Could Siri, Alexa, and Video be the New Frontier for Lenders?
January 25, 2022
The annual fintech study published by Smarter Loans revealed that 25% of respondents had used either Alexa, Siri, or another voice search to find information about financial services.
Voice devices, it appears, are not only getting better at answering regular questions, but users are also getting more comfortable even asking them in the first place.
“Alexa, what is AltFinanceDaily?” for example, returns an accurate reply despite our not having made any efforts to opt-in to the device’s knowledge base. Alexa just knows.
So why bother performing an old-fashioned Google search? Turns out, it’s becoming less common to do. Only 57% of respondents said they discovered the lender they applied with through online search. 13% said they discovered them through social media. 8% came from a friend’s recommendation. 15% found them through a well-regarded “Loan & Financial Directory” (Smarter Loans, who authored the study).
Once on a lender website, users had questions. 27% read online articles and reports, 37% read reviews, 16% called the company, and 9% consulted a friend or family member.
60% of respondents said informative videos about a company or its products would increase their confidence in that company. That could be key since 66% of respondents said that they researched more than 3 lenders before applying for a loan.
All of the respondents resided in Canada. 92% of respondents also said that they were satisfied or very satisfied with their loan provider.
State of Fintech Lending in Canada Report Reveals Key Information for Lenders
November 23, 2020
Smarter Loans, Canada’s loan comparison giant, has published its 3rd annual State of Fintech Lending report.
“As Canadians stayed home longer, adoption of fintech products has accelerated dramatically,” the report says, accelerating trends that had already been developing for years. The data is based on survey results submitted by nearly 2,600 fintech lending customers.
While there are dozens of important takeaways, respondents indirectly signaled how valuable it is to be among the brands that are found first by borrowers.
That’s because loan applicants said that they researched fewer lenders than ever before (35% only researched 1 or 2 lenders before applying) and they spent less time researching lenders than ever before (31% said they spent less than 1 hour researching). Furthermore, 51% of respondents said that they only applied with a single provider.
This approach worked. Of those that got approved, 89% of respondents said that they were satisfied or very satisfied with their loan provider.
The trend should signal to lenders that borrowers may simply come to expect a satisfactory experience regardless of where they apply and that there is tremendous value in simply being the first 1-2 lenders that a prospective borrower considers.
And hint hint, it pays to be easily discoverable online. Fifty eight percent of respondents said they discovered their loan provider through online search.
Click here to view the full survey results in Smarter Loans’ official State of Fintech Lending.
Canadian Small Businesses Face Tough Challenges As Government Passes Over Fintech
April 8, 2020
This week the Canadian government announced its coronavirus economic relief plans. Among them are two initiatives that aim to assist small businesses: the Canada Emergency Response Benefit (CERB) and Canada Emergency Business Account (CEBA).
The first of these is a wage subsidy that will cover up to 75% of a company’s payroll. The hope being that this will postpone the overcrowding and clogging of the Canadian unemployment benefits system, known as employment insurance. However this program appears to appeal to only certain types of businesses. With subcontractors not qualifying as part of payroll, there is the fear that CERB could leave many small businesses and startups that rely on freelancers unprotected. As well as this, there is a requirement that the company’s most recent month of revenue be at least 30% less than what it was at the same time the previous year. This specification again acting as an obstacle to startups and high growth businesses.
The second is a loan program that is capped at CAN$40,000 with 0% interest for the first two and a half years, and then 5% annual interest beginning January 1, 2023. There will be an opportunity for the remainder of the loan to be forgiven if the business has repaid 75% by December 31, 2022.
According to Smarter Loans’ Vlad Sherbatov, the situation in Canada mirrors what is happening in the US with regards to PPP. “There are very little details available about how people are going to apply to get the funds,” the President and Co-Founder explained. “Nobody knows what’s actually happening and nobody knows when business owners can actually anticipate to receive any funding.”
