Enabling Disruption of Financial Markets

The financial industry, long constrained by complex regulations, high barriers to entry and economies of scale, is ready for a change. According to the Millenial Disruption Index, the banking...

Snehal Fulzele 24th February 2015

The financial industry, long constrained by complex regulations, high barriers to entry and economies of scale, is ready for a change. According to the Millenial Disruption Index, the banking industry is at the highest risk of disruption. Changing consumer attitudes demanding mobility, transparency, competitive products, and instant access to credit have led to the emergence of alternative lenders in the market.



fin-techFin Tech companies such as Cloud Lending Solutions, are challenging the financial status quo by building products that bring more transparency and flexibility in the world of finance. In fact, Cloud Lending Solutions has been enabling a growing number of alternative lenders bring newer and innovative solutions to borrowers at a fraction of the cost. In a recent interview with Crowdfund Insider, I discussed the increasing momentum in marketplace lending. Foundation Capital predicts that by year 2025, $1 trillion loans will be originated in marketplaces. These new alternative lenders need technology enablement to succeed, and consider software as their first priority. A recent blog in Lend Academy discusses how marketplace lenders need to make some tough decisions such as building the marketplace platform themselves, or go with an existing commercial solution. Building everything from scratch can not only be daunting but also requires time and a mammoth amount of effort. Cloud Lending Solutions can help a newmarketplace lending platform become operational in a matter of few weeks, with the added customizations to build in their “secret sauce” that drives their competitive edge.



Traditional Banks, however, are still hesitant to enter the “booming field of online marketplace lending” as discussed in an article in American Banker. We concur. In our experience in showing our loan solution to banks, we have realized that although, banks are interested in investing in alternative lending platforms, they themselves are wary of moving to the cloud owing to their stringent compliance regulations. Interestingly, another article in American Banker talks about the possibility of the cloud providing as robust security as a bank’s own storage infrastructure. However, even though cloud providers strive to meet every security certification and standard, bankers remain wary of using them. Alternative lenders, on the other hand, are rapidly adopting the cloud and driving innovation. In fact, one of our clients, DealStruck has shared its positive experience of using cloud based services. In that same article, DealStruck CEO Ethan Senturia said that they are comfortable with a cloud based solution, and are processing large amounts of transactions in the cloud.



Things are changing fast in the financial industry. With innovation happening outside the banks, Cloud Lending aims to enable such disruptive forces, and bring a positive change in the financial markets. It is going to be an interesting year!

Resources

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EVENTS

NEFA Finance Summit 2018 (Conference)

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Money 20/20 Europe 2018

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