LendingClub (NYSE:LC) - What Marketplace Lenders Need To Realize
What Marketplace Lenders Need To Realize
At the Benzinga Fintech Awards Gala in New York City last month, industry leaders gathered to discuss hot topics in fintech.
On the "How to Earn Big on Alternative Investments" panel, the hosts spent some time discussing how to right the course for the marketplace lending space after the revelation of misconduct by LendingClub Corp (NYSE: LC) CEO Renaud Laplanche in early May.
Glenn Goldman, CEO of Credibly and former CEO of CAN Capital, is one of the few fintech executives with over 15 years' experience in the marketplace lending space. Goldman took the charge in outlining myths that have developed about marketplace lenders and what he believes leaders in the space must do to dispel them.
Below are four myths Goldman believes lenders need to bust. Check the video below for his direct comments.
"The notion of hypergrowth in fintech is likely unsustainable."
"[We're talking about] growth in the range of three, four, five hundred percent per annum level."
"Growth can outstrip the sources of capital."
"Some of the challenges that many of the companies are facing is that they relied on a single source of capital to fund their business or a single strategy."
"You should be raising capital on-balance sheet, whole loan sale and securitization."
"If you are in the business of setting prices on assets, which de facto means you are making a judgment about risk, you better be ready to stand behind that risk."
"The most refreshing and exciting [thing] is a focus on core fundamentals: cash flow, profitability, [and] being really good at everything you do, not just one or two things."
Glenn Goldman also emphasized that the marketplace lending industry needs to focus on data science and risk management.
"Not that folks weren't focused on [those things] before, but now the investing public is saying they want to see a lot more discipline and rigor around credit...because folks are now a lot more focused on making sure 'If I'm relying on someone to price assets for me, they better understand where risk is.'"
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