Expressing frustration that the Canadian government chose to ignore non-bank lenders in favor of allowing Canadian banks like BMO, RBC, and TD to distribute the funds, Sherbatov noted that it is the lenders who have the technology and processes to speedily disperse capital. “We did a survey that said almost 50% of business owners said they would shut down in less that four weeks without additional help … so it’s not that it’s just fine that there is help available, it’s how fast can [business owners] get the help, because every day that goes by makes the situation worse.”
Speaking to Kevin Clark, President of Lendified, he echoed Sherbatov’s concern.
“It’s all good that the government is making these decisions, but the capital has to move and the programs have to be in effect. So announcing these things is one thing, actually practicing them and executing them is another. There’s a time lag that could potentially put companies out of business and so, for us, it’s about trying to connect with a lot of these borrowers to say, ‘What can we do to help you with payments?’ But at the same time, we don’t want deferments for a long period of time because then our revenue base is challenged. So the fintech lenders all have significant challenges at hand, because defaults that move from within the normal course of between 5 and 10%, say now to between 15 and 25%, or even higher, are significant challenges for the operations of our business.”
Also a member of the Canadian Lenders Association, Clark is involved in the CLA covid-19 working group that was launched in March. Formed with the intention to assist the government’s approach to capital distribution, Clark was disappointed with the government’s decision to exclude non-bank lenders after the group reached out to both the Ministry of Finance and the Business Development Corporation of Canada. And with no government funding operation to assist, Clark, like many lenders in Canada, is turning toward his existing customers, hoping to keep their heads above water.
“What we’re all doing independently is trying to work with our customers to give them guidance on what is going on in Ottawa. And so most of us have made website adjustments to give some education to interested parties on what’s available in terms of subsidy. We’re trying to provide support to our customers through deferments and so forth, just as every lending institution is doing these days. It’s just that I think it’s harder for us and smaller firms that don’t have the margin and the wherewithal to withstand any sort of significant timeline in this situation. So it’s a little bit of week by week for us, trying to manage our own costs and so forth and keep our customer bases as happy and healthy as we can.”
Report Finds Canadian Alternative Lending Market Making Gains
January 8, 2020
A study released by Smarter Loans this week indicates that the Canadian alternative finance industry has grown since last year’s iteration of the report. Titled ‘The State of Alternative Lending in Canada 2019,’ the report highlights how the market has developed in regard to the age and gender of its customers, the level of trust in online lenders compared to financial institutions, as well as the levels of satisfaction felt by Canadians dealing with alternative funders.
The first of these, regarding aspects of the customers’ identities, demonstrates that generational gaps are as wide as they’ve ever been amongst customers. Each age bracket questioned by the study showed differing priorities when seeking a loan. Generation Z, fitting in between those aged 18-24, paid attention to funders’ track records and reputation when looking for funding; whereas millennials (25-34) sought speedier applications and approvals. Generation X (45-54) however appeared more money-minded, with the priority being placed on terms and interest rates; and Baby Boomers (55-64) demonstrated a desire for having someone to talk to, putting customer service at the top of their list.
Vlad Sherbatov, Smarter Loans’ President and Co-founder, told AltFinanceDaily that these differences can be summed up as the values each generation has developed through experience. Explaining that Gen Z is “all about the personal brand,” Sherbatov said, “People that are younger now really associate with the company they work for, they ask, ‘Am I aligned with or would I be embarrassed supporting this brand?’” While the Millennials’ response indicates a greater desire for results, “as the age progress the intent increases.” Gen X is “more educated and experienced people,” who appear to place the greatest importance on money; and Baby Boomers, the least digitally fluent group, just want the online applications to go smoothly and to have ready access to assistance.
As well as age, gender appeared to divide customers, with women more likely to spend more time researching loan providers than men; and more men saying that they were interested in approaching a traditional financial institution for a loan in the future, with half of them being of this opinion compared to just 39% of women. As well as this, it was found that women are more likely to find the application easier, but are less likely to be approved than men.
