FinTech Insurgents? How Lending Club Is Working With Banks

On the heels of being named one of Bloomberg Markets’ 50 Most Influential figures, Lending Club CEO Renaud Laplanche recently appeared at the Bloomberg Markets’ Most Influential Summit in New York. There, he sat with Joe Weisenthal and Earthport CEO, Hank Uberoi, to talk about his company and the rising FinTech movement.

Although the panel was titled “Banker Beware: Meet the FinTech Insurgents,” Laplanche dispelled the notion that Lending Club is at war with the banks, insisting instead that his company works with and even partners with traditional banks. “I think we’re a threat to the model, but we’re not necessarily a threat to the banks,” he told Weisenthal, adding, “When we talk about transforming the banking industry, it’s a positive transformation for the consumer, but it could be a positive transformation for the bank as well.”

In fact, Laplanche noted that, in the last quarter, approximately 20% of Lending Club’s funding came from banks who have taken to investing on the company’s platform. Additionally, Lending Club has partnerships that offer bank customers co-branded loans.

As moderator Weisenthal pointed out, “[FinTech companies are] theoretically providing a service to customers better than what the banks can do but providing it with them.” When he then asked what the core identity of banks will be if startups are doing major parts of their business in a better way, Earthport CEO Hank Uberoi responded by comparing this conundrum to the auto industry. “You buy a car, you buy a BMW — they don’t make the gearbox, they don’t make the air conditioning system, they don’t make the tires, but they own the economic model, they own the design,” he said.

Laplanche added that, while Lending Club offers a low cost of operation and delivers a good customer experience, the banks have a lower cost of capital. “The combination of a bank and Lending Club is really the best of both worlds where you get the lost cost of operations and the lowest cost of capital and, together, we can drive down the cost of credit for consumers and businesses.”

During the Q

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

X1 Opens Waitlist for New X1+ Credit Card

A neo-credit card issuer is looking to build upon its early success and expand its line-up. This week, X1 announced the upcoming X1+ card while opening a waitlist for the product. With the X1 being billed as "the world’s smartest credit card," this latest offering is being hailed as the only credit card for smart travel. The X1+ is expected to launch this spring and will carry an annual fee...

Bilt and Point.Me Partner for Award Flight Search Integration

With several credit cards, customers can earn points that can then be transferred to various travel programs and redeemed for flights or hotel bookings. Unfortunately, finding and booking the best award travel deals isn't always as straightforward as one might assume. To assist with that, Bilt has unveiled a new integration with Point.Me that will help its rewards members search for award flights on airlines that participate in Bilt's transfer...

Zurp Raises $5 Million for Creator Experience Rewards Credit Card

A FinTech looking to marry credit card rewards with the creator economy has just closed a fresh round of funding. This week, Zurp announced that it had raised $5 million to create a "credit card for experiences." New Form, MAGIC Fund, Launchpad VC, OVO Fund, Darling Ventures, and Animal Capital all participated in the pre-seed fund along with a number of strategic investors. Zurp is a startup looking to create...