LendingPoint’s Chief Strategy Officer and Co-Founder, Juan Tavares talks about what 2018 holds for Fintech
What predictions do you have for 2018?
From a capital market perspective, investors are going to seek profitability over loan volume as a key indicator for sustainability. Profitable organizations will attract significant investments from Wall Street. We’ve watched the non-balance sheet marketplace lending model develop over the past 10 years. While the front-end user experience has provided a more pleasant interface for consumers, in retrospect, this capital-light, credit-last model has disaggregated the lending value chain and fragmented front end from back end platforms, resulting in lackluster credit performance.
My crystal ball for 2018 says that profitable, credit-first, fintech platforms that provide fully integrated solutions will win the day.
What are the trends that you’re watching?
The word for 2018 is consilience. Consilience is defined as the coming together of seemingly separate ideas, disciplines or organizations to reach stronger conclusions. As such, the lines between fintech and big tech will begin to blur and we will see more activity at the intersection of payments and credit. For example, Apple Pay and PayPal credit have broadened access to financial services through partnership and acquisitions. But at the end of day, they don’t have a back-end credit platform that allows them to understand balance sheet lending, which, in turn will make them cross over into banking or credit and carry the heavier burden that comes with banking regulation.
The Next Frontier
LendingPoint is leading the way for a new category creation as a fintech, credit-first, balance sheet lender. This new category is creating for the first time an alignment of interest between consumers and investors. This creates more value for the economy and the American consumer.