Regarding trust and transparency, roughly 70% of Canadians believe alternative finance to be a safe way of getting a loan. With 80% of customers feeling that they are informed enough of the industry’s practices and 69% saying that they believe online loan providers are transparent about their fees, interest rates, terms, and conditions.
According to Sherbatov, “this is a trend that’s been moving in a positive direction” over the years. With the 2018 version of this study emphasizing the need to build trust with Canadians to reduce that 30% which is holding out on, Sherbatov maintains the need to do more. “The more transparency from lenders, the more trustworthy it’ll be, the further the industry will advance.”
Customers appear to be mostly satisfied with the service they received from alternative lenders in 2019, with the average rating taken from the 2,415 respondents being 3.4 out of 5. This being a 0.2 bump up from last year’s score. Interestingly, one of the sectors reporting the highest levels of satisfaction were those customers who received payday loans, noting that they appreciated the speed with which they were approved.
Altogether, the report paints a picture of the Canadian scene as a market still in flux, where growth is happening, albeit slight, and both the customers and the lenders still have much to learn from each other.
2019 Top 25 Executive Leaders in Lending – Canadian Lenders Association – Presented By BMO
November 11, 2019
The Canadian Lenders Assocation (CLA) received 124 nominations for these awards from leaders in lending across the country. The CLA’s goal is to support access to credit in the Canadian marketplace and champion the companies and entrepreneurs who are leading innovations in this industry.
The Top 25 finalists in this report represent various innovations in the borrower’s journey from innovations in artificial intelligence powered credit modelling to breakthroughs in consumer identity management using blockchain technologies. These finalists also represent solutions for a wide spectrum of borrower maturity and needs, ranging from consumer credit rebuilding all the way to senior debt placements for global technology ventures.
See The Leading Companies Report Here
See The Leading Executives Report Here
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Mark Cashin
CEO of myBrokerBee | Ontario After a career in commercial finance and being CEO of Transpor, Mark Co-founded myBrokerBee a mortgage broker platform that provides transparency to private lenders and their clients. |
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Avinash Chidambaram
CEO of Ario Platform | Ontario Through his experience as Product lead at Interac and Blackberry, Avinash has helped bring together an accomplished and talented group of experts in Data Science, Machine Learning, Security, Software Development to successfully develop this banking services software platform Ario. |
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Evan Chrapko
CEO of Trust Science | Alberta Evan is the founder and CEO of Trust Science, a leader in organizing alternative credit data. As a saas founder and CEO, Evan has done over 500mm in startup exits. |
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Kevin Clark
President of Lendified | Ontario Kevin is a recognized leader in the financial services industry with over 30 years of experience. Kevin has helped create the voice of Canada’s SME lending ecosystem through his leadership of Lendified and the CLA. |
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Jerome Dwight
VP of Cox Automotive | Ontario Jerome established Nextgear Capital in Canada to become the largest specialty finance company in the automotive sector. Jerome is a Globe & Mail 40 under 40 winner and previously lead RBC’s international wealth management, private banking and asset servicing business. |
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Saul Fine
CEO of Innovative Assessmer | Israel Saul is a licensed organizational psychologist and psychometrician, and a former lecturer in psychology at the University of Haifa. Saul is a global leader in the use of psychometric data for credit scoring and financial inclusion. |
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David Gens
CEO of Merchant Growth | BC David is the Founder and CEO of Merchant Growth, which grew from its humble beginnings in his apartment to offices in both Toronto and Vancouver. David now leads one of Canada’s largest online small business finance companies. |
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Bryan Jaskolka
COO of CMI | Ontario Nominated for the 2018 Mortgage Broker of the Year, Bryan Jaskolka is an expert in Canadian mortgage financing with a particular focus on the alternative lending space and mortgage investing. |
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Peter Kalen
CEO of Flexiti | Ontario Peter is a leader in Canada’s retail financing market. Before founding Flexiti, Peter was in senior leadership positions at Citi, PC Financial, and Sears Canada. Flexiti was recently named #7 on the Deloitte Fast50. |
