How Future Finance became the biggest player in a $34B market

by Michael Hines
June 18, 2018
Liliane Gao Future Finance Chief Credit Officer
PHOTO VIA FUTURE FINANCE

The cost of higher education is becoming a big problem in the United Kingdom, where tuition fees have risen sharply in recent years. Compounding this problem is a lack of financial institutions with experience lending to students, many of whom have no credit history.

Future Finance launched in 2013 specifically to address this problem. The Dublin-based company provides loans to students that range in size and are designed to pay for everything from living expenses to tuition costs. According to a recent article in the Irish Times, Future Finance expects to issue between $53 million and $94 million worth of student loans this year, with that figure set to more than double in 2019.

Spearheading those growth efforts is chief credit officer Liliane Gao, whose team is tasked with developing the credit policies and lending procedures that will help the company hit its goals. Gao is uniquely suited to the challenge, having led teams at two of Chicago’s biggest fintech companies: Avant and Enova.

We recently spoke with Gao to learn more about Future Finance, her leadership style and how she approaches team building.

 

What was it about Future Finance and this opportunity that made you want to join the team?

First, I was excited about the company’s mission to help students achieve their educational goals. Second, unlike in the United States, the student lending market in the United Kingdom is a relatively untapped space with proven and massive demand. And finally, Future Finance has solid financial backing and an experienced management team, which I am excited to be part of.

 

The U.K. instituted tuition fees in 1998, but student lending has really only taken off over the last few years. What’s it like to work in such a young and rapidly developing space?

It’s exciting because of the massive demand: It’s a £25-billion ($34 billion) market that keeps growing as tuition and living cost continue trending upward. It is also challenging for lenders to enter because student lending in the United Kingdom is a recent phenomenon. Traditional lenders don’t know how to underwrite loans to young students with a thin credit file or no file. This puts Future Finance at a unique advantage because we’ve been lending to students in the U.K. since 2014. We are the expert and have developed proprietary models and strategies to underwrite high-quality loans.

I believe the key to building a successful team is to hire the right talent and keep them challenged and inspired.”

Can you describe your role as chief credit officer and what your team is currently working on?

My responsibility is to manage and mitigate the company’s credit risk. I work with a team of credit and analytics experts to develop appropriate credit policies and lending procedures to support the company’s strategic goals. Right now we are focusing on improving credit strategy to underwrite good-quality student loans and to ramp up volume as we enter the peak season. In the longer term, we will develop additional credit products to better service our customers and to support the company’s strategic mission.

 

How do you approach team building, and what do you look for when hiring?

I believe the key to building a successful team is to hire the right talent and keep them challenged and inspired. Within the team, I promote over-communication and “obligation to dissent,” the latter of which is one of the most valuable takeaways from my time at McKinsey. In addition, we have various team outings and social events to keep the work fun. In terms of hiring, I always look for smart, self-motivated people with strong analytical skills.

 

Can you describe your leadership style and what’s shaped it?

I value my team’s input and listen to their ideas. I am also methodical in nature and believe in making data-driven decisions. This probably has to do with my doctoral training in a natural science field. I am a big fan of experimenting and learning. Also, I started my career as a data scientist, and I still like to roll up my sleeves and get to the details when needed.

 

What advice would you give to those who want to work in fintech or who are just starting their careers?

A willingness and ability to adapt to changes is very important. Many fintech companies, especially startups, often face changes due to market trends, capital environments or simply the company’s growth. Those who embrace change are more likely to succeed.

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