JPMorgan Mum On P2P Lender Partnership

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JPMorgan is planning a new partnership with a peer-to-peer lender in an effort to reach more small business borrowers, but it won’t say who — yet.

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Reports by Bloomberg on Tuesday (Dec. 1) said JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon divulged plans for the bank to work with a P2P lender, though it declined to say which company it would be working with.

“We haven’t announced it yet. We’re going to be doing a thing with one of these peer-to-peer, small business lenders,” he said in Washington at a panel discussion. He added that the collaboration will be part of the bank’s efforts to reach borrowers that JPMorgan can’t address independently. “The kind of stuff we don’t want to do or can’t do, but there’s somebody else who can do it and do it probably well,” he said. “So, this is going to be collaborative.”

He added that while not all technologies in use by P2P lenders and alternative finance players will be useful to major banks, they can still provide valuable tools to traditional financial institutions.

“Some of this peer-to-peer stuff will end up being good; it won’t all be good,” he said. “You can use Big Data, all this other data, non-traditional data, could determine whether someone is a good credit or not.”

His statements echo recent sentiments among alternative lending players and analysts that predict a rise in alternative lending partnerships with major banks.

Earlier this week, Brock Blake, CEO of alternative lending platform Lendio, told PYMNTS that over the next few years, banks are likely to attract collaborative relationships with alternative lending players. Doing so, he said, would allow banks to keep small businesses as customers and maintain their accounts and yet still avoid lending to SMEs, which are considered high-risk and not sufficiently profitable to many major financial institutions.

Other major banks have confirmed the speculation. Bank of America CEO Brian Moynihan said only weeks ago that the nation’s biggest banks are looking to work with P2P lenders to provide newer, more sophisticated technologies to existing small business and consumer customers, according to Bloomberg.