Today’s traditional credit models limit the banks’ ability and appetite to extend credit to SMEs and high-risk borrowers because of strict regulatory requirements. As a result, SMEs don’t have access to sufficient funding. Banks are underserving this market, causing alternative sources of funding such as venture capital and crowdfunding to arise.
Goals and Objectives
- Participate in the growth of the crowdfunding and venture capital markets.
- Expand client base and move into new markets.
- Close the SME funding gap.
- Establish new relationships with customers to open up new opportunities as they grow and require more complex lending requirements.
- Provide new investment opportunities to fund the platform off-balance sheet.
- New settlement platforms
- Digital platforms
- New risk scoring models
Use Case Summary
As an intermediary for alternative sources of capital, banks can originate loans off the balance sheet with the associated risk diversified among a crowd of investors. Cloud-based platforms can be quickly deployed and scaled, such as crowdfunding platforms. These platforms work in partnership with existing fintech platforms or bank-owned or white-labeled platforms.