Disruptive Finance and Fintech
15.2K views | +1 today
Follow
Disruptive Finance and Fintech
Logo2 - mini
Click here to go back to www.disruptivefinance.co.uk  
Your new post is loading...
Your new post is loading...
Scooped by Huy Nguyen Trieu
Scoop.it!

And now Blackstone: the Big Guns are entering Online Lending

And now Blackstone: the Big Guns are entering Online Lending | Disruptive Finance and Fintech | Scoop.it

"The start-ups that have come to dominate the online-lending industry will now have to compete with the world’s largest private-equity firm.

B2R Holdings, a portfolio company of a Blackstone Group fund, said on Thursday that it was getting into the business of providing loans for consumer purchases of big-ticket items as well as small-businesses loans."

Huy Nguyen Trieu's insight:

I previously wrote about a game changer in Fintech, when Goldman Sachs announced the launch of an online lending business for their SME clients (and very proud that you read about it in Disruptive Finance one month before the FT and the WSJ!). To my knowledge, this initiative is still moving ahead, and GS is hiring people from Lending Club / Prosper to develop the platform. 

At that time, I also said that "it will be fascinating to see what happens over the next few months, and if other banks will follow suit", and they have! Most recently, ING, Santander and Scotiabank have invested in Kabbage (a data-driven lender, and one of my favourite Fintech startups) and ING and Kabbage will launch an online lending business in Spain. In my opinion, there is no doubt that online (data-driven) lending will be the norm, and banks will move towards that model, whether through internal development, partnership or acquisition. We are therefore likely to see more news of this type in the future. 

When we think of finance, let's not forget however that private equity firms are also very massive. It was therefore extremely interesting to see Blackstone is launching an online lending platform, Lending.com.  Which means that after startups doing online lending, banks doing online lending, we now have shadow banking doing online lending. Whereas banks are very aware of the potential disruption from startups, does it mean they also need to watch the competition from private equity firms? What is clear, is that technology is currently reshuffling the financial sector, and disruption might come from players we don't suspect. 


Follow me on Twitter here 

And my blog here

more...
No comment yet.
Scooped by Huy Nguyen Trieu
Scoop.it!

Credit scoring can even predict your love life!

Credit scoring can even predict your love life! | Disruptive Finance and Fintech | Scoop.it

When people are looking for a significant other, they often try to find someone whose values, education, earnings, hobbies and even height match their own. But new research suggests there's one promising measure for finding a committed partner that most daters overlook -- credit scores.

Huy Nguyen Trieu's insight:

This is an excellent article in so many ways! Any Fintech student (does that even exist…?) should spend hours thinking about the ramifications evoked by this topic.


I haven't read the actual study behind, so can't comment on the methodology of the Fed researchers. So I am less interested in the results (to be happily married, increase your credit score!) than in all the the structural trend happening in credit scoring:
- Credit scoring will have more and more of an impact on our lives, and not just for lending decisions. Like mentioned in this article, it could even impact dating (Tinder not with pictures, but credit score??)
- The biggest change to credit scoring is the availability of real time data - your credit score used to be very static, it can now be a dynamic number based on real time factors

- In a virtual world, there is a need to assess the trustworthiness of people we've never met (hence the reviews on Amazon, etc.). Credit scoring (or scoring in general) will be more prevalent

Garbage in, garbage out: we can try to predict anything based on anything, so for example your credit score based on the number of friends you have. It could work, it could well be rubbish too, and the easy access to a huge amount of data is likely to make pseudo-scientific scores more prevalent
- For lenders, there is clearly a benefit to have real time - and automated - information about their clients' creditworthiness - just look at Kabbage and you'll see how the future of credit scoring could be

- And there are of course a lot of ethical issues about what should or shouldn't be used, and we can see that undesirable things could happen quickly.


In all cases, credit scoring (and scoring in general) will be hugely transformed, it will have a huge impact on the way we are perceived (online, for loans, for mortgages, as a reliable/untrustworthy person), it will be real time. But there is also a risk that because it looks scientific, people will blindly trust a number that shouldn't really be trusted...


Follow me on Twitter here 

And my blog here

more...
No comment yet.