Online lender Avant was one company greatly affected by the industry's challenges in 2016; in May it laid off 60 workers with further reductions in July; it also paused its plans to expand into Australia and offer new auto loans and credit cards; a new partnership with Regions Bank has helped revive the company's growth and it also plans to announce another partnership in February; the new business activity has helped it to begin hiring again and it's currently looking for 25 technologists and some additional customer service support; in 2017 Avant's President, Adam Hughes, says the firm will focus on three main initiatives: growing Avant's core lending product, partnering with more brick-and-mortar banks and launching the credit card product; it also has plans to continue its previous initiatives including Australia expansion and auto loans. Source
Online Lending
"The Hourglass Effect" is a white paper written by Frank Rotman from QED Investors in 2015; it provides a historic look at the evolution of the marketplace lending industry and how its growth has coincided with the slowdown in traditional bank lending following the 2008 financial crisis; it outlines ten years of industry growth and includes in-depth details on the economy, marketplace lending and banks; Frank Rotman also presented the white paper in a recorded presentation at LendIt USA 2015. Source
Originators of all stripes are using machines in the underwriting process. Understanding the capabilities and how best to underwrite in a more automated way is something lenders are still working on.
At LendIt USA 2016 Douglas Merrill of Zest Finance discusses the credit and underwriting process and how consumers are really looking for an experience that automates the choice of loans for them based upon the existing data available.
Douglas believes that speed matters but nobody knows that it matters, when consumers come to the lender for a loan they are not looking for a loan but for life certainty. The loan is just a product, a seamless and improved experience is what the borrower wants.
We should be discussing loans in seconds and microseconds, not days or weeks. Machines can help to automate the process based on your existing data set and a borrower should not need to fill out a loan application. Computation, storage and bandwidth are free and infinite. The things we can do with data are exciting and seemingly endless.
The current underwriting has been stuck in the 70's. Data has enabled us to change underwriting and develop new types of products; machines can help to make this happen. Why do lenders make you apply for a loan? Lenders know enough about you to know what you should need and they don't need you to fill out an application at all.
An automated underwriting process and the amount of data available through traditional and nontraditional means will help to continue the advancement in credit. At LendIt USA 2017 we will be covering the latest innovations in credit and underwriting. Learn what is coming next from the top originators, credit bureaus and service providers.
Check out the full video here: