Upstart, SoFi, LendingClub three P2P lending ratio

P2P lending refers to a micro-lending model that gathers funds from fund providers through the Internet by means of crowd funding and lends them to fund demanders. Effectively bring borrowers and lenders together through the platform. P2P lending services have flourished everywhere, especially in the United States, but it is even more difficult to stand out among American P2P lending platforms. Among the many P2P platforms in the United States, Upstart (hereinafter referred to as UPST), SoFi, and LendingClub must be discussed. Today, Mark will show you the similarities and differences between these three lending platforms.

● From the perspective of business model:

Only UPST uses the "notarization model", that is, the platform cooperates with the bank, the bank lends the loan, and then the creditor's rights are transferred to investors or institutional investors, creating an ecosystem of UPST, banks and borrowers, while allowing all three parties to can benefit from it. The other two use the "balance sheet model", which simply means that the platform lends its own funds and records it on its own balance sheet. Therefore, from the perspective of business model alone, it can be seen that UPST and traditional banks have adopted a cooperative relationship; while SoFi and Lending Club are competitive, and the subsequent acquisitions of banks by SoFi and LendingClub can prove this kind of statement.

● From the perspective of customer groups:

The main customer groups of UPST and SoFi are similar, mainly young people. UPST is a newcomer to the society, while SoFi started with student loans and provides different financial services around the needs of users' life cycle. This strategy makes SoFi have a The advantages of one-stop finance and product diversification. The Lending club customer base is slightly different from the above two, mainly distributed in the middle-class young adults, providing personal loan services.

●From the perspective of lending technology:

Both UPST and Lending club have AI lending technology, but UPST's technology is more mature. Compared with traditional credit models, the approval rate increases by 26%, the real annual interest rate for borrowers decreases by 10%, and does not involve manual review. Automatic lending cases reached 71%, and the accuracy of UPST's lending model has become its main moat, while providing borrowers with lower loan interest rates. In terms of lending, SoFi has strict conditions to focus on high-quality users, and is equipped with social finance, that is, through the establishment of social relationships (communication between students and alumni) to reduce the default rate, and use psychological factors to achieve a win-win situation for all parties .

●From the perspective of business layout:

SoFi continues to move towards "one-stop finance". In addition to loans, it also has a variety of financial products and services, including credit cards, investment and wealth management, career coaching, etc., and has acquired payment software company Galileo and digital banking software provider Technisys. Users promote their services for free. In addition, "taking services out of the United States " , it bought 8 Securities, a Hong Kong investment company, to enter the Hong Kong market, and advertised the use of artificial intelligence to provide automated financial advisory services.

Lending Club was exposed to illegal lending in 2016, resulting in a large loss of investors and slowing loan growth. Customers have turned to other P2P companies, and the advantages of advanced players have gradually been wiped out. Therefore, Lending Club announced that it will close the P2P platform in 2020 and transform into a A full-service fintech marketplace bank. It also verifies that the original acquisition of Radius was to obtain a banking license to achieve transformation, not to further develop P2P business.

In terms of business, UPST attempted to enter the auto loan market by acquiring Prodigy Software, a sales and service system company whose customers include Toyota, Honda and Ford as a communication platform between dealers and car buyers. At present, the main problem of UPST is that the customer base is too similar to SoFi, and a large part of the student market or young people has been eaten by SoFi, so whether UPST will use its artificial intelligence technology to bring cross-domain development? It will still focus on focusing on the current loan market, which will become a big attraction in the future.

#mark point of view

P2P lending shows different competitive factors in different countries. In a country like the United States, although there is no special law, the original legal system and regulatory agencies are complete, so it is considered stable in development, and there are relatively few problem platforms, such as high-interest persuasion in the name of borrowing. By means of illegal fund-raising, packaging lending into financial products, or enticing investors to invest in the form of risky reserves.

This also allows the above-mentioned three platform operators to more actively reduce platform risks and accurately assess credit, which is reflected in the use of their business models and technologies, and can also make full use of the advantages brought by P2P.

Looking back at the development of P2P lending in Taiwan, the competent authority has not enacted a specific law, but in order to reduce risks, it is believed that P2P platforms must cooperate with traditional banks, which also causes great difficulties for industry players to find cooperative banks, unable to focus on Its own development also greatly reduces innovation opportunities.

In 2022, the Financial Supervisory Commission will open the personal credit score data in the Joint Registration Center to be directly transmitted to P2P lenders through online intermediaries. In order to protect the security of the data, corresponding restrictions will also be made. For example, it must be registered and established for at least 3 years, and the capital The amount should be more than 100 million yuan, or the capital should be more than 20 million yuan and the ISO27001 standard certification should be obtained. Although it is only a process change, it may give a new look to the development of P2P lending.