification reporting capabilities: looking at volumes of mortgages over metrics such as loan size, LTV, region, rate etc. Stratification reporting is a key measure for risk management mortgage portfolios and Landbay’s data solutions enable us to review these types of metrics in real time and break them down by funder to report on risk held in funded mortgages.
On top of this, Landbay also has “walk forward” capabilities, linking our future pipeline of new mortgages to the completed cases in our reporting tools. This enables us overlay new and offered loans on top of the completed mortgages. We can then analyse the future stratifications and act to manage the shape of our portfolios by changing origination plans and allocations to optimise portfolios.
All our data – from sales order value reporting and broker performance to marketing campaign efficacy and core risk reporting – is accessible on the platform. We have a cadence of daily, weekly and monthly scheduled reports arriving in people’s inboxes, and everyone at Landbay has access to the tool directly so each person is empowered to explore and analyse data to support their decisions and direction.
This is a very important point: we are building a data-driven culture without a massive data team – in fact we only have a three-person team to meet the data demands of a fast-growing, 100+ person company.
To use data effectively in a scaling organisation, of course you need to have the right technology stack and architecture, but the key is to democratise your data. This means demystifying data for everyone in the organisation, giving everyone access and empowering people to conduct analysis and make data lead decisions. This enables a data-driven culture, and works well with Landbay’s overall flat, collaborative structure.
Q: Can you tell us a bit about your plans to grow further as a specialist buy-to-let lender?
Landbay is solely focused on the Prime Specialist BTL Market – this consists of lending to portfolio landlords, properties held in SPVs and property types ranging from standard residential properties to HMOs & MUFBs. The overall UK BTL mortgage market is expected to maintain circa 3% growth per annum, seeing total outstanding move from £244bn to £285bn.
However, over the next five years Specialist BTL outstanding will grow at a disproportionate rate, from £27bn to £76bn – an increase of circa £50bn. This marks an annual growth rate of 21%. In 2019 Landbay has earned a strong reputation in this sector of the market evidenced both by increasing volumes and our numerous awards.
The growth of both marketplace technology and specialist BTL lending points to continued significant growth for Landbay. As we onboard more funding partners and increase our volumes, the investment we have made in our data technology and importantly our democratisation of data across the organisation results in people feeling empowered to get the best outcomes for Landbay and base strategy and decisions on tangible, accessible data.
You can read more about Landbay on the company’s microsite.