IBS Journal July 2017


EDITOR’S NOTE THE DEVELOPMENT OF LENDING TECHNOLOGIES


FOR TOO LONG A VAST SWATHE OF THE PLANET HAS BEEN CUT OFF FROM THE ABILITY TO LEND MONEY. NOW THE TECHNOLOGY TO INCREASE THE NUMBERS OF THOSE WHO CAN BORROW WITHOUT EXCESS RISK TO THE BANKS, THEREFORE HELPING EVERYONE PROSPER, IS WITHIN OUR GRASP


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Senior Editor Bill Boyle


billb@ibsintelligence.com


there are enough organisations and institutions out there doing it, that we should be saturated by lenders by now. But we aren’t. Banking remains beyond the reach of four-fifths of the global population. As the new challengers move in, they are already on their way to loaning $1 trillion in their first decade.


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There are prerequisites for being able to borrow that vary from location to location. In the US, credit bureaus hold the power to grant you a loan or not. Lending Club has built a good business of accurately pricing the risk of those who were previously overcharged by credit card companies. The new emergent lending platforms are finding new ways to use the big data they have at their disposal through the use of online tools and expertise, which old-school banks cannot compete.


Lending is the transformation of credit into wealth, yet it appears to be stuck in a bog between the conservatism of traditional banks and the optimistic (but still volatile) businesses which are using available data and big data to base sophisticated lending decisions on. In our Special Report and our interviews in this issue, we examine the relative abilities, toolsets and skillsets – both regarding where they lie now and where they need to be in the future.


The market complexities for the banks are multiplying out there - convergence is alive and well as seen in Bharti Airtel’s acquisition of a stake in Goa-based financial technology startup Seynse Technologies earlier this year.


ending is such a universal occupation, and


Seynse created the digital lending platform Loan Singh which provides consumers access to loans through its proprietary credit scoring engine, with a network of over a dozen partner alliances, banking institutions and individual lenders.


Bharti Airtel is using Seynse to bring targeted products to its more than 270 million customers. How will the banks react to this and how fast?


Rodolfo Gonzalez, the founder of Foundation Capital, believes that the worldwide transition from feature phones to smartphones, which will be completed within the next five to ten years, will see consumer underwriting decisions become the norm. Given the distributed nature of blockchain, the emergence of a decentralised global credit bureau is within reach.


This makes it possible for every consumer to have a checkable credit history and the ability to use analytics on freely-available shared information from social media sources completes the picture of a market five billion strong. Lending will come of age.


In this issue, look at the Linden Dollar. You may think that rather esoteric. However, there are an increasing number of people making money online playing games, and while they may only be making $3.50 an hour they are having a significant impact on the US economy – the virtual world is now infringing on the real one.


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