/financial inclusion

Discussion
3 reasons why lending companies should use open banking
Ketharaman Swaminathan

Ketharaman Swaminathan

  What about Klarna, then? The Swedish lender has been doing virtually a carbon copy in EU of what BML was doing in the US. Memory serves, it's at least 10 years old and has been working without Open Banking. 
3 reasons why lending companies should use open banking
Lisa Terziman

Lisa Terziman

  Hi Ketharaman! That's great that there are other alternative ways of providing instant credit in the US and India. However, this article is explaining the main benefits of using open banking in EU, where we have the PSD2 legislation. Here a good part of lenders are relying on financial bank data in one way or another, but most of the processes are still manual (e.g. collecting bank statements). Using open banking, lenders can significantly improve their existing flows and get more insights on the end-customers for a more precise analysis.
3 reasons why lending companies should use open banking
Ketharaman Swaminathan

Ketharaman Swaminathan

  Nonbank Lenders like BillMeLater and Affirm (USA), ZestMoney and LazyPay (India) have been providing Instant Credit for 5-10 years without accessing bank accounts. While this post explains how Open Banking can be used by Lenders, I didn't find a compelling reason for why Open Banking is required by Lenders in the first place. 
Goldman Sachs on its way to dominating the fintech market
Ketharaman Swaminathan

Ketharaman Swaminathan

  For all its name and fame, Goldman Sachs was not a retail bank. Its forays like Marcus, Apple Card are ways by which GS is trying to get a foothold in retail banking. Only time will tell how this goes.  Sorry but you've misread the lending market in India. It's not that "Bank has largely failed to adapt to the needs and the reality of its surroundings". It's that banks have learned from past lessons and created this reality. Loan recovery is a huge challenge in India. Many banks and NBFCs went aggressive in consumer loans 10-20 years ago and burned their fingers - even shut down - when delinquent outstandings went through the roof, and they had little or no hope of collecting on them e.g. Citi, Barclays, Fullerton. That's why, this time, they choose to lend wholesale to fintechs. Only time will tell how Fintechs will fare when it comes to recovery. At least, if they fail, taxpayer's money won't be used for bailouts. So, by staying away from subprime loans, which form the bulk of fintech's portfolio, banks are behaving responsibly. That said, when it comes to lending to prime borrowers, many banks match the CX of fintechs.
Financial Inclusion Analysis
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The impact of fintech on cross-border payments
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The impact of fintech on cross-border payments

In a new staff discussion note, the IMF examines the fintech revolution, with a focus on the use of DLT in cross-border payments.