just a thought

Originally @ TechCrunch The future of American fintech may hang in the balance of a pitched battle that has grown in intensity over the past four months. An obscure request for comments on regulatory standards, released by the Office of the Comptroller of the Currency (OCC) last March, has since evolved into a complex turf war between the states and Washington, DC. Caught in the middle is the entire online finance industry, raising the question of just what a “fintech” business really is. Though it hasn’t made many national headlines, this fight may determine the future of innovation, competition and survival in the fintech world. The debate centers around  a proposal  made in December by Thomas J. Curry, the Comptroller of the Currency, in which the OCC details a program for fintech companies to apply for charters as “special purpose national banks.” The charter, which is  optional for fintechs , is meant to provide companies with a stamp of approval from the OCC...

Originally @ Lending Times The most successful online lenders frequently reach a point where they are faced with a question: Continue developing domain expertise over one’s geography or expand internationally? Last year, we covered in-depth the kinds of markets that online lenders can expand into in a three-part series ( part 1 , part 2 , part 3 . ) Yet, when a company makes a decision to expand, this still leaves a big question open: How will they do it? Most marketplace lenders come to a three-pronged fork in the road: Expand by partnership, by acquisition, or by colonization. Partnering into a Market The first type of expansion is the most low-risk and the fastest to successfully undertake. A successful online lender looking at new geographies also faces a significant slate of new risks should they choose to expand without fully understanding the new market. If they partner with an existing player – whether another lender or an established financial institution – they mitig...

Originally @ Lending Times Funding Societies  is setting out at a breathtaking pace to reshape small business finance across southeast Asia. The wave of peer to peer lending that has seen notable success across the US and Europe has yet to crest in many other markets. However, predicated on the models of companies that created an online business lending market worth an estimated $ 230 billion  in 2015, Funding Societies is aiming to change that. We got a chance to sit down with  Kelvin Teo , the co-founder of Funding Societies. As he describes it, his dynamic company had humble beginnings as a project at Harvard Business School. “My first co-founder Reynold Wijaya and I launched a peer-to-business (“P2B”) lending platform in Singapore at the dorms of Harvard in early 2015,” explains Teo, “Iwan Kurniawan later joined us and started Funding Societies Indonesia (also known as Modalku or My Capital in  Bahasa  language), and Wong Kah Meng soon came onboard wit...

Originally @ Lending Times In our first two perspectives on peer to peer lender expansion into international geographies, we looked at metrics that marketplace lenders evaluate when expanding into ancillary Tier 1 (similar) markets. Expansion into new markets is a great way to diversify borrowers and potentially lower credit risk and market exposure. It also augments a lender’s customer base, which is important for continued growth. As Samir Desai, CEO of Funding Circle, commented when they moved into the US market by acquiring Endurance Lending Network, ““The market size in the UK alone has felt gigantic to us. That’s the reason why we haven’t had to go to other countries. We didn’t have to go to the U.S. but we felt it was a huge opportunity and are quite excited.” Though there are numerous criteria relevant to choosing how to expand a lending business, the most important are 1) credit metrics, 2) legal and regulatory environment, 3) online penetration and trust, and 4) curren...

Originally @ Lending Times ( Read part 1 here ) International expansion is critical to the ongoing development and growth of marketplace lending businesses, especially those based in smaller markets. As Dr. Gal Aviv, the CEO of BLender, put it, “Offering multi-national P2P lending has been our vision since BLender’s establishment. Since our Israeli launch in 2014, we have built the foundation, infrastructure and technology to enable BLender to operate in the global market, so we will be able to face operating, cultural, technological, regulatory and taxation challenges.” This expansion is usually easier said than done – as referenced above, there are significant operational hurdles to expanding the same business model between two distinct countries. There are 1,000’s of marketplace lending services around the world ( 1,500 in China alone ) – and it is unclear how many of them operate across borders. Some of the most notable lenders that have expanded internationally are Bondora (...

Originally @ Lending Times Online marketplace (or peer to peer) lending exploded in size, growth, and ubiquity over the past decade. An April report by American Banker quantified this growth at 700% over just 4 years – not uncommon for a relatively new market like online lending, but impressive nonetheless. Yet the meteoric rise of this industry has been contained to a few relatively homogenous, developed credit markets. As online lending reaches its adolescence and moves past what critics dismissed as its ‘fad’ phase, a lingering question remains – which markets are next? The opening bell for marketplace lending rang in 2004 when the consumer lender Zopa launched in London. Soon after in 2005, Prosper Marketplace was founded in San Francisco. The original marketplace lending model was a variable rate auction market, much like an Ebay in which lenders and borrowers could bid to provide and receive loans. The idea was to create something similar to a community credit union, online...