Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?


Lend Academy's Peter Renton on the 2014 LendIt Conference

By  +Follow June 9, 2014 1:45PM
Tickers Mentioned:

Early last month, most of the world’s primary experts in the field of online lending descended on San Francisco for the 2nd Annual LendIt conference to discuss all things peer-to-peer and online lending. A rapidly growing segment, P2P lending appears to have the potential to fundamentally shift the way personal and small-business lending happens.

Peter Renton, founder of Lend Academy and co-founder of the LendIt Conference, is one of the premier experts/educators in the P2P lending sphere. He spoke with Equities.com about what he learned at the conference and what everyone should know about P2P lending.

EQ: So the 2014 LendIt Conference, sponsored by Lending Club©, was held from May 4-6 this year in San Francisco. What did you learn there that the general public should really know and doesn’t at this point?

Peter Renton: One of the first things is that peer-to-peer lending is going to be very much about partnering with the banks going forward. A lot of people think that peer-to-peering lending as completely bypassing the banking system, but, when you think about it, the banks provide a valuable service. They’re just inefficient.

Renaud Laplanche, CEO of Lending Club, in his opening keynote at LendIt talked about their new partnership with Union Bank. Union Bank is one of the top 25 banks in the country and they are going to be working together to create new products. That’s going to be a very close, symbiotic relationship where Union Bank is going to be able to offer their customers Lending Club products and possibly vice versa.

Banks have been involved in lending for centuries, they’re going to want a place at the table here, and I think they will continue to be important. What I believe is going to happen is what was discussed in the Barclays (BCS) conversation at LendIt. Some of these banks are going to move more and more of their loan operations to these online platforms. Particularly when it comes to smaller loans. The Barclays guy even said that he expects in 10 years’ time, that Barclays could be a smaller bank than they are today, which speaks volumes to the disruption taking place today.

Another major theme of LendIt was the collaboration in this industry, how we’re still getting started and the biggest hurdle we have to overcome is the fact that people are still unaware of this industry. As Ron Suber, president of Prosper, said it is so important to build education, awareness and understanding. We’re still a small industry. For the most part, the general public doesn’t know about this industry and that is what we all need to focus on.

EQ: So what about securitization? Can we anticipate that being a part of the segment moving forward?

Renton: The first securitization took place less than 12 months ago in this industry with the Eaglewood Capital deal. Since then several more deals have closed including the OnDeck Capital deal announced on the eve of the LendIt. But when asked, industry leaders said that securitization is going to have a role going forward but it is not going to be the predominant driver of growth. And there’s not going to be the crazy derivatives and synthetic products that you’ve seen in other industries.

EQ: It sounds like a busy conference!

Renton: There’s plenty more I could tell you! We had some representation from the federal government. They are really becoming more and more aware of online lending, particularly when it comes to the small business side. There’s a whole bunch of free data at finance.data.gov that they will make available for anyone to use.

Underwriting was another important topic covered in depth at LendIt. There is a lot of data out there. The good platforms are using both traditional data and alternative data. By combining both, platforms can create better underwriting models and reduce defaults. Big data or alternative data is very popular these days, but data should only be used if it is truly predictive of financial behavior.

And finally, Charles Moldow of Foundation Capital gave a great presentation where he discussed his new white paper about peer-to-peer lending. He had created a new term for peer-to-peer lending called “marketplace lending.” He predicts that marketplace lending by 2025, so within 10 and a half years, will be a $1 trillion dollar industry globally. That was a big, bold statement that drew a lot attention as well.

EQ: How do people currently in the industry see the penetration of peer-to-peer lending in the general public happening? How quickly does it seem to be happening? Moldow’s estimate of $1 trillion a year in 10 years sounds pretty big.

Renton: The industry has been growing at more than 100 percent a year, and, from the talk at the conference, that growth rate is not slowing down. They feel like it’s going to more than double annually for a while.

This year, if you look at all the online lending and marketplace lending platforms, you’re going to be just south of $10 billion. So $1 trillion would be 100 times where we are today. But if you keep doubling it each year, it’s not going to take long. Two to the power of ten is 1,000. So if you double every year, Charles Moldow will actually be off by a factor of 10.

