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Frank Tian

šŸ™…ā€ā™‚ļø Loan Application Not Available

A newly launched loan product between a bank and its non-bank partner has suspended applications for days.


According to unnamed sources, the program quickly runs into a fraud problem.


A few thoughts - not only based on this particular case.


šŸ“Œ It is best to embed the lending product within the partnerā€™s existing process vs. a simple distribution channel. If the fund goes to the consumer directly instead of going to the partner, naturally it leads to adverse selection (fraud).


šŸ“Œ Engage risk and fraud teams early on. This sounds obvious - but the conversation could be lost in a large bank with centralized service centers vs. multiple product owners.


šŸ“Œ Go slow and steady, especially with a new business model. Burning the budget/building the volume up before fiscal year-end is not a good reason to go full speed ahead. A baby never hits the ground running.


šŸŸ¦ A BaaS Playbook




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