At the Community
Banking in the 21st Century Conference, Fed Governor Lael
Barinard did not mince words:
“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 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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