We’ve seen a fair degree of platform-bank interaction lately – most of it taking place within the small business lending space. The partnership between OnDeck and JPMorgan Chase has garnered perhaps the greatest attention in the press. Under the pilot scheme, Chase – the largest US bank by deposits – will write loans to its c. 4m small business customers using OnDeck’s technology platform and innovative credit scoring capabilities. But the loans will carry Chase branding.
In the UK, we’ve seen the likes of RBS buddy up with peer-to-peer operators Funding Circle and Assetz Capital. These relationships essentially pre-empt the government’s mandatory referral scheme. The high street bank has committed to signposting those SME customers that it cannot work with towards the Funding Circle and Assetz Capital platforms. But for all the bluster, we’re yet to receive detail about how much business is actually being written as a direct result of bank referral.
Direct small business lending platform Fundation tells us that it’s seen quite the uptick in business since joining forces with Regions Bank in early October 2015. To hear CEO Sam Graziano tell it, the Regions deal stands out from the pack as the sole instance of meaningful platform-bank “integration”. Small businesses are able to access Fundation loans directly, via the Regions.com site. Regions’ suite of products sits alongside the Fundation loan option, and the site is co-branded.
Joe DiNicolantonio, head of Regions Business Banking, offered his take:
"This unique agreement with Fundation allows Regions Bank to expand loan product offerings and method of delivery for small businesses while also cultivating long-term revenue and loan growth opportunities.”
Regions is a powerful ally, with around $122 billion in assets. The bank provides services ranging from consumer and commercial banking, to mortgages, to insurance products. But in spite of the bank’s clout – and you’d imagine that it must carry a fair bit into negotiations with an upstart online lender – Regions has not shied away from making plain its association with the Fundation platform. Indeed, when selecting the option of a Fundation loan via the Regions.com website, users are confronted with a message which states: "You are leaving Regions and entering an external site". Unabashed referral? Surely not! And although we're lacking hard numbers, the partnership already appears to be paying dividends. Said Graziano:
"It's still early, but we are very pleased with progress as volume is growing rapidly month over month."