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MonJa’s Digital Banking and Lending Monthly Roundup – Why Subscribe?
Digital banking and lending is evolving rapidly. Recent fintech-banking partnerships and innovation in technology with the introduction of AI, ML and blockchain herald a new era in lending. Fintech’s are changing the competitive ecosystem, empowering lenders to process loans faster and smarter. In a world full of noise, understanding how the technologies and developments may impact your financial institution’s credit decisions and credit portfolio is of critical importance. With MonJa’s Digital Banking and Lending Monthly Roundup, it’s easy to stay up to date on what’s happening in the space. Get the latest updates, analysis and commentary on digital banking and lending segment!
1). 10/28/2019 Uber announces deeper push into financial services with Uber Money (CNBC)
The secret is out and the ride-sharing giant has formally launched Uber Money. It will be offering a digital wallet and debit and credit cards. It has a captive audience of over 4 million drivers and couriers. Uber Money’s head Peter Hazlehurst is of the opinion that this can translate into a bank account offering for its customers as well. The debit card is linked to an account provided by Green Dot and also has a $100 no-fee overdraft feature.
2). 10/28/2019 Real Estate Fintech PeerStreet Raises $60 Million in Series C Funding (Forbes)
PeerStreet, the real estate fintech startup has raised $60 million in Series C from multiple investors including Andreessen Horowitz, World Innovation Lab, and Thomvest Ventures. Launched in 2013, PeerStreet is an investment platform that aggregates real estate debt and then offers investors for investment. It has crossed $3 billion in lifetime loan volume. $1 Billion was executed in the last 6 months alone.
3). 10/24/2019 OnDeck Q3 2019 Earnings Results Recap (Lend Academy)
OnDeck, the leading small business loan provider, released its Q3 2019 results. The numbers were largely positive. It posted a net income of $8.7 million and gross revenues of $112 million. The net income saw a 100% jump. Originations were up 6% from the previous quarter at $629 million. OnDeck bought back $11 million worth of shares under its $50 million share repurchase scheme announced in Q2.
4). 10/22/2019 US Bank Removes Branch Jobs Amid Changing Customer Behavior (LendIt)
US Bank is cutting 10-15% of its 3000+ branches and laying off thousands at its local branches. Wells Fargo analysts’ predicted 200,000 job losses in the sector due to technology-powered banking. The writing is on the wall and it is imperative for financial service providers to realize that digital banking is not the future but the key to surviving the present.
5). 10/21/2019 Keys to small bank’s survival: One regulator’s view (American Banker)
American Banker reports on Julie Stackhouse’s (EVP of Supervision, Credit, Community Development and Learning Innovation at the Federal Reserve Bank of St. Louis ) discussion at a community banking event that centered on how small banks can survive the new digital future. The regulator is “sensitive” to the community banks’ concerns but the challenge is how to ensure an even playing field without stifling innovation. The discussion focused on demographic evolution along with the technologic revolution driving the industry.
6). 10/17/2019 PayPal’s Synchrony pact gives rise to a Venmo credit card (American Banker)
Though Paypal dominates the B2B segment, Venmo has been critical to Paypal being able to touch base with the retail segment. Now going one step further, Paypal is joining forces its consumer credit partner, Synchrony. It will launch a Venom Credit Card in the second half of 2020.
7). 10/09/2019 Stripe: Parallel Lines (Financial Times)
Stripe has been focused on becoming a full-service financial partner for its users. Accepting Bitcoin (though it has been now curtailed) was a strategic move to highlight that Stripe is innovative and will cater to a larger segment of the population than its peers. Now, its entry into lending has raised questions on whether it is a smart move, especially with a recession/slowdown imminent. The FT’s analysis goes into the journey of Amazon, Paypal, and Square and how credit is critical for not only generating a new source of revenue but ensuring customer loyalty.
8). 10/04/2019 How Small FI’s SMB Lending Journey’s Nudge The US Toward Open Banking (PYMNTS)
Pymnts discusses in this analysis of how small banks and credit unions struggle to compete with fintech lenders. Players like Paypal and Square are now among the largest lenders to small businesses, earlier a domain dominated by small banks and credit unions. The emerge of the lending-as-a-service offering by fintechs is a lifeline that helps these small players adopt the latest tech without having to deploy hundreds of millions of dollars on building digital capabilities from scratch.
9). 10/03/2019 The Current State of Installment Loan Sector (Lend Academy)
LendAcademy analyzes the Current State of Lending Sector in this article. Debt consolidation loans offered by Lending Club, Prosper, etc. have been a boon for the market. The innovators have forced traditional lenders to incorporate digital lending, with Goldman’s Marcus being case-in-point. Though customers have saved millions of dollars in interest and fees by shifting from credit cards to installment loans, the writer feels that there is more innovation around the corner.
10). 10/03/2019 Digital and human: Inside BofA’s small business strategy (Bank Innovation)
Bank of America is now the largest top small business lender, dethroning the long-term incumbent- Wells Fargo. The amazing thing is that it has not gone full digital to achieve this title. It focuses on a “human-digital” approach where it combines digital underwriting with its small business specialists. It has over 3.4 million small business clients. Almost 27% of its consumer product sales are done digitally but this number is just 10% for small businesses.
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