Selecting the right lending partner in the dynamic consumer lending landscape
Brent Turner, Meta Financial: top tips on selecting the right lending partner
Consumers have many options for credit other than banks, and now access them in a variety of places: from healthcare or mortgage loans online to loans at the point-of-sale (POS) in retail. As a result, the consumer lending industry is growing and diversifying quickly, with more and more non-bank businesses entering the market.
But between regulatory scrutiny, difficulties sourcing funding and growing demand, consumer lending is not easy. For businesses looking to capitalise on this estimated $3.8 trillion industry, a total solution lending partner is key.
There are several important measures to consider when selecting a lending partner:
- Fluent in compliance and risk management
Over the last several years, regulatory scrutiny of the consumer lending industry has increased exponentially, though regulations have eased under the current administration. Nevertheless, the continued growth and success of consumer lenders of all sizes depends on mitigating regulatory risk, which is always shifting.
Enter, the bank marketplace lending partner — not only are they well-versed (and experienced) in risk mitigation, these partners will hold you to their own proven standards, so you can stay in good standing with regulators (and ahead your competitors).
- A single solution lending partner and customer experience expert
To market and sell consumer loans, most businesses work with multiple lending partners to provide the underwriting, loan management, financing, analytics and modelling. However, a total solution marketplace lender can provide all of these services, taking costs and complexity out of the model.
Additionally, your lending partner should provide a personal, high-touch customer experience, with the right mix of experts with oversight on your services.
Rather than a one-size fits all mentality, the company should provide a breadth of services with vast capabilities to meet you wherever you are in the consumer lending experience.
- Ready to grow with you
As you work to growth the depth, breadth and reach of your business, make sure to select a lending partner that can grow with you. Many state-chartered institutions in the US currently work in the marketplace, but a federally chartered bank or thrift has specific advantages as a partner in many states.
- A reliable partner
2018 is being touted by small business owners across the country as the best time in decades to expand. But the economy is complex, and the economic outlook changes often (and unpredictably). If your lending partner gets impacted by marketplace volatility, it could impact your expansion plans.
Look for a marketplace lending partner that has a large capacity to hold receivables on their balance sheet, so you can grow confidently, assured that the economy’s ongoing state of flux won’t jeopardise your model with true lender risk.
Knowing the right things to look for in a lending partner can help you to capitalize on exciting consumer lending opportunities, and grow your business.
By Brent Turner, EVP and head of consumer lending, Meta Financial Group and MetaBank
