Before Robert Bathurst (you’d know him if you saw him) became famous as the rich one of the three husbands in Cold Feet, his best-known role was in an 1980s advert for Barclays Bank, where he owned a company called Walton Mouldings.
On receiving a telephone order for 20,000 rubber ducks, he immediately calls his bank to see about getting a loan to bring in the kit required to do the job.
Asking very formally for “Robert Edwards, please,” he starts the conversation “Bob, it’s Richard” and goes on to quickly negotiate securing the funding he requires, an achievement that gets a sign-off like a footballer bursting the back of the net.
The whole concept of the advert was to reinforce how well the bank in question knew its customers, and how well in turn their customers knew their local contact.
Fast forward a few decades, and a great deal has changed in the financial world, especially with regard to local bank managers having the discretion that they had in “Bob’s” time to meet with and make independent lending decisions regarding your common or garden small business and its plans.
These days, a team of locally-based staff comes at a price in terms of both staff costs and human error, and in the relentless drive for greater efficiency, standardisation and centralised control within banks, local decision-making moved to a credit committee often hundreds of miles away from the area in questions.
Decisions in many aspects of finance are now based heavily on statistics and security ratios, with peer-to-peer lending providing perhaps the most extreme of this, albeit one that has become very popular.
This system relies heavily on credit scores and the views of investors who have never met the management of the business nor been to see its operations.
This computerised standardised version of lending has evolved a long way from the local bank manager actually coming out to see the business, and while it would be wrong to question it entirely, it does rather move away from the old adage of people buying from people.
If people do business with people they trust, how do you establish trust with a computer?
It clearly takes more time for potential investors of any hue to sit down with an owner-manager, talk through their ideas, experiences, challenges, concerns and opportunities and gather intelligence face-to-face than it does to get a computerised form filled in, and therefore comes with a great cost.
However, the understanding that you can gather of the person to whom you could be entrusting a large amount of money by doing just that could be invaluable in helping you make the right decision on their proposals.
Advances in technology have made a fantastic positive difference to pretty much every aspect of our lives over the last few decades, but it remains as important today as it ever was to remember just what a huge impact human intuition, empathy and inquisitiveness can have in the outcomes that follow all the decisions you make.