The systems problem drew attention to a difficulty that the online-lending industry has faced recently: returns on loans are falling, and persuading investors to buy loans from the platforms is getting harder.
The hand-wringing over business lending has overshadowed the fact that consumer lending — particularly for regional banks — has become a strong and steady engine of growth.
For all the talk of co-optation and partnerships with banks, financial services startups are doing well in underserved niche markets such as actors and musicians.
"Virtually evert venture capitalist I know is excited about insurance as the next big thing in fintech," says Sam Hodges, co-founder and U.S. managing director at Funding Circle.
Fintech companies can help consumers and small businesses obtain credit at lower costs, but it is critical to ensure that these innovative companies do not harm borrowers with predatory or discriminatory lending practices.
Reader reactions to criticism of Jamie Dimon, the House GOP ganging up on Richard Cordray, a bank's decision to part with Excel to measure credit losses, and more.
Upgrade, an online lender started by former Lending Club CEO Renaud Laplanche, will tout credit monitoring and education features to stand out in a crowded field.
Following a wave of layoffs, credit concerns and funding issues in 2016, marketplace lenders entered 2017 on "much stronger footing," says Sam Hodges, co-founder and U.S. managing director at Funding Circle.
