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Displaying results 1 to 9 of 9.

  1. The roles of alternative data and machine learning in Fintech lending
    evidence from the LendingClub consumer platform
    Author: Jagtiani, Julapa; Lemieux, Catharine M.
    Published: April 2018
    Publisher:  Research Department, Federal Reserve Bank of Philadelphia, Philadelphia, PA

    Supersedes Working Paper 17-17. Fintech has been playing an increasing role in shaping financial and banking landscapes. There have been concerns about the use of alternative data sources by fintech lenders and the impact on financial inclusion. We... more

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    Helmut-Schmidt-Universität, Universität der Bundeswehr Hamburg, Universitätsbibliothek
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    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
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    VS 438 (18,15)
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    Supersedes Working Paper 17-17. Fintech has been playing an increasing role in shaping financial and banking landscapes. There have been concerns about the use of alternative data sources by fintech lenders and the impact on financial inclusion. We compare loans made by a large fintech lender and similar loans that were originated through traditional banking channels. Specifically, we use account-level data from LendingClub and Y-14M data reported by bank holding companies with total assets of $50 billion or more. We find a high correlation with interest rate spreads, LendingClub rating grades, and loan performance. Interestingly, the correlations between the rating grades and FICO scores have declined from about 80 percent (for loans that were originated in 2007) to only about 35 percent for recent vintages (originated in 2014–2015), indicating that nontraditional alternative data have been increasingly used by fintech lenders. Furthermore, we find that the rating grades (assigned based on alternative data) perform well in predicting loan performance over the two years after origination. The use of alternative data has allowed some borrowers who would have been classified as subprime by traditional criteria to be slotted into “better” loan grades, which allowed them to get lower priced credit. In addition, for the same risk of default, consumers pay smaller spreads on loans from LendingClub than from credit card borrowing

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Series: Working paper / Research Department, Federal Reserve Bank of Philadelphia ; 18, 15 (April 2018)
    FRB of Philadelphia Working Paper ; No. 18-15
    Subjects: fintech; LendingClub; marketplace lending; alternative data; shadow banking; P2P lending; peer-to-peer lending
    Scope: 1 Online-Ressource (circa 32 Seiten), Illustrationen
  2. The role of punctuation in P2P lending
    evidence from China
    Author: Chen, Xiao; Huang, Bihong; Ye, Dezhu
    Published: 2017
    Publisher:  EGC, Nanyang Technological University, Singapore

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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Series: EGC report ; no: 2017, 07
    Subjects: P2P lending; information asymmetry; word; punctuation
    Scope: 1 Online-Ressource (circa 29 Seiten)
  3. Consumer lending efficiency
    commercial banks versus a Fintech lender
    Author: Hughes, Joseph P.; Jagtiani, Julapa; Moon, Choon-geol
    Published: April 2019
    Publisher:  Research Department, Federal Reserve Bank of Philadelphia, Philadelphia, PA

    We compare the performance of unsecured personal installment loans made by traditional bank lenders with that of LendingClub, using a stochastic frontier estimation technique to decompose the observed nonperforming loans into three components. The... more

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    Helmut-Schmidt-Universität, Universität der Bundeswehr Hamburg, Universitätsbibliothek
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    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
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    VS 438
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    We compare the performance of unsecured personal installment loans made by traditional bank lenders with that of LendingClub, using a stochastic frontier estimation technique to decompose the observed nonperforming loans into three components. The first is the best-practice minimum ratio that a lender could achieve if it were fully efficient at credit-risk evaluation and loan management. The second is a ratio that reflects the difference between the observed ratio (adjusted for noise) and the minimum ratio that gauges the lender’s relative proficiency at credit analysis and loan monitoring. The third is statistical noise. In 2013 and 2016, the largest bank lenders experienced the highest ratio of nonperformance, the highest inherent credit risk, and the highest lending efficiency, indicating that their high ratio of nonperformance is driven by inherent credit risk, rather than by lending inefficiency. LendingClub’s performance was similar to small bank lenders as of 2013. As of 2016, LendingClub’s performance resembled the largest bank lenders — the highest ratio of nonperforming loans, inherent credit risk, and lending efficiency — although its loan volume was smaller. Our findings are consistent with a previous study that suggests LendingClub became more effective in risk identification and pricing starting in 2015. Caveat: We note that this conclusion may not be applicable to fintech lenders in general, and the results may not hold under different economic conditions such as a downturn

