Current headlines are dominated by traditional institutions becoming minor or even major players in fintech platforms globally. This week it was announced that BlackRock made an investment of £12.7 million in Funding Circle. Similar activity is mirrored by companies such as Goldman Sachs, JPMorgan and DBS in Singapore. While these large institutions are making waves in the digital finance space, similar size opportunities are being exploited by community banks and institutions in the form of local P2P networks.
The aim is simple, institutions with a network of local or “community” banks are providing their customers an alternate avenue to raise capital if they cannot do so within the physical branch. This comes in the form of onboarding these customers onto a digital finance portal which they operate. The motive for the institution is clear and with the rise of “collaboration” it makes entering the market effortless.
The need for collaboration is framed very well by Eyal Lifshitz of Techcrunch: "Technological advances have raised consumer expectations for a personalized, integrated service, while also reducing the barriers and cost for new entrants to do so, putting banks in a vulnerable position. While startups may not have the infrastructure and systems that give banks their staying power, they aren’t burdened by the legacy systems common in big banks”
Local P2P platforms often sit outside the legacy banking infrastructure and leverage cutting edge technology to automate AML/KYC checks, credit scoring, disbursement and payments. By operating in the “cloud” platforms both future proof scaling and mitigate internal controls to enter the market efficiently.
We at Crowd Valley have seen both local banks and institutions identify this opportunity and enter new markets in a very meaningful way. Utilising their internal expertise in market knowledge, operations and product positioning, it gives them an advantage over most.
Institutions looking to capitalise on collaboration within the fintech space, get in touch with us at Crowd Valley to leverage our full offering and industry leading Digital Back Office that bridge the gap into fintech.
About the author - Pete Woodard
Pete has worked within FinTech since 2013 across a broad range of security applications serving multiple verticals. He has scaled Google Venture backed startups in the AdTech space before joining Crowd Valley. Originally from Canada with a education background in Mechanical Engineering and Marketing. Pete has helped to open up new global markets in the digital investing and lending space. When not firmly rooted in the London FinTech scene he enjoys travelling, always mixing business with pleasure. He has spoken to over 1000 digital investing entrepreneurs, which makes him a valuable resource for trends in new security models.
Pete has worked within FinTech since 2013 across a broad range of security applications serving multiple verticals. He has scaled Google Venture backed startups in the AdTech space before joining Crowd Valley. Originally from Canada with a education background in Mechanical Engineering and Marketing. Pete has helped to open up new global markets in the digital investing and lending space. When not firmly rooted in the London FinTech scene he enjoys travelling, always mixing business with pleasure. He has spoken to over 1000 digital investing entrepreneurs, which makes him a valuable resource for trends in new security models.
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