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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!


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The Fintech sector is set to improve in 2020 with the application of Artificial Intelligence as well as Machine Learning. Fintech is transforming into a fourth platform providing embedded financial services to its clients. Embedding of AI and Machine learning results in increased accuracy, more personalized services, enhanced customer experiences, reduced risks, and time-optimization. They are poised to be game changers in how lenders will evaluate borrowers and the time taken to complete an application. Thin credit files can now be offered credit by leveraging alt data evaluated through AI ML. 

Daniel Pinto, the co-president and chief operating officer of JPMorgan Chase shares his outlook for 2020. He anticipates the consumer and the corporate sectors to remain positive, being driven by a number of factors. The retail banking business is expected to face head-to-toe competition with various tech players such as Google, Uber, and Facebook. He acknowledges that digital banks have increasing valuations with a rising number of clients. As the digital banks increase in size and significance, he expects them to be held on to the same high standards of traditional retail banks.

The global financial services sector is set to enter a new decade of innovation. The P2P grew substantially in the past when the banks were not lending, the P2P lenders deploy data-driven credit models and have much lower operating costs with no branches. The opportunities for retail and SME lending continue to grow with a number of traditional leaders as well as new entrants in the market. The banking industry has been transformed with several challenger banks in the market. The market leaders include Chime, Revolut, and Monzo and have been attracting a number of customers.[/vc_column_text][vc_single_image image=”10296″ img_size=”large” alignment=”center”][vc_column_text]

The Hebei province of China has shut down all the P2P lending platforms as a part of the efforts undertaken by the regulators to clean the fraud and mismanagement in the industry. Hebei is the second province in China to outlaw the P2P business after Hunan, which imposed the ban in October 2019. Around 6,000 P2P platforms have missed payments to investors, mostly individuals, stolen funds and suddenly suspended operations, putting over $30.7 billion of investments as a risk. 

The Bank of America announced that its Artificial Intelligence (AI) – driven virtual financial assistant, Erica surpassed 10 million users since its launch in June 2018. The AI-driven virtual financial assistant is set to compete 100 million client requests. Erica has also undergone a massive evolution and is set to introduce various enhancements with a number of insights features, offering the clients more personalized and proactive guidance. This should act as a major moat for the lending business, as Erica would be on hand to both offer and tailor any loan packages for the clients. 

P2P lending is one of the most prominent sectors of Fintech and has been a net positive for both the credit markets and small investors seeking higher returns on their money. The UK Financial Conduct Authority (FCA) announced various rules in June 2019 which have come into effect on 9th December 2019. The P2P lending platforms in the UK have majorly welcomed the regulations believing that the regulations have put the P2P at par with the mainstream financial sectors. The rules primarily relate to investor classification, governance, regulatory controls, and overall risk management. [/vc_column_text][vc_single_image image=”10297″ img_size=”large” alignment=”center”][vc_column_text]

Chime has raised $500 million in a Series E round of funding and is valued at $5.8 billion as of December 2019. The online banking service provider offers no-fee accounts, free overdrafts, and early direct deposit options to its customers. Chime has increased its account base from 1 million last year to around 6.5 million in December 2019 and is adding over 150,000 deposit users a month.

The UK Financial Conduct Authority (FCA) has introduced new rules regulating the P2P lending following the failure of Lendy, the P2P network that collapsed with £165m in outstanding loans in early 2019. Ahead of the implementation of these rules, Plum (AI-powered savings application) has ended its partnership with the P2P lending platform Ratesetter. The partnership was launched in 2017 and allowed Plum’s users to invest in Ratesetter’s loans. The UK is not cracking down on the sector, but ensuring that the house is in order. But what this means for the growth of the industry will be confirmed only in the coming months. 

Zopa raised £140million, it’s largest funding round to date from IAG Capital. The capital will enable its new banking platform to fulfill its regulatory capital requirements. To date, Zopa Limited has lent £5billion in unsecured personal loans to the customers in UK. This acts as a huge vote of confidence for the industry in general and Zopa (the market pioneer) in particular. 

The Funding Circle made two key changes to its secondary market loan offerings. The first change will result in Funding Circle to switch from a first-come, first-served basis and introduce a tool that will cycle round all the investors wishing to sell loans as many times as possible. This change will provide the investors access to funds more quickly and regularly. The second change will witness Funding Circle introducing a seller’s fee, meaning there will be a transfer payment of 1.25% which will go to the buyer of the loan and will bring the P2P lender on track with how other platforms manage their secondary market.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_custom_heading text=”Learn about MonJa’s Statement Spreading Automation for bankers & lenders.” font_container=”tag:h4|font_size:16|text_align:left|color:%23000000″ google_fonts=”font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:700%20bold%20regular%3A700%3Anormal”][vc_custom_heading text=”Request Free Demo Today!” font_container=”tag:p|font_size:22|text_align:left|color:%23000000″ google_fonts=”font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:700%20bold%20regular%3A700%3Anormal”][/vc_column][vc_column width=”1/2″][vc_column_text][yikes-mailchimp form=”10″ submit=”Schedule a Demo Today”][/vc_column_text][/vc_column][/vc_row]

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