To personalize products and services, banks are now tracking all sorts of alternative data sources, even the manner in which customers type in mobile banking apps.
Rep. Emanuel Cleaver, D-Mo., released a survey of lending practices that he said point to practices such as forced arbitration clauses and extracting a customer’s credit score to determine creditworthiness.
First-of-its-kind legislation seeks to tame the largely unregulated world of online small-business lending. It has drawn bipartisan support from lawmakers, but so far has failed to satisfy either the industry or its critics.
Using Orchard’s data science smarts, Kabbage intends to offer new payment products to small businesses and loan portfolio insights to financial institution partners.
As upstart companies mature, they face pressure to develop deeper relationships with their customers. That is leading some to offer to a wider range of products, including deposit accounts.
Orchard Platform Markets, a provider of lending data and services backed by the former heads of Citigroup and Morgan Stanley, is set to be acquired by small-business lending platform Kabbage, said people familiar with the deal.
Efforts by financial institutions to track "beneficial ownership" data in advance of a regulatory deadline next month is complicated by the challenge of getting customers to cough up the information.
Disruptors would get a powerful new competitor if Amazon began offering checking accounts, but such a move would also validate the notion that fintechs are the future.