Clearly it’s not going to double every year forever; that’s simply impossible. But the sense is it’s going to double every year for at least the next two or three years before it slows down.

EQ: Are people talking about this going across borders and becoming a global phenomenon?

Renton: That was a major theme. One morning, we had an international session where we had a European panel and a China panel. That’s two of the major places outside of the U.S. where P2P lending is really taking hold. So, yes, there was a sense that it’s going to be a global industry. In fact, we had attendees from 23 different countries. People are coming to network from all over the world and they want to know what’s going on, so it’s going to be a global phenomenon.

There’s one company that is worth mentioning called Lendico. They are a German company, and they want to create the first global brand in this industry. They’re aggressive and they’ve got some deep-pocketed backers. They’re already in Germany, South Africa, and Spain and they’re planning on adding a new country every month or two for the foreseeable future. They are positioning themselves to be the first major global player in the industry.

But Renaud Laplanche, who is both a French and US  citizen, was asked directly at the conference what their international ambitions were and he said America is the complete focus right now. There’s still room for a tremendous amount of growth possible here. Lending Club is not interested, necessarily, in being that global brand, at least not right now.

Certain countries are going to be easier than others. One of the things that China is really struggling with is that there isn’t a great credit infrastructure there. Here, we have three main credit bureaus that have incredibly detailed information on all of us, and a similar ecosystem doesn’t exist in China. Many other countries are in the same boat, so peer-to-peer lending will have a more difficult time gaining a strong foothold in some places

EQ: It does occur to me that you’ve definitely seen, on the charitable side, a lot of push for micro-loans and serving under-banked communities around the world. Could P2P potentially fill some of that demand in the future with a for-profit model?

Renton: Oh, sure. That’s already starting to happen. Most of us know the great work that Kiva is doing – they have over a million accounts now with people lending money. They were on a panel at LendIt discussing the great work they have been doing. We also had another company by the name of Semble, which is a for-profit company providing finance for non-profits. Who’s the best person to provide a loan to a non-profit? It’s their donation base. So they work in that really innovative area.

There’s even one company that’s doing microfinance in Africa that is going after the African diaspora. There’s Africans living all over the world, investing in their home countries through microfinance. It’s really innovative stuff. I think we will see a blurring of the lines between non-profit microfinance and for-profit peer-to-peer lending.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

Signup for our daily newsletter and get our best articles emailed right to you!

