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ClearScore acquires Aro Finance but "consolidation not without risk"

ended 07. January 2025

With ClearScore today announcing the acquisition of Aro Finance, a large secured loan and finance provider based in Manchester, along with the tie-up between CheckMyFile and Haysto reported yesterday, Newspage asked experts whether we are likely to see more consolidation between data holders and financial service providers — and what the impact of this could be on advice firms and, ultimately, consumers? Will this kind of industry consolidation apply pressure on smaller brokers and does it signal the directon the FCA and lenders want the industry to move in over the coming years? Views below.

5 responses from the Newspage community

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Ken James
Director at Contractor Mortgage Services
Data is, and has been for some time, the currency of choice. And the more data, the better. The collaborations we are seeing were inevitable, the main issue is how will this impact on client outcomes and behaviours. Smaller brokerages like myself need to wake up to the fact that if we do not keep a close and personal relationship with our clients they may not stay clients for long.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
The acquisition of Aro Finance by ClearScore is another clear indicator of a shifting financial landscape. Data holders are increasingly aligning with distribution channels, preparing for a future where data-driven finance takes centre stage. This consolidation could deliver more tailored and timely outcomes for consumers, leveraging data to target services with precision. However, this trend is not without risk. The dominance of larger players may marginalise smaller, specialist firms, potentially limiting consumer choice and diversity of advice. Niche brokers, already grappling with the high cost of customer acquisition, face mounting pressure to compete with entities that have greater scale and resources. While the FCA and lenders may see this as progress, it’s vital to protect the bespoke solutions smaller firms offer. The industry must balance innovation with inclusivity to preserve consumer choice and diversity.
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Dariusz Karpowicz
Director at Albion Financial Advice
Money makes the world go round and, in the financial services sector, it seems to be spinning towards consolidation. ClearScore's acquisition of Aro Finance, hot on the heels of the CheckMyFile-Haysto partnership, shows that data-rich companies are hungry to expand their financial services buffet. While this trend might make smaller brokers feel like they're watching the big fish get bigger, it's not necessarily doom and gloom. These mergers could actually light a fire under the industry's collective bottom, spurring innovation and improved services. For consumers, having providers with both robust data insights and direct financial services could mean slicker, more personalised offerings - though we'll need to keep a watchful eye to ensure competition stays healthy and smaller players can still bring their unique flavour to the table.
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Darryl Dhoffer
Founder at The Mortgage Geezer
Data aggregators will always look to maximise their offerings and seek strategic partnerships with selected financial service providers. My concern is that the FCA turns a blind eye to fair and unbiased whole of market mortgage advice. There is something here of the CostCo wholesale approach, allowing only one door in and out and stacked to the rafters with CostCo's own branded goods. The worry is that, as consolidation intensifies, consumers could come out of the store with more than they wanted to purchase, and realising they have spent a bomb.
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Justin Moy
Managing Director at EHF Mortgages
There seems to be a shift in emphasis within our industry as significant data handlers are either acquiring or working closer with financial services providers, in their quest to further dominate the market. I suspect lenders and regulators will actually prefer fewer individual channels to manage or regulate, but that doesn't mean that the smaller independent firms are not capable of great delivery: they just don't have pockets deep enough to compete. Clients still prefer the personal touch, the ability to speak to the same person who has known them for a long time, dealing with the family finances and has a great understanding of the industry. However, in a world where AI, automation and social media dominate, we need to be even better at serving our clients and adopt some of the science these data handlers will inevitably be using soon.