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Community Banks Rapidly Losing Small Business & Consumer Loan Market Share

Posted by Michele Rehm, Marketing Manager on Apr 17, 2018 10:57:25 AM

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The growth of digital lending—and community banks' failure to keep up with the pace—is illustrated clearly (and pretty harshly) in the charts below. 

According to FDIC and Fintech industry data, community FIs have lost nearly half their market share of small business loans under $100k to large banks and Fintech companies in the last seven years. This is unfortunate considering that small business loans have been a distinguishing strength of community banks in the past and serve as a key pipeline for future loans.

market share sm bus loans

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Topics: Digital Lending, Digital Strategy, non-bank lenders, Small Business Loans, Fintech, Consumer Loans

ABA Says Digital Lending Technology Works Best When Strategically Applied

Posted by Jeff Harper, President, BSG Financial Group on Jan 15, 2018 12:07:46 PM

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With consumers increasingly expecting a seamless lending experience and more non-bank digital lenders entering the market, banks must embrace digital lending technology to remain competitiveHowever, it must be applied strategically. 

As Rob Morgan, Vice President at the American Bankers Association (ABA), wisely pointed out in a recent article in the ABA Banking JournalDigital lending isn’t an across-the-board pursuit for banks; it's a strategy surgically applied to specific lending areas.”  The article, entitled Three Big Trends in Digital Lending and How to Get In on Them, suggests financial institutions should focus their efforts on those areas of lending that are easiest to digitize—namely, small business lending and personal loans.

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Topics: Digital Lending, Digital Strategy, non-bank lenders

Small business loans <$100K must be digital in order to compete with non-bank lenders

Posted by Michele Rehm, Marketing Manager on Jan 2, 2018 9:48:40 AM

The recently-released 2017 U.S. Digital Lending Landscape white paper by S&P Global Market Intelligence projects that digital lenders will originate $62.84 billion in new loans in 2021 across the personal, small and medium enterprise, and student-focused segments. This prediction represents a compound annual growth rate of 16.5%, although SME-focused lenders are projected to grow the fastest over the next five years, with an estimated CAGR of 21.5% through 2021.

With 99.7% of all businesses in the U.S. classified as small businesses (according to the U.S. Small Business Administration), these projections should be encouraging to community and regional banks that are investigating the plausibility of offering digital loans to this market. The numbers indicate that there is no shortage of small businesses looking for funding.

DOWNLOAD THE ARTICLE (PDF)

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Topics: Digital Lending, Digital Strategy, non-bank lenders

The business case for adopting digital automation for small business and consumer loans

Posted by Trevor Knott, Sr. VP Business Development on Dec 4, 2017 5:47:53 PM

The small business and consumer unsecured loan market is enormous—$1.3 trillion by some estimates. For community and regional banks under $10 billion in assets, however, this market is quickly becoming a missed opportunity. Banks this size have a mere nine percent penetration into the market for small business loans under $100K and only an 11 percent share of the personal loan/credit card market. These paltry numbers are disappointing, especially when you consider institutions of this size used to stake claim to these loans before ceding them to non-bank, online lenders.

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Topics: Digital Lending, Digital Strategy, non-bank lenders

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