I just returned from LEND360, another in-person conference that was very much worth the trip to Dallas.
The event gathered leaders from across the country to talk about the trends and technologies emerging in online lending. In our discussions, two big takeaways surfaced:
Fraud is at the forefront: The pandemic and subsequent decline of in-branch lending resulting in an increase of online lending continues to drive the push for better fraud detection models, methods and solutions. While the sheer volume of fraudulent account application attempts has increased, several tactics have been shut down due the technology provided by solution providers and the lenders themselves. While the controls put in place have stopped the less sophisticated schemes, fraudsters will undoubtedly discover automated methods that have success rates that make the effort worth their while.
Unlike the traditional banking industry, non-banks and non-traditional lenders are combatting this by consistently testing new data in an effort to achieve even a small percentage of lift in the amount of fraud detected. The industry is truly facing the challenge of fraud head-on in an approach that is both innovative and tactical.
Partnerships = Opportunity: Where many traditional large banks prefer to incorporate fraud protection and mitigation into broader operational platforms, online lenders are looking at building their own custom solutions using multiple partners and data sources.
It was clear from a lot of the discussions I had that online lenders are seeking small- to mid-sized vendors that are more nimble and responsive than the big players, and who can provide the level of attention and customized support and service they need. They’re also looking for fraud and other tech providers who are open to teaming with other partners to provide exactly what they’re looking for.