Results for BCS
Comm Banks Feed
2 Oct 14 04:25:32
Barclays Bank 'Research Arm' Recommends Buying Barclays $bcs http://t.co/4nXUgQtCMb http://t.co/IWCZfiQBSP
Sleek Money
1 Oct 14 13:38:45
Barclays Rating Reiterated by Numis Securities Ltd $BCS http://t.co/FUwl3U5k0O
Comm Banks Feed
1 Oct 14 13:29:45
Barclays's "Buy" Rating Reiterated at Numis Securities Ltd (BCS) $bcs http://t.co/DTmfqelTVk http://t.co/7nRHsTvtOk
Ticker Report
1 Oct 14 13:29:41
Barclays’s “Buy” Rating Reiterated at Numis Securities Ltd $BCS http://t.co/N7P5c29Sj4
US Consumer News
1 Oct 14 13:19:06
Barclays's buy rating reiterated at Numis Securities Ltd. http://t.co/32mv72mAKr $BCS #BCS
Bidness Etc
1 Oct 14 13:16:47
Fed Continues to Investigate Leveraged Loans http://t.co/7qKOQpbfui $BCS $JPM $MS $DB
Analyst Ratings
1 Oct 14 13:12:23
Barclays's buy rating reiterated at Numis Securities Ltd. http://t.co/Fd5k44junL $BCS #BCS
BNK Invest
1 Oct 14 11:43:12
Barclays Preference Shares, Series 4, Cross 7.5% Yield Mark $BCS.PRC $BCS #preferredstocks http://t.co/YPcrf7McBo
1 Oct 14 09:46:28
$BCS - Report of Foreign Issuer (6-k) http://t.co/1wi7no5KFh
BUZZ Just-In
1 Oct 14 08:40:09
Track trending assets in 1 watchlist $BCS $GM $AGN $VZ $AMZN http://t.co/du2s1jEnnv
Jack Trader
30 Sep 14 11:02:18
$BCS Former Barclays Board Members Answerable To The Serious Fraud Office http://t.co/JbC2nOqvOl
30 Sep 14 08:23:04
Q3 Results At RBS To Benefit From $1.3 Billion Provision Release http://t.co/gkcQu4N9KY by Trefis Team $RBS $BCS $CFG
Howard H. Lee
30 Sep 14 06:42:21
http://t.co/33uLHpFjjl: #IronOre Q1 -13% Q2 -19% Q3 -17%. $VALE: $100 yr-end from $77.92. #DAIWA #SOCGEN RRR cut, $BCS rate cut #PBOC. #CNBC
30 Sep 14 05:56:20
$BCS - Barclays Bank PLC Extends Consent Solicitation Period for Select iPath® Commodities ETNs http://t.co/VGPB1N4e4v
30 Sep 14 04:19:14
Parabolic Sar Sell Signals 1/3 $ACE $AIZ $AREX $AXAS $BAK $BCS $BRKS $BTG $CCL $CHD $CMTL $CODE $COTY $CSIQ $DE http://t.co/QC5cKyEEbT
29 Sep 14 18:10:02
U.K. Regulators In Talks With 6 Banks For Currency Rigging $JPM $C $UBS $BCS $RBS $HSBC http://t.co/eEisa3IM6X
Stock Signaling
29 Sep 14 16:01:30
After Hours Price Advances: $BEN $CVEO $IMGN $HOLI $LOW $BCS $TIF $MYGN $DMD $WAG $PPC $RNDY $NCZ $MOBL $CSC http://t.co/Vtx6dLy0Nw #finance
Irma Doucet
29 Sep 14 08:30:33
$BCS Why Juniper Stock Was Down 8% On Friday http://t.co/usmbDHUBro
Jack Trader
29 Sep 14 08:30:30
$BCS Barclays Breaches Confidentiality Agreement http://t.co/9nuQkNlqKM
gordon gekko is god
29 Sep 14 06:22:48
UBS begins forex settlement talks http://t.co/hA4TZ9x5OZ $UBS, $BCS, $HSBC, $RBS, $JPM, $C
29 Sep 14 03:43:20
UBS begins forex settlement talks http://t.co/G4GAoVXJIK #premarket $UBS $BCS $HSBC $RBS
Mark Yusko
28 Sep 14 21:20:58
RT @sobata416: #fundamentals central bank balance sheet growth will be broadly unchanged in the next 12-15 months - $BCS via ZH http://t…
Lagos Capital
28 Sep 14 21:01:30
RT @sobata416: #fundamentals central bank balance sheet growth will be broadly unchanged in the next 12-15 months - $BCS via ZH http://t…
Vincent deCastro
28 Sep 14 20:43:13
RT @sobata416: #fundamentals central bank balance sheet growth will be broadly unchanged in the next 12-15 months - $BCS via ZH http://t…
$hane Obata
28 Sep 14 20:42:08
#fundamentals central bank balance sheet growth will be broadly unchanged in the next 12-15 months - $BCS via ZH http://t.co/7R0AxdJ5g5
