HELOC loans held at banks, a favorite strategy of bank lenders, have dropped in half to $317B since 2010 according the FRB. At the same time the personal loan market has grown to $305B. Consumers have found all-digital personal, auto and other consumer loans far simpler and quicker that bank HELOCs. Unfortunately, half the personal loan growth has gone to FinTechs, which had no market share in 2010. What is going on?
FinTechs like Marcus, Sofi and others now provide all-digital personal loans to good credit customers in minutes compared to the weeks it takes to get a HELOC. Speed and simplicity in customer experience easily win the day for consumers, without tying up the security of their home. And borrowers with strong credit present highly acceptable risk, often a better risk than a HELOC where the bank does not also have the first mortgage.
But banks have been slow to deliver express, all-digital loans, with only 6% offering all digital loans. It is time to step up or watch another $400 Billion in loans dissipate to non-bank competitors in the next five years. And not just loans, FinTech’s like Marcus and Sofi also provide deposit services.
The good news is community banks can win in digital lending. They have the lowest cost of funds, established customer relationships, proven compliance and documented underwriting. They just need the technology to compete. That is why we provide community banks MinuteLender®, off-the-shelf, self-service digital lending technology for consumer and small business loans, in-branch or out. All is under your brand, your control and your underwriting for loans on your books. Best of all, the customer experience is superior to any fintech player.
Delay no longer to compete and assure your bank’s relevance in the rapidly growing digital lending opportunity.
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