30
of SME lending, leasing, guarantees, etc. Acquisition of alternative lending platforms is not an unviable option either, considering that banks gain IP and instant market share, while it allows for logical exits for the VC/PE firms as well.
Age alone is no guarantee
While there are an estimated 6,500 banks globally, some of them in existence over 100 years, the alternative lending industry already boasts of 1,300 players powered by VC/PE funds, although they constitute less than 1% of the lending market. It doesn’t take rocket science to predict consolidation and buyouts as an obvious implication for alternative lending players. In an inevitable context of banks looking to participate in this market – either directly or indirectly, there can only be two choices for traditional players: partner with marketplace lending players, or build the capabilities, either organically or through an acquisition.
As these developments unfold in the marketplace, a few trends are likely to gain more prominence – where banks and financial institutions adapt from models driven by alternative lending players:
1. Multi-channel lending by core platforms, and harnessing of customer, relationship and transaction data being harnessed across feeds from all channels
2. Optimisation of credit process – from risk assessment, product pricing, analysis, and overall administration using robotic process automation.
3. Adoption of machine learning technology and predictive analytics not just from a credit risk assessment standpoint, but also to offer customer specific products and services.
4. Build the organisational model to be suited to the new age lending approaches.
As the proficiency of alternative credit improves with increased use of ‘big data’ – including social media, pictures posted, GPS data, call history, academic scores, phone updates and many other such insights - the learnings from the experiences of default and sophistication of analysis is only expected to get better. Banks would do better to proactively identify means to collaborate or co-exist, else to compete would be but a fait accompli!
APPROACHES TO PARTICIPATE
www.ibsintelligence.com © IBS Intelligence 2017
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