Oli Wilkinson
28 Sep 14 12:13:41
Banks’ £14bn penance for credit crisis sins via @thesundaytimes $RBS $HSBA $BCS $BARC http://t.co/PCSRq25uh2
abhishek m r
28 Sep 14 09:30:50
$BCS Resis & best short level for the week 15 - 15.24 avg @ 15.48 target below 14.76 capped @ 14.04 - 13.76 abv 15.48 upside @ 16.15 - 16.44
Jesus Cryptos
27 Sep 14 06:52:47
RT @Bidnessetc: Juniper Stock Was Down 8% On Friday - http://t.co/JkHRG9q77u $JNPR $BCS
The Z
27 Sep 14 06:49:45
JPMorgan On Track To Rank As Top Investment Bank http://t.co/ZZrBWKYBeO #IBDNews $JPM $GS $DB $MS $BAC $C $CS $BCS $UBS $BNPQY
Bidness Etc
27 Sep 14 06:01:51
Juniper Stock Was Down 8% On Friday - http://t.co/JkHRG9q77u $JNPR $BCS
26 Sep 14 17:05:39
$BCS - ADR Shares End Higher; Petrobras Shares Trade Actively http://t.co/F0Lo4wxUdQ
John Ablemann
26 Sep 14 12:32:08
$BCS Former Barclays Board Members Answerable To The Serious Fraud Office http://t.co/8F8RfNTdRg
Investors Hangout
26 Sep 14 10:47:25
jim50: $BCS Open Date=Sept-26-2014 Open=14.96 High=14.97 http://t.co/PWw1y72mE4
Investors Hangout
26 Sep 14 10:47:12
jim50: $BCS Open Date=Sept-26-2014 Open=14.96 High=14.97 http://t.co/t9CWQWEC7F
26 Sep 14 10:25:08
$BCS Open Date=Sept-26-2014 Open=14.96 High=14.97 Low=14.88 Close=14.91 Volume=549855 http://t.co/o7dc75TWgW
26 Sep 14 10:17:47
$ABX Barrick Gold Corp (ABX) 15.19 -0.23 (-1.49%) $GGAL $BCS $EPI http://t.co/rQ2HBIAa61
Investors Hangout
26 Sep 14 09:10:44
DennyT: HNU.TO Morningstar $HNU.TO $FEYE $EXAS $BCS $ACHN http://t.co/NGjIIK32p5
Investors Hangout
26 Sep 14 09:10:44
DennyT: HNU.TO Morningstar $HNU.TO $FEYE $EXAS $BCS $ACHN http://t.co/iYYqPUbpEy
26 Sep 14 08:44:28
$BCS - LONDON MARKETS: Bank Stocks Lift FTSE 100; Sports Direct Drops http://t.co/VXywGKnApZ
26 Sep 14 08:42:09
HNU.TO Morningstar $HNU.TO $FEYE $EXAS $BCS $ACHN Buy or Sell Opinion,Parabolic SAR,Low,Headlines,Picking Up M http://t.co/QHWxRIdsP1
Investors Hangout
26 Sep 14 08:07:59
DennyT: CMG Morningstar $CMG $BCS $INTC $GDX $QLD http://t.co/wYIX2ySFTd
Investors Hangout
26 Sep 14 08:07:51
DennyT: CMG Morningstar $CMG $BCS $INTC $GDX $QLD http://t.co/5e0mnvw90e
26 Sep 14 08:07:31
BCS Stock Chart $BCS $QIHU $TKMR $MU http://t.co/1UV0vXUv2T http://t.co/gdDeUpLQiB
26 Sep 14 07:39:36
CMG Morningstar $CMG $BCS $INTC $GDX $QLD Opinion,Chart,Stock,Recent News,On Alert Stock Quote http://www.otcm http://t.co/tsT0WnJh1u
26 Sep 14 07:01:21
$BCS Former Barclays Board Members Answerable To The Serious Fraud Office http://t.co/RiNGOnWZkp
Filippo Gioia
25 Sep 14 21:40:23
RT @Bidnessetc: Former Barclays Board Members Answerable To The Serious Fraud Office http://t.co/s7bHEu8csd $BCS
Beate Reszat
25 Sep 14 21:17:41
"@Bidnessetc: Former Barclays Board Members Answerable To The Serious Fraud Office http://t.co/U58xCpmAzR $BCS" #Qatar
Abu Aadam
25 Sep 14 21:01:50
RT @Bidnessetc: Former Barclays Board Members Answerable To The Serious Fraud Office http://t.co/s7bHEu8csd $BCS
Banker's Umbrella
25 Sep 14 20:31:09
RT @Bidnessetc: Former Barclays Board Members Answerable To The Serious Fraud Office http://t.co/s7bHEu8csd $BCS
25 Sep 14 15:50:05
RT @Bidnessetc: Former Barclays Board Members Answerable To The Serious Fraud Office http://t.co/s7bHEu8csd $BCS
By  +Follow June 9, 2014 1:45PM



blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.