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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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Bill Wallace, JP Morgan Chase’s head of digital for consumer and community banking discusses the bank’s digital priorities for 2020. Making the banking app more personalized is priority number one. This personalization will be centered around the user data which allows the bank to generate lending and investment offers specific to each user.  Data privacy, especially with respect to linking with third-party apps, is another critical area for the team. JP Morgan has over 50 million digital customers and investing to ensure they have a seamless and secure digital experience is critical for JP Morgan’s continued success.

Royal Bank of Scotland (RBS) has launched Bó, its standalone digital bank. Meant for competing with digital upstarts like Monzo and Starling, the app focuses on helping users’ budgets and saves better. RBS is structuring it as a stand-alone brand so that there is no legacy overhang of the parent company. Its target will be Brits with saving less than GBP 100, an over 16 million strong customer market.

Anthony Jenkins, the founder of 10x Future Technologies and former CEO of Barclays, writes a thought-provoking article in Quartz about the demise of the traditional banking industry in the UK and the growth of Digital Banking. He starts off with how deregulation and profit at any cost model of traditional banks led to scandals like outrageous overdraft fees, labor scandals and misselling of financial products.  He then discusses in detail how digital banks and fintech startups are disrupting the status quo and “open-sourcing” money by launching digital-first products at a fraction of fees costs charged by banks. He predicts that mortgage, which currently takes 40 days to process will be completed in 10 hours by fintech players in the near future. 

The UK marketplace lending sector is expected to grow to $7.5 billion in 2019. This was detailed in a Marketplace Lending Report by Brismo and Link Group. The sector will witness a 16% growth with property lending a major driver of expansion. But the report also analyzes the key challenges facing the industry. Risk management, loan servicing, and recovery are still grey areas for this nascent industry. As the economy dips into a slowdown/recession, fintech’s ability to grapple with these issues will be critical for long term growth.[/vc_column_text][vc_single_image image=”10104″ img_size=”large” alignment=”center”][vc_column_text]

BlueVine offers lending (term loans, factoring, etc) and other allied financial services to Small and Medium businesses. It has raised a massive $102 million Series F round from leading investors- ION Crossover Partners, Lightspeed Venture Partners, Menlo Ventures, 83North, SVB Capital and others. It has now raised a total of $250 million in equity and $500 million in debt. It has originated over %2.5 billion in debt from over 20,000 SMBs. It is looking to at least double its revenue this year. It is focused on capturing market share as compared to being profitable at the company level currently.

The Philadelphia Fintech Conference is now a firm fixture for the big fintech. Max Levchin, Paypal co-founder and currently founder-CEO of Affirm, is looking to “remake consumer finance from the ground up.” The 7-year-old consumer finance startup has partnered with Walmart and is aiming to disrupt traditional finance players dependent on the “fine print” to generate revenue and profits. He alludes to the shift in the mindset of the customer. He believes if the millennial can’t understand the product in 10 seconds, he will not choose the product.

The management consulting firm Bain has come out with a report that can be extremely discomforting for the banking industry as a whole. In its annual retail banking report, 62% of those surveyed were happy to buy a financial services product from the big tech. This number jumps to a whopping 75% for millennials and Gen Z.   Google, Apple, and Facebook are at different stages of launching financial products but the writing is clear. Big tech will be muscling onto the financial services industry. How it impacts the current fintech scenario is difficult to predict. The Bain report predicted that the retail bank’s strategy should involve partnering with big tech. The tech’s high net promoter score means that they are a valuable distribution channel and the first movers’ advantage would be critical for the long term growth of current incumbents.

Wall Street Journal does a deep dive into the future of bank branches in today’s digital world. Branches closing are the new normal as branches are simply unable to generate the return on investment needed for a brick and mortar layout. It details efforts of 2 financial services players, Capital One and PNC[/vc_column_text][vc_single_image image=”10103″ img_size=”large” alignment=”center”][vc_column_text]Bank trying to experiment to ensure that branches remain relevant in the digital future. From coffee machines to make the branch look less intimidating to community events to draw interested clients, branches are pulling all stops to differentiate themselves as a high-touch point alternative to digital banking. The question is whether this is scalable?  

       The lending industry is heating up again. Not content with disrupting the financial services industry with its rock bottom brokerage rates, Charles Schwab is looking to shake up the lending industry as well. It will start with mortgages, unsecured loans to its clients and loans to advisors’ firms as well. This will be extremely interesting as it already has an in-built audience which can be monetized rapidly. 

       Apple Card might have been caught in gender discrimination issues at its launch but it has not stopped the Apple juggernaut from posting stellar numbers in the quarter ending September 30th. The card launched in partnership with Goldman Sachs has originated over $10 billion in credit lines and $736 million in loan balances. Tim Cook (CEO of Apple) also disclosed that the launch of Apple Card was the most successful in the history of the industry.  [/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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