LendIt 2019 kicked off yesterday in the Moscone Center in San Francisco, with thousands on hand for the world’s leading event in financial services innovation.
Marqeta’s Chief Revenue Officer, Omri Dahan, had the opening keynote on the Small Business Lending stage. His talk, “The Rebundling of SMB Banking” made a compelling case for the new wave of financial innovation creating added value and competition in banking for small businesses.
Dahan began by outlining the first two waves of change.
- The personal loan revolution: The advent of data driven underwriting tools and a huge increase in fintech investment has seen a massive surge in lending from fintechs. Largely due to the labor intensive nature of applying for SMB loans and making lending decisions, SMB innovation has lagged behind the market overall and remains a small portion of the overall addressable opportunity, but is starting to take off thanks to innovators like Kabbage, OnDeck and FundingCircle. It still remains a point solution, with lenders too dependent on data supplied to them by borrowers.
- Connecting cards to loans: the second wave of innovation, saw lenders connect their loan offerings to physical cards. This filled in a missing piece, allowing the lender to track how the supplied capital was used and what it was used for, and in the process gaining more insight into customer behaviors. This has led to greater engagement and loan utilization, but doesn’t connect all of the dots.
What will really move the market forward, Dahan theorized, was companies with access and insight into the point-of-sale experience for SMBs, be it merchant acquirers for traditional retailers, or companies offering invoice factoring or e-payable services for small enterprises. You see a company like Square, expanding from point of sale terminals, to offering cards for SMBs that help them instantly access their sales revenue as capital and setting up a SMB lending partnership with eBay. It is creating a powerful new user experience, Dahan argued, where a new type of financial innovator can impact every piece of the SMB lifecycle.
To close the day, our VP of Business Development Salman Syed was on a panel hosted by LinkedIn’s Devin Banerjee, alongside Kabbage’s co-founder Kathryn Petralia and Alibaba’s North America Director of Product Innovation & Strategy, Kivanc Onan. The group talked about how a growing trend of partnerships in the industry between lenders and major brands — like the one between Alibaba and Kabbage — are creating powerful new synergies. As they outlined, payments, commerce and lending have come together and helped create seamless consumer experiences that weren’t possible just a few years ago.
As Alibaba’s Onan mentioned, it was important for him to find partners who could move quickly and get solutions to market quickly. Kabbage’s Petralia talked about how traditional banks were fading into the background, unable to innovate as quickly and with less of a direct relationship with consumers. “Innovation in financial services begins with mindset,” Syed remarked.
Elsewhere, on the expo floor, Marqeta was omnipresent. We sponsored the conference’s networking area, where a predicted 10,000 meetings were to be held across the two-day event and sponsored the Brella networking app used by all attendees to make new connections.