We are very excited for 2017! As we learned at the Lendit USA conference held last week in New York City, GOLDPoint Systems isn’t alone in this excitement. The conference’s keynote speaker, Prosper CEO Ron Suber, discussed his optimism for the future of online lending as well as some tips for lending companies to be “built to last.”
Being "Built to Last"
Suber said “Last year, for the first time, we saw some skepticism. From the press, from ourselves, banks, the leverage providers. Were we really trustworthy and transparent?” In 2016 there was certainly a shift in tone from banks and press alike, however, this tone has shifted once again. Banks are now looking to partner with lending platforms like Prosper. This shift was predicted last year by Karen Gordon Mills and Brayden McCarthy in their working paper “The State of Small Business Lending: Innovation and Technology and the Implications for Regulation.”
With this new phase, banks partnering with lending companies, the online lending industry is looking towards a bright future of growth as well as sustainability. Suber, in his keynote address, suggested five different ways that banks will engage with online lending companies:
1. Loan sales: Banks can purchase loans through online lenders.
2. Lenders as a Service: (private marketplaces) Online lenders connect to the bank, but the loan comes to the lenders in a software development kit. Lenders will service the loan while the bank funds it. This enables the banks to work through their regulators.
3. Vendor relationships: Banks can leverage and securitize loans and act as trustees working with the investors and the lenders.
4. Mergers and Acquisition possibility: Banks can fulfill the entrepreneur dream of acquiring funded companies.
5. Greenfield operations: Banks spend years and lots of money building their own online lending platforms.
Ultimately, Suber is optimistic about the future of online lending and suggests that lending platforms begin finding ways to partner with banks in order to achieve long-term profitability.
Scott Sanborn, CEO of Lending Club, also expressed his optimism at the Lendit conference. Sanborn used Amazon as an example of a disruptive company that formerly sold books exclusively, but now offers cloud services. He suggested that online lenders will need to use this example to change the way they do business in the future.
Lending Club was a notable platform that experienced some difficulties in 2016, yet Sanborn is still optimistic for the upcoming year. He discussed the growth that online lenders like OnDeck and SoFi have had and said that, ultimately, online lenders will need to think about “how they [can] unleash their platform potential and amplify their core ambitions.”
GOLDPoint is a big believer in the potential of not only our clients but online lending platforms in general. Which is why we look to the advice of experts like Ron Suber and Scott Sanborn so that we can do everything in our power to help you unleash your potential.
To watch Ron and Scott as well as other Lendit speakers, check out the Lendit Conference YouTube page.
Ron Suber: "Online Lending: An Industry Built To Last”