Future Innovators: How Far Should They Push The Limits?

Q. What do you get when you cross the CFPB, the FTC and Six Alternative Lending CEOs? 

A. One heck of a conversation about the future of innovation in the financial services space. 

At The Innovation Project 2014, will CFPB Deputy Director David Silberman and FTC Commissioner Julie Brill make the case for why regulating new innovation is essential to protect the consumer from bad actors? If they do, will they cite the abuses of predatory lending practices, misuse of consumer data and lack of transparency about the details as evidence of that need? Or maybe argue why mobile and new P2P lending platforms give rise to new products that are outside of the traditional banking system and, therefore, need extra scrutiny? Maybe they’ll say we need to give these new guys a break.

What you can be sure of is that the CEOs of OnDeck, Lending Club, Fundera, Wonga, Veritec andZest Finance will argue why majoring in compliance when you’re a young innovator with new ideas simply kills innovation by diverting resources away from it before there is even proof that there’s a there, there. They’ll cite success stories about how many consumers and businesses have been helped by their products and how they’ve used technology to create real solutions for consumers and businesses that had no other options. They’ll argue that their regulatory landscape is subject to a variety of regulators already – the SEC, the FTC, the CFPB – and still very much a work in process that can also make investors skittish and interfere with their access to capital.

There are three things that both sides will agree on.

One. The market opportunity is huge: the size of the P2P lending market alone is estimated to be $11 trillion.

Two. That consumers and small businesses need access to alternatives to traditional financial-services providers. Since the Great Recession, banks have shut off the credit tap to businesses and consumers. Growth in the small-business sector, which drives 99% of jobs in the U.S. and about as many in the private sector in the UK, has been impacted as a result.

Three. We’re breaking new ground. These new lending platforms use technology and data to reinvent, literally, the loan-servicing model. They access data like inventory turns and cash flow cycles, and for consumers, social-media data to create new real time risk models. Loan terms are shorter – months and not years – and repayment schedules tight, sometimes even weekly or daily, to reduce the downside risk of default and to see how the borrower performs in real time. They use technology to conduct and service transactions online where approvals are made in minutes, not weeks.

So, who’s to know? … Maybe there will be a lovefest between these innovators and regulators. Or maybe there will be a brawl. But the only way you’ll know is to be at The Innovation Project 2014 on March 19th at 2:45 p.m. to see it all unfold.

Won’t you join us? Click here.

The Innovation Project 2014 | March 19, 2014

Meet the New Boss, Definitely Not the Same as The Old Boss: Reinventing the Way Consumers and Businesses Borrow Money

Conversation Starters

David Silberman, Deputy Director | CFPB

Noah Breslow | CEO | OnDeck

Panel Participants

Julie Brill | Commissioner | FTC

Nathan Groff | CEO | Intuition Systems

Jared Hecht | CEO | Fundera

Renaud Lapanche | CEO | Lending Club

Doug Merrill | CEO | Zest Finance

Mark Troughton | President | Wonga