Ishaan Malhi told BLM: “Our mission is to make mortgages fairer. There is a massive power imbalance between customers and other players in the market.”
He left his banking job to found Trussle in 2015 – the first digital disrupter of the mortgage sector. Now Ishaan is on a mission to make mortgages more accessible and to save consumers thousands of pounds each year.
What was your background before founding Trussle?
My background is quite closely related to what I do now. I worked in the mortgages team at an investment bank, Merrill Lynch, working with a lot of building societies and banks. And I was also working quite closely with technology companies, both investing in them and supporting them. So it was the confluence of those two things which led me to start Trussle, knowing that technology could improve the customer experience in the mortgage world.
The actual trigger, though, was going through the process myself. I couldn’t make sense of it: I had an economics degree, I actually worked in the industry myself, so I felt confident that I could navigate that process. And when I couldn’t, when I was passed around and overwhelmed with information without context, I thought: how do other people cope with this?
I didn’t end up getting a mortgage from that process. I was self-employed at the time, and self-employed people were ostracised by the mortgage industry. So at Trussle, we aim to make mortgages more accessible to these neglected groups.
Why is there such a prejudice amongst mortgage suppliers against the self-employed?
I think it highlights a real conflicted message from all areas. On the one hand, we’re celebrating entrepreneurship, business innovation, SMEs – and businesses like Funding Circle and OakNorth, and even big, traditional banks, are doing more to accommodate small businesses.
But the sector is neglecting other parts of entrepreneurs’ livelihoods, such as access to a more conducive mortgage process. And that means that business owners, who are probably stressed enough already, are prevented from living healthy, rounded lives.
This is just one segment of society, too. You’ve got first time buyers, those owning into retirement, people who have thin credit files, people coming into the UK. And even amongst permanently employed individuals with good credit, there’s a clunky, offline process which just doesn’t align with modern consumers and their expectations of products and services. It sounds nuts that in two taps, you can book accommodation anywhere in the world, but you still have to go down to your local branch to get a mortgage.
What have been some of the challenges of starting a fintech company?
There are challenges in starting any business, and then there are specific challenges to fintech.
In terms of any business, company-building and scaling culture are a challenge. We’re now 100 people, and when we were 10 people we knew everyone very well. We had a very close culture. And when we grew to 100 people, it was really difficult to scale that.
We try to assume a collective responsibility to co-create and perpetuate that culture. But it’s tricky, and sometimes you can hire someone who’s good at the job but not as mission or as values-aligned as you would like. So now we do explicit cultural fit interviews to ensure those things are aligned.
Another challenge is building trust. Choosing a mortgage provider is one of the biggest decisions you will make, and to trust a new brand which has a logo and a colour palette that are very different from traditional mortgage brokerage brands – it requires a lot more effort on our part. We’re going out there as Trussle, with a pink logo with represents an open door, and we have to work to win trust in the market.
Do you find that you’re more popular with younger buyers?
No. Quite the contrary. If you think about younger buyers, they might be more digitally savvy, but they’re going through this process for the first time and therefore looking for more support. But this market has been so starved of convenience, ease of use and speed, that our average customers are aged 35-50.
What are you excited about in fintech right now?
I’m really excited for how the new fintechs collaborate with each other. The mindset is one of community – you can’t imagine the CEOs of HSBC, Santander and co being in a room and helping each other out in the same way that we do.
What are your thoughts on diversity in UK business?
The UK can be a brilliant place to start a business – one of the best places in the world. But for that you need buy-in, cooperation and collaboration across different individuals and sectors, and we can always do more.
Diversity also shouldn’t just be in the vector of ethnicity. We should also think about gender diversity, personality diversity, cognitive diversity. You can’t have a team of 100 people that are all different nationalities but all introverts. Similarly, you can’t have 100 people from 100 nationalities, half of which are introverts, half of which are extroverts, but all of which are male.
Diversity is multifaceted and there is much more that people can be doing. But if I think of my own journey in business, I think it’s much more in the vocabulary of start-ups and established companies than it was four years ago.
You’ve been pushing for a Mortgage Switch Guarantee. Can you explain what that would entail?
The Mortgage Switch Guarantee is a set of standards that we proposed following thorough quantitative and qualitative research. The research was with regulators, lenders, and consumers, and also looking at our own data sets.
What we recognised was that a huge portion of society is overspending by up to £4,500 each year by lapsing onto their variable rate. They are not switching their mortgage to a better deal when they would be financially better off by doing so. And that’s not right. That doesn’t sit well with me; I don’t think it’s fair that banks have structured their products in such a way as to profit off customers losing out. It’s a zero-sum game: the banks wins when the customer loses. And that’s a fundamental misalignment of interests.
In our product, we constantly monitor your mortgage and automatically switch you if we find a better deal. You never overpay. But there’s only one of us in the market and there are many more providers, so we want this to be an industry-wide change.
We’re putting forward this set of proposals that we want the government to introduce – the Mortgage Switch Guarantee – just like there are already protections for switching current accounts and energy providers. The only difference is, you can make ten times the savings from switching mortgages.
What are you passionate about outside of Trussle?
I recently got married, so I’m looking forward to the next part of that journey. But I also love boxing. It challenges people mentally and physically and it epitomises so many human characteristics in their rawest form.
What are your plans for the next few years?
I’m very committed to Trussle. We have a huge opportunity to solve a big and meaningful problem in an industry that hasn’t changed for decades. And we have a commitment to consumers to finish what we started.
This is an industry where £240bn of loans are originated each year through a nightmarish process. And even with the success we’ve had since we launched, we’re nowhere near where we want to get to. We have barely scratched the surface. And if we are to have the impact that we want to have on the industry and society and the world, we need to buckle in for at least the next 5-10 years.