December 20178IN MY OPINIONDoes a Fintech Partner Make Sense for My Bank?Where and how small businesses access capital has changed a lot in the last few years. Although traditional sources like the local bank remain one of the first places an entrepreneur may look when seeking financing, other lenders, such as tech-enabled online lenders, are serving more and more borrowers that don't even consider the bank. This increase in non-traditional competition has many banks re-evaluating how they approach small business borrowers and has caused them to focus on streamlining their origination processes to make them easier and faster.This is a challenge faced by many banks. Andrew Kresse, CEO of Chase Bank Business Banking recently stated: "We want to be the easiest bank for small businesses to work with, and part of that is simplifying delivery of our products so they have more time to run their businesses."For banks, manual processes are expensive; it simply may not be profitable to lend in the smaller loan amounts many of their small business customers are seeking. Research has shown that institutions transitioning to a digital originations process can make 40-50 percent of the loans under $250 thousand self-service, thereby lowering processing costs from thousands to hundreds of dollars per loan, while still delivering Net Promoter Scores in the 80+ range. By automating and simplifying the loan origination process, a bank can increase its share of the market, retain existing banking relationships, and gain an edge over competitors who are slow to adapt to these fast-moving changes in the market. Depending upon your bank, there are different ways to approach this. As an implementer of new technology, you will have to help decide whether your approach will be:By Noah Breslow, CEO, OnDeckNoah Breslow
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