By Brad Powell

Welcome to the third in our series on alternative lending. Previous installments have covered the basics of alternative lending and the ways traditional lenders are responding. This post looks at the areas where the most opportunity seems to lie for banks and credit unions who want to compete in this space.

If you were to ask Larry Summers, the former U.S. Secretary of the Treasury, where the greatest opportunities rest in alterntive lending, his answer would likely be two words long: Small business. Summers has gone so far as to predict that eventually, alternative lenders could capture 70 percent of the small business lending market.

"This is a challenging time for the American economy," Summers was quoted as saying in Inc. "The conventional financial sector has, in important respects, let all of its main constituents down over the last generation, and technology-based businesses have the opportunity to transform finance over the next generation."

Read more ...

By Brad Powell

In a blog post last month, I broke down the three reasons that the line of business and IT departments at many credit unions can't get on the same page. Those reasons can be summed up as:

• The vastly differing level of detail each side offers and expects when discussing a project;
• The different ways the two organizations define the desired results of a given project; and
• A difference in the language each side uses when talking about technology.

Given that these differences exist, the next logical question is "How can a credit union solve them?" 

What follows are my suggestions on fixing each element of the disconnect between the line of business and IT:

Read more ...

By Brad Powell

I recently wrote a post looking at the relatively new phenomenon of alternative lending. Today's post looks at how banks are responding as alternative lenders start to see success.

In a recent survey, just seven percent of banks said they felt alternative lenders posed the greatest threat to their business. But that doesn't mean some traditional lenders aren't responding.

The responses banks and credit unions have come up with fall into two broad categories: competing with alternative lenders head-on, and investing in them.

And some traditional lenders are doing nothing. So far.

Read more ...