Unleashing the Potential of Fintech

Todd Nelson, SVP Strategic Partnerships Mike Petanovitch, Head of Technology, LightStream
Todd Nelson, SVP Strategic Partnerships Mike Petanovitch, Head of Technology, LightStream

Todd Nelson, SVP Strategic Partnerships Mike Petanovitch, Head of Technology, LightStream

What are the current market trends you see shaping the fintech space?

We at LightStream continue to see opportunities for partnerships between fintech companies and banks—all with an eye on providing better products for the consumer. LightStream is unique in that it is one of the original fintech startups in the unsecured lending market. It was acquired by a bank (SunTrust), and now has partnerships with fintechs and banks to provide our best-in-class consumer lending product to our partners’ customers.

  For a CIO, staying abreast of this ever-expanding area is best achieved by investing in human capital  

fintech is transforming the financial services industry and will continue to do so as the industry makes the shift to fostering innovation. fintech products improve the ease with which people can make cross border remittances, increase the number of data points used to make loan decisions, automate regulatory functions, and more. Your views on this trend.

Certainly “tech” has enabled innovation in lending, but it’s hard to agree that “fintech” itself is the transformation agent. Banks, financial service companies, credit unions, and marketplace lenders are all improving consumer experiences and delivering better lending and financial products for their customers. We agree that the availability of ever-larger data sets and the ability to use increasingly faster and cheaper technology solutions will continue to transform how individuals and organizations interact and deliver financial service functions.

Please elaborate on the challenges that the organizations will need to address related to fintech space.

Technology often comes down to a decision to Buy, Build, or Partner, in order to improve a product, process, or function. Older, larger organizations often have higher switching costs than smaller and newer companies. Financial services businesses must also ensure compliance and consider customer considered when upgrading to and adopting new technology.

An increase in connected devices and the means to process that data is driving the creation of personalized insurance products based on an individual’s data sets. Regulatory technology has seen know your customer (KYC) and anti-money laundering software infused with artificial intelligence pop up in the past couple of years. What can organizations do to stay abreast of these changes?

The “Big Data” era is here. CIOs now and in the future need to understand the importance of investment in talent and knowledge. The use of ever-growing datasets gathered by the “Internet of Things” is limited only by the user’s creativity and innovation. Big data and AI can find new business models within business models. Real-time customization based on customer habits will change how and what services companies offer. Insights into testing outcomes of decisions before they are implemented will lead to better ROI. For a CIO, staying abreast of this ever-expanding area is best achieved by investing in human capital. These data partners can work with every area of an organization, and find creative ways to unlock the power of “Big Data.”

What is your advice for budding technologists in the fintech space? How do you see the evolution a few years from now with regards to disruptions and transformations within fintech space?

The fintech space continues to evolve as lenders grow to meet consumer demand for online lending that is secure, fast, and delivers true value to consumers. In less than a decade, online lending has grown into a massive category. TransUnion research showed 131 billion total personal loan balances in 2018 and predicts a jump to an additional 20 million new personal loans in 2019. This growth will drive more banks and credit unions into the online finance space or else risk missing out on a dynamic consumer marketplace. Providing scale and security will be a fintech challenge that promises both disruption of traditional lending processes and transformational changes in the ways consumer borrow.

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