This past week, Lendified’s executives attended Lend IT USA 2016, the world’s largest online lending conference in San Francisco. The event was held on April 11-12 at the San Francisco Marriott Marquis and it connected over 4,000 global online lending community members from over 20 countries. We sat down with Lendified’s Founder and CEO Troy Wright after the conference and asked him to share some key takeaways from the conference, as well as his thoughts on key and emerging trends in the fintech space.
Q: Having attended LendIt USA in New York last year, what changes or differences since last year did you observe?
Troy: Since last year’s conference we saw many more participants and an increased awareness amongst the public of what fintech and marketplace lending is. There’s greater clarity in the market now around what the value proposition of fintech companies is and what we offer in general – which essentially is simplified the delivery of financial services and create greater transparency. And generally, I found that there was elevated interest around finding ways to build and grow the industry.
Q: What were some of the leading trends you observed at LendIt USA 2016?
Troy: The most prominent trend was that many of the key players are looking for ways to develop more products, especially lending products. The original premise of marketplace or peer-to-peer lending, was pretty one-dimensional. Now, I’m seeing a lot more product innovation, particularly on the consumer side, with companies expanding into areas like mortgages, auto financing or focusing on very niche areas such as motorcycles.
Q: The lending industry is getting a lot of attention right now from consumers, media and investors alike - what do you think is driving this interest?
Troy: I think what we’re seeing is a gradual increase in awareness about Fintech. Any time there’s an opportunity to significantly improve the customer experience in an environment where traditional services are inefficient or costly, it’s going to turn heads.
There’s a lot of excitement around the ground-breaking abilities these fintech companies have to innovate and bring new and better ways for people to use the financial services which are really deeply ingrained in our day-to-day lives.
It’s a great story and it’s an exciting one - it’s fast moving and there are many aspects of the story to explore that are continuing to develop. It’s an innovation story and that’s grabbing the attention of media, consumers and investors around the world.
Q: As the lending space continues to grow and new players enter the space, what makes Lendified different?
Troy: At Lendified, we’ve chosen to make it our primary focus to build a lending technology platform. We believe one of our main differentiators is our ability to deliver a truly best-in-class credit engine, credit monitoring, technology platform, and tools to help both borrowers and financial institutions better manage their lending and borrowing experience.
The success of our company lies in innovation and creating something that is a sustainable, long-term differentiator and competitive advantage - for instance, our proprietary credit data analytics model, and our recent acquisition of Mentio which allows us to capture data directly from an accounting platform and use that data to improve our credit model.
Q: As a seasoned executive with a long history in the traditional banking sector, you’re now leading a financial company in a largely unregulated environment. What is your approach to regulation in this field?
Troy: We’re basically operating our company as if we were regulated. We have very rigorous processes around AML (anti-money laundering), “know your customer,” and anti-terrorism financing, embedded into everything we do.
The best in class companies out there, like Lendified, are anticipating that regulations will come and acting accordingly. We also know that in order for our platform to operate as a complement to financial institutions as a licensed platform, we need to be able to meet or exceed their needs and standards on the regulatory front - and so that’s what we set out to do.
Q: There were many interesting panels and demonstrations at LendIt USA this year - what discussions stood out to you and why?
Troy: I think one of the most prominent themes I heard was regarding how the fintech industry is becoming more broadly understood and also more widely adopted by the population at large. In Canada, we know the adoption rates of fintech platforms like ours are actually amongst the lowest of the G7 countries, especially in comparison to the US and UK markets.
There was a lot of talk about how fintech is becoming more mainstream now - for instance we’re moving away from terminology like “alternative lending” or “alternative finance” as fintech is increasingly viewed as a first choice to consumers, rather than an alternative.
I wouldn’t say by any stretch that we’re a mature industry at all - we’re still in the infancy of the FinTech revolution - but certainly we’re seeing more adoption and more willingness to adopt on the part of consumers.
Q: What does the average consumer or small business owner need to know about the lending landscape today?
Troy: I think what they should know and understand that although there is a move for greater transparency around rates and terms and conditions in the online lending space, not all companies are the same. Consumers and small business owners should seek out companies that are committed to being clear about what their rates are, what the terms and conditions are, and shop around for the best deal out there.
At Lendified, one of the things we pride ourselves on is our very strong rates of interest - our rates are better than many of our competitors. We also make client experience a priority. For instance, we do not charge any pre-payment penalties if someone wants to pay back their loan early, while a lot of our competitors do charge penalties for pre-payments. So consumers should really understand what the terms and conditions are because they are not the same amongst all players and not everyone is putting small business owners first the way do.
Q: Lendified recently acquired cash flow automation technology, Mentio. Is this a trend you saw at the conference or is that direction unique to Lendified?
Troy: It’s not so much of a trend right now - I haven’t seen a lot of consolidation. There was some discussion that we might see some consolidation in the future, but at this time, I think we were certainly ahead of the pack. Part of our thinking there was, as we look at our technology platform and we evaluate how to get access to the best data to drive our overall analytics and credit engine, and also stay ahead of the packs in terms of sources of data and ease of use by the part of our customers, the Mentio Technologies acquisition really gave us something which not a lot of our competitors have today.
Q: What other complementary services and technologies could you see dovetailing into online lending in the future?
Troy: I think one of the things which will be very helpful would be increased access to information around small businesses: Their cash flow and their positions on key performance indicators, sales growth, expense management and so on. As a lender, either directly through Lendified or indirectly as a service through other financial institutions who use the Lendified platform for providing lending services to their customers, we would be able to provide new tools or additional tools in an easy to read, fast, and accessible format across all technology devices. And I think the power of that information will enable a whole new level of capacity for small businesses to better manage their business and be more successful. Ultimately, we are invested in the success of small business owners, so anything we can do to enable that is complementary to our business.
Q: What were the top takeaways for you from LendIt USA 2016?
Troy: Firstly, I’d say we need to keep moving fast at Lendified to grow our business, and maintain our position at the leading edge of what’s happening in the FinTech space. There are a lot of players out there who are definitely innovating and I feel like we’re leading the pack. But in order to maintain that status, we need to continue to work harder, smarter and faster at developing our business and our business model.
Second, I would say is there is a real need in the space to think about how to partner with other organizations on customer acquisition. Finding ways to work with banks and financial institutions or third-party businesses that work with our target demographic to bring customers into the platforms - those relationships are so important. So, the customer acquisition piece coming out of the LendIt was really key and those types of innovative partnerships are something we’re very receptive to here at Lendified.
Lastly, the idea of product innovation, which I talked about earlier - new activity, new lending niches - is something that will continue to develop in the space, and will continue to be a priority for us here at Lendified.