     
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    Source: Union catalogues
    Language: English
    Media type: Book
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    Series: Working paper / Research Department, Federal Reserve Bank of Philadelphia ; 19, 22 (April 2019)
    FRB of Philadelphia Working Paper ; No. 19-22
    Subjects: marketplace lending; P2P lending; credit riskmanagement; lending efficiency
    Scope: 1 Online-Ressource (circa 36 Seiten), Illustrationen
  4. Promise keeping, relational closeness, and identifiability
    an experimental investigation In China
    Published: 2014
    Publisher:  Department of Economics and Finance, University of Guelph, Guelph, Ontario

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    Language: English
    Media type: Book
    Format: Online
    Series: Discussion paper ; 2014,05
    Subjects: Promise-keeping; P2P lending; relational closeness; identifiability; China; guanxi,mianzi; business ethics; experimental
    Scope: Online-Ressource (42 S.), graph. Darst.
  5. Fintech lending
    financial inclusion, risk pricing, and alternative information
    Author: Jagtiani, Julapa; Lemieux, Catharine M.
    Published: July 6, 2017
    Publisher:  Research Department, Federal Reserve Bank of Philadelphia, Philadelphia, PA

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    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Series: Working paper / Research Department, Federal Reserve Bank of Philadelphia ; no. 17, 17
    Subjects: fintech; Lending Club; marketplace lending; banking competition; shadow banking; credit spreads; credit performance; P2P lending; peer-to-peer lending
    Scope: 1 Online-Ressource (circa 48 Seiten), Illustrationen
  6. Open banking and customer data sharing
    implications for FinTech borrowers
    Author: Nam, Rachel J.
    Published: [2022]
    Publisher:  Leibniz Institute for Financial Research SAFE, Sustainable Architecture for Finance in Europe, [Frankfurt am Main]

    With open banking, consumers take greater control over their own financial data and share it at their discretion. Using a rich set of loan application data from the largest German FinTech lender in consumer credit, this paper studies what... more

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    With open banking, consumers take greater control over their own financial data and share it at their discretion. Using a rich set of loan application data from the largest German FinTech lender in consumer credit, this paper studies what characterizes borrowers who share data and assesses its impact on loan application outcomes. I show that riskier borrowers share data more readily, which subsequently leads to an increase in the probability of loan approval and a reduction in interest rates. The effects hold across all credit risk profiles but are the most pronounced for borrowers with lower credit scores (a higher increase in loan approval rate) and higher credit scores (a larger reduction in interest rate). I also find that standard variables used in credit scoring explain substantially less variation in loan application outcomes when customers share data. Overall, these findings suggest that open banking improves financial inclusion, and also provide policy implications for regulators engaged in the adoption or extension of open banking policies.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/266685
    Edition: First draft: Sept 23, 2022
    Series: SAFE working paper ; no. 364 (December 2022)
    Subjects: Open banking; FinTech; Marketplace lending; P2P lending; Big data; Customer data sharing; Data access; Data portability; Digital footprints
    Scope: 1 Online-Ressource (circa 63 Seiten), Illustrationen
  7. Which lenders are more likely to reach out to underserved consumers
    banks versus fintechs versus other nonbanks?
    Author: Dolson, Erik; Jagtiani, Julapa
    Published: [2021]
    Publisher:  Research Department, Federal Reserve Bank of Philadelphia, Philadelphia, PA

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    Source: Union catalogues
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    Series: Working papers / Research Department, Federal Reserve Bank of Philadelphia ; 21, 17 (April 2021)
    Subjects: fintech; P2P lending; consumer credit access; personal lending; credit cards; mortgage lending; online lending; credit offers
    Scope: 1 Online-Ressource (circa 52 Seiten), Illustrationen
  8. P2P lenders versus banks
    cream skimming or bottom fishing?
    Author: Roure, Calebe de; Pelizzon, Loriana; Thakor, Anjan V.
    Published: [2021]
    Publisher:  Leibniz Institute for Financial Research SAFE, Sustainable