This is a roundup of industry news and links for the week of May 8th that have informed, entertained, and inspired us.
Here’s our weekly roundup of industry news:
Lending Can Be as Easy as P2P, Says Former Venmo Exec – The likes of OnDeck and Lending Club have made the borrowing experience significantly simpler for borrowers, removing paperwork and reducing the decisioning process down to minutes. Most (if not all) major banks have also upped their lending experience, offering online applications and immediate decisions.
Lawmakers Push Bill Allowing Student Debt to Be Discharged in Bankruptcy – Rep. John Delaney, D-Md., introduced bipartisan legislation Friday to allow student debt to be discharged in bankruptcy. The Discharge Student Loans in Bankruptcy Act (H.R. 2366) reforms federal bankruptcy rules to establish parity between student loan debt and other forms of debt. Rep. John Katko, R-New York, is the lead republican co-sponsor of the bill. As it stands now, student loan debt cannot be discharged.
Now the hard part for bank robos: Getting customers to use them – A few years ago, many in financial services thought robo-advisers would completely disrupt traditional wealth and asset management services at banks.
That hasn’t entirely turned out to be the case. In fact banks have begun to partner with, acquire or create their own robos in an effort to appeal to wealth management clients who want more digital services.
Slow API adoption is dragging U.S. banking down – The United States has long had a reputation as a banking and financial juggernaut and leader of innovation. But unless American banks embrace open banking, they will lose the title.
While there is still no larger market, the U.S. has already begun to fall behind other countries when it comes to consumer finance. For example, even though payment app services like Venmo are catching on fast in the U.S., widespread adoption of instant, real-time payments is still trailing that of other countries, where many citizens may have never seen a paper check before. That is something still foreign to many Americans.
Who’s Who in Alternative Banking Solutions – Open banking, virtual branches, machine learning, and AI — these are just some components of the alternative banking puzzle.
Digital-first upstarts that provide alternative lending solutions have now proved to the banking world that they are as good (if not better) at attracting, underwriting, and servicing customers, when compared to traditional peers.