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Monday, June 15, 2015

Don’t Let Automated Digital Lenders Steal Your Revenues

The article, Automated Lenders Threaten to Eat Bank’s Lunch, documents a Goldman Sachs study that new digital and marketplace lenders such as Lending Club and OnDeck will likely steal bank revenues.  These new lenders use digital technology, digital marketing and automated algorithms to make loans in minutes.  They usually charge more than banks and are growing nearly 200% a year according to the Harvard Business School study, “The State of Small Business Lending.

Small businesses and consumers clearly want to borrow online. 

How will your bank respond to participate in the growing digital lending opportunity and not lose revenue?  Former Citibank CEO Vikram Pandit points out that community and regional banks can easily provide competitive digital lending services where they keep and own relations and loans with technology partners.  “I can't imagine banks aren't looking at that and saying, 'Oh my god, I can do this cheaper and better,'" he said, and compete with marketplace lenders.

We and our clients agree with our technology platforms of we call PaySound for consumers and Cashflow businesses.

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