Those sounding the death knell of the banking industry at the hands of fintech startups are underestimating the resilience of banks to disruptions.
The recent dismissal of Lending Club CEO, the charismatic French entrepreneur Renaud Laplanche, for allegedly mis-selling loans to a Wall Street bank, caused a media circus about the future of fintech, raising concerns whether these ambitious startups had the right controls in place to keep up with their growth. But the fintech industry was already on shaky ground before this news broke.
Initially dubbed peer-to-peer lending (individuals financing individuals), it has evolved into ‘marketplace funding’ with large institutional investors such as pension and hedge funds, and even banks, making the loans to individuals. After the initial euphoria of its public listing in 2014, Lending Club was trading well below its issue price by January 2016 as it started to lose the interest of institutional lenders due to increasing default rates. Regulators also began paying more attention to the information ‘investors’ were getting about their investments and whether consumers were borrowing at usury rates.
Many claims have been made that mainstream banks could be displaced by peer-to-peer and marketplace lenders, but in a recent paper for Banque de France’s 2016 Financial Stability Review, I point out that it is far from clear that these new players have the expertise and infrastructure to replace the work banks do.
This story is from the June 2017 edition of Indian Management.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the June 2017 edition of Indian Management.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Trust is a must
Trust a belief in the abilities, integrity, values, and character of any organisation is one of the most important management principles.
Listen To Your Customers
A good customer experience management strategy will not just help retain existing customers but also attract new ones.
The hand that feeds
Providing free meals to employees is an effective way to increase engagement and boost productivity.
Survival secrets
Thrive at the workplace with these simple adaptations.
Plan backwards
Pioneer in the venture capital and private equity fields and co-founder of four transformational private equity firms, Bryan C Cressey opines that we have been taught backwards in many important ways, people can work an entire career without seeing these roadblocks to their achievements, and if you recognise and bust these five myths, you will become far more successful.
For a sweet deal
Negotiation is a discovery process for both sides; better interactions will lead all parties to what they want.
Humanise. Optimise. Digitise
Engaging employees in critical to the survival of an organisation, since the future of business is (still) people.
Beyond the call of duty
A servant leadership model can serve the purpose best when dealing with a distributed workforce.
Workplace courage
Leaders need to build courage in order to enhance their self-reliance and contribution to the team.
Focused on reality
Are you a sales manager or a true sales leader? The difference, David Mattson, CEO, Sandler® and author, Scaling Sales Success: 16 Key Principles For Sales Leaders, maintains, comes down to whether you can see beyond five classic myths that we often tell ourselves about selling.
