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Thursday, October 1, 2015

Fed Governor Brainard Says Community Banks Need Digital Lending Strategy

 “Community banks will need a strategy for a tough new competitor (online digital lenders). …Technology advances... help lenders make credit available.”

 She joins a list of leading economic policy advisors talking about the growth potential of digital lending, including Larry Summers who said digital lenders could capture 70% of small business lending.  Forbes Magazine documents the trend, and like McKenzie recommendations, say community banks need to offer their own digital lending platform.

The revenue opportunity is ripe for community banks as they bank the majority of small business checking accounts, but 80% of the small businesses they bank have no lending relationship with the bank but have loans elsewhere.  Community bank processes today are too cumbersome to make loans under $50k profitable even though this segment is 40% of all small business loans.

The good news is proven digital lending technology platforms like MinuteLender are available for community banks with sound and proven underwriting.  Bank digital lending meets or exceeds all the regulatory concerns of the Fed and Treasury.  Download our Small Business Digital Lending Strategy Book for Community Banks for more information.

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