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Yves-Gabriel Leboeuf
CEO of Flinks | Quebec Yves-Gabriel Leboeuf is the co-founder and CEO of Flinks. Under his leadership, Flinks has become a Canadian leader in banking data enablement. |
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Derek Manuge
CEO of Corl | Ontario Derek, also known as the “the quant from Canada” is the founder of the data-driven venture firm, Corl. Corl is one of Canada’s leaders in the use revenue-share financing models. |
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Keren Moynihan
CEO of Boss Insights | Ontario Keren Moynihan is co-founder and CEO of Boss Insights, a company that uses big data and AI to accelerate lending from months to minutes. With a Joint JD/MBA, Keren has a diverse background as a commercial banker, wealth manager and former founder of an impact startup. |
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Jason Mullins
CEO of Goeasy | Ontario Jason is President and CEO of goeasy, a publicly listed consumer lender. Jason has lead the company to become one of the largest and most innovative lenders in the country. |
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Paul Pitcher
CEO of SharpShooter Funding | Ontario After founding First Down Funding, an alternative lending firm for SMEs in Baltimore, Paul expanded his business to Canada through the subsidiary Sharpshooter Funding. |
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Brendan Playford & Cate Rung
Co-Founders of Pngme | USA Cate, ex-Uber and Brendan, a blockchain and agro-finance entrepreneur are the co-founders of Pngme, an alternative lending platform for financial institutions in emerging markets who serve Micro, Small, and Medium-sized Enterprises. |
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Wayne Pommen
CEO of Paybright | Ontario Wayne is the President and CEO of PayBright. Wayne is also a director of IOU Financial Inc and of HBC. Previously, Wayne was a Principal at TorQuest Partners, one of Canada’s leading private equity firms, and a management consultant with Bain & Company in the UK, the US, and Canada. |
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Adam Reeds
CEO of Ledn | Ontario Adam is a pioneer and thought leader in the digital asset backed lending space. Ledn is focused on building innovative financial products in the emerging digital asset space, with a focused mission to help people save more in bitcoin. |
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Adam Rice
CEO of LoanConnect | Ontario Adam has played a pivotal role in building one of the largest online markets in Canada for unsecured loans. |
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Mark Ruddock
CEO of BFS Capital | Ontario Mark is an experienced international CEO with two successful exits and over 20 years of experience at the helm of VC backed technology and fintech startups. In 2019 Mark announced BFS Capital’s expansion to Canada with a new 50 engineer data science hub in the heart of Toronto. |
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Vlad Sherbatov
President of Smarter Loans | Ontario Vlad Co-founded Smarter Loans in 2016 with the goal of helping Canadians make smarter financial decisions. Since then, Vlad has grown the platform into one of the go-to resources for Canadian borrowers. |
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Steven Uster
CEO of FundThrough | Ontario Steven is the Co-Founder & CEO of FundThrough, an invoice funding service that helps business owners eliminate “the wait” associated with payment terms by giving them the power and flexibility to get their invoices paid when they want, with one click, and in as little as 24 hours. |
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Dmitry Voronenko
CEO of Turnkey Lender| Singapore Dmitry, CEO and Co-founder of TurnKey Lender, holds a PhD in Artificial Intelligence. Dmitry was recently named SFA’s Fintech Leader of the year. |
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Neil Wechsler
CEO of Ondeck Canada | Quebec Neil briefly practiced law before becoming President and CEO of Optimal Group Inc. where he grew the company from a start-up to a leading NASDAQ-listed self-checkout and payments company. Neil later co-founded Evolocity, which in 2019 became OnDeck Canada. |
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Michael Wendland
CEO of Refresh | BC Michael has led Refresh Financial’s rapid growth since its founding in 2013, including a recent ranking of number 40 on Deloitte’s Fast 500. |
Canadian Lender’s Association Awards Leading Executives and Companies
November 11, 2019
Today the CLA announced the winners for its 2019 Leaders in Lending Awards. Highlighting the efforts of exceptional players within the fintech and alternative finance fields, the awards seek to “celebrate the industry and celebrate all the cool fintech things happening in Canada,” according to the CLA’s Strategic Partnerships Director Tal Schwartz.
Now in its second year, the Leaders in Lending Awards are split into two categories, with one focusing on the efforts of companies in the industry and the other on individual executives. 2019 will be the first year that the latter of these categories is incorporated. The awards will be imparted to their new owners at the Canadian Lenders Summit later this month, where a special prize will also be given to one winner from each category.
Among the winners in the first category are Borrowell, IOU Financial, and Michele Romanow’s Clearbanc. While making an appearance in the second category are David Gens of Merchant Growth, Paul Pitcher from SharpShooter Funding, Smarter Loans’ Vlad Sherbatov, and Kevin Clark from Lendified.
The criteria for the awards were based upon three tenets, these being a commitment to the “use of advanced fintech solutions” to solve challenges in the lending process, the “implementation of new or innovating lending strategies or business models,” and evidence of successful outcomes following the implementation of new fintech or a new business model.
When asked about possible expansions to the awards in the future, Schwartz was receptive to the idea of covering more ground with the prizes, saying “I definitely think we’ll expand the categories.” Mentioning that there’s a host of niches that are worth highlighting, such as blockchain, psychographic credit scoring, and credit rebuilding, which deserve their day in the sun.
“We have a mandate as a trade group to celebrate the industry,” emphasized Schwartz. And that celebration will be taking place on November 20th at the Canadian Lenders Summit in Toronto.
Spotlight on AltFinanceDaily CONNECT Toronto
July 30, 2019
As the heat of the Toronto sun split the stones outside, the crowd inside the Omni King Edward’s seventeenth-floor Crystal Ballroom mingled and munched as part of AltFinanceDaily’s most recent CONNECT event.
The first of its kind to be held in Toronto, the CONNECT series are half-day events that take place in both San Diego and Miami as well. Despite not being as established as the latter two, Toronto proved just as eventful, with a variety of speakers and topics broached, as well as a host of attendees from differing backgrounds making an appearance. It was par for the course for an inaugural AltFinanceDaily show with the attendance figures being reminiscent of AltFinanceDaily’s first ever event in the USA, a market that’s 10x the size.
The day was kicked off by entrepreneur, a dragon on the Canadian Dragons’ Den series, and co-founder of Clearbanc, Michele Romanow, whose anecdotes detailed the adventures that accompany the beginning of a startup. Regaling the audience with the story of Evandale Caviar, Romanow began with telling the room of a post-college venture that saw her working tooth and nail to secure a fishing license, studying YouTube fish gutting tutorials that were exclusively in Russian, and getting her hands dirty with the other co-founders when the time came to put their time spent online to use.
But it wasn’t all blood and glory for Romanow, as the tale shifted from one of youthful expansion to one of reflection and acceptance of the unknown. Speaking on the effect of tech giants in various fields, Romanow explained that “we have no idea of how these industries will shape out.” The likes of Uber and AirBnb never planned change the world, just to change a product and thus solve a problem, and their meteoric rises are unpredictable as a result. Iteration, rather than innovation, is what drives a company forward according to Romanow.
And this sentiment was brought further along with the following panel, which featured Vlad Sherbatov of Smarter Loans, Paul Pitcher of SharpShooter Funding, and SEO expert Paul Teitelman, speaking on the trials and novelties of the sales and marketing scene. Offering wisdom on various aspects of the field, the three men covered the need to go beyond the traditional forms of advertising, instead looking outward towards unorthodox methods of marketing; the hardships that come with the grind of a sales job; and the role that SEO can play when raising public awareness of your company; respectively.
“It’s a matter of spreading the word,” one conference goer noted when asked about the sales panel afterwards. “Businesses have to know who we are, and we’re working on that.”
Similarly, Martin Fingerhut and Adam Atlas discussed the existing legal topics of note to Canadian alternative financing companies, as well as those incoming rulings that may be worth knowing about. Covering both the English-speaking provinces and Quebec, the duo gave a comprehensive crash course on the legal landscape of the industry, highlighting laws unique to the regions. Aaron Iannello of Top Funding considered the talk to be particularly engaging, commending it for relaying information that might otherwise be unknown to American companies.
Following this, Kevin Clark, President of Lendified, took to the stage to talk about the importance of the Canadian Lenders Association (CLA). Saying that in the absence of a regulatory body, the CLA seeks to offer guidance to those companies who are looking for it. Clark asserted that “it’s a good thing for our industry to have oversight from a regularly body,” and that he looks forward to the day when one is established.
And before wrapping up the speakers for the day, Clark was joined by IOU Financial’s President, Robert Gloer, to discuss contemporary risk management. Covering everything from the next recession to the emergence of AI, the pair, which accumulatively have been in the industry for decades, offered knowledge learnt from years of experience in both the pre- and post-crash eras.
And the prophesizing of what will be the next big episode to shake the industry continued beyond the day’s scheduled agenda as many attendees continued on well into the evening at smaller networking functions offsite.
As the sun started to touchdown on the tips of Toronto’s skyscrapers, the salvo of excited conversation briefly harmonized to produce a singular axiom, that there was an abundance of opportunity in Canada.
2M7 Financial Solutions and the State of Alternative Funding in Canada
July 1, 2019
“What’s a cash advance?”
This is how Avi Bernstein, CEO of 2M7 Financial Solutions, recalled a typical conversation in 2008, when his company was founded in the Canadian market. According to him, customer knowledge of alternative financing methods was dismal, partly due to a handful of homogenous banks dominating the scene as well as a void of funders in the country.
Flash forward to 2019 and 2M7 is operating within a Canadian market that is much more trusting and knowledgeable of merchant cash advances, although it is not yet at the levels witnessed in the U.S.
“Low hanging fruit,” is how Bernstein describes the industry now, as small and medium-sized businesses are flocking to 2M7 and its contemporaries, which offer higher approval ratings and faster confirmation of funding than their more traditional counterparts. In fact, according to a 2018 study conducted by Smarter Loans, 24% of those Canadians surveyed stated that they sought their first loan with an alternative lender that year. As well as this, only 29% reported that they pursued funding from more established, traditional financial institutions and 85% of those that received financing confirmed their satisfaction.
Figures like these help to explain why the Canadian market has seen a rise in interest from foreign businesses in the previous five years. Greenbox Capital, First Down Funding, and Funding Circle are examples of those companies who have successfully implanted themselves within the market, a feat that Bernstein claims isn’t easy.
“It’s a different business,” he notes when comparing the market to that of the U.S. Listing the dissimilarities in market maturity levels, sales tactics, processing channels, and collection styles, as well as the currency exchange rate that’s to be considered, Bernstein says that he’s found those American funders who come to Canada unprepared never stay long enough to become a fixture of the industry.
Warning against half measures, Bernstein explains that “You’ve gotta put boots on the ground” if you want to succeed in Canada. Giving the impression that unless you’re willing to learn the rules applied in the market, hire people, and house them in an office north of the American border, Bernstein is keen to highlight what’s required of foreign companies looking with interest at Canada.
But it’s a risk-reward situation. The market is opening up as more funders enter it, and with the arrival of larger companies, such as OnDeck Capital, more resources are being devoted to raising awareness of alternative financing amongst Canadians.
Meanwhile, homogenous firms like 2M7 are continuing to grow in this developing market. Receiving an average of 200-300 applications for funds per month, 2M7 is capitalizing off opportunities by proving themselves to be open to a wider range of applications. Bernstein asserts that “we try to fund everything,” and that they keep an “open mind to every opportunity” that lands on their desk. Perhaps this is a mindset not shared by more conservative of funders in the industry, but, as Bernstein says, “we’re here, we’re funding, and we’re ready to rock n’ roll.”
You can meet Avi Bernstein and 2M7 at deBanked CONNECT Toronto on July 25th.
