In Fintech, firms such as LendingClub and Prosper Marketplace offer peer-to-peer lending services to borrowers and investors. Rather than traditionally loaning money from banks, borrowers are allowed to borrow money from investors. Recently however, local court rulings have made these new business practices difficult. Furthermore, The Office of the Comptroller of the Currency (OCC) released a white paper “proposing that these online lenders become national bank charters”. This allows federal regulations to be put in place to govern these online lenders. Their reasoning is that these Fintech solutions are nothing new, and that technology has always existed in the financial industries.
Interestingly however, is that banks and the government has recognized the potential for these new financial technologies. Goldman Sach’s has recently released their own peer-to-peer lending platform called Marcus, and the U.S. Treasury acknowledges that online lending services could reach $90 billion by 2020. Although using technology in the financial industry is nothing, the future of Fintech in lending is undeniably huge, and the underlying technology will never stop growing.
Source:
https://www.bloomberg.com/gadfly/articles/2017-01-19/newfangled-fintech-meets-oldfangled-financial-regulators
There might be a great lobbying effort by traditional financing institutions seeing how new regulations seem to favor the big banks. But note that they are also coming forth with similar lending services to compete with disruptive online lending. Take Quicken Loans(Rocket mortgage) for example, it’s the third-largest home loan lender behind Wells Fargo and Chase, according to trade publication Mortgage Daily. Clearly bridging the gap between online lending and offline, Fintech in Lending, is here to stay!