Jason Mullins


Clive Kinross

CEO & Co-Founder

Katerina Kindyni

Senior Manager, Financial Services Risk Management

ROE in Consumer Lending: 2023 Lenders Summit


Continue the conversation and explore the latest in consumer lending technology and innovation at the 2024 Bankers Summit in May

Bankers Summit

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Panel Summary: 

Two CEOs discuss how to best service the needs of consumers across the credit spectrum. How do we make sure that Canadians have open access to credit. What is the impact of the rising cost of capital. How do you calculate risk. What is required Return on Equity (ROE) for a lender?

Navigating Economic Headwinds
The summit opened with an overview of the current economic climate, marked by high inflation, geopolitical tensions, and technological advancements. The panelists, including industry leaders Jason Mullins and Clive Kinross, delved into how these factors impact consumer access to credit and lender profitability.

Challenges Facing Lenders and Consumers
Jason Mullins highlighted the rising cost of capital, which increases borrowing costs and pressures lenders to optimize their operational models. Clive Kinross echoed these sentiments, emphasizing the squeeze on margins due to fixed-rate product offerings and the overarching impact on consumers, especially those with nonprime credit scores.

Regulatory Landscapes and Market Dynamics
The discussion shifted towards the regulatory challenges and market trends shaping the lending environment. Both speakers stressed the significance of balancing regulatory compliance with the need to provide accessible credit.

Regulatory Pressures
Kinross pointed out the implications of lowering the maximum allowable interest rates, which could restrict credit access for higher-risk borrowers, pushing them towards more expensive or unregulated credit solutions.

Market Responses
Mullens and Kinross discussed the unintended consequences of strict rate caps, such as reduced competition and innovation, potentially leading to a more constrained lending environment that could adversely affect consumers.

Embracing Innovation and Efficiency
Technology and innovation emerged as pivotal themes, with both CEOs emphasizing the role of digital transformation in addressing operational challenges and improving credit decision-making processes.

Innovative Approaches
The panel highlighted the adoption of advanced analytics, AI, and automation to enhance efficiency and risk assessment, underscoring the importance of continuous innovation to maintain competitive edges and meet consumer needs effectively.

Future Directions
Despite technological advancements, both leaders expressed concerns about the macroeconomic uncertainties and regulatory changes that might hinder the industry’s growth and innovation.

Looking Ahead
Concerns and Aspirations In the final segment, Mullins and Kinross shared their personal insights into the future, voicing concerns over the broader economic landscape, particularly the potential impacts of rising interest rates on household debt and mortgage renewals.

CEO Perspectives
Both CEOs expressed a cautious outlook for the Canadian economy and the consumer lending sector, highlighting the need for prudent management and strategic planning to navigate forthcoming challenges.

Call to Action
They called for a balanced approach to regulation, one that protects consumers while ensuring the sustainability of the lending ecosystem, emphasizing that constructive dialogue between industry players and regulators is crucial for fostering a healthy financial environment.

A Path ForwardThe 2023 Lenders Summit shed light on the intricate dynamics of consumer lending, underscoring the need for adaptability, innovation, and collaboration among lenders, regulators, and stakeholders. As the landscape continues to evolve, the insights shared by industry leaders at the summit will undoubtedly play a crucial role in shaping the future of consumer lending in Canada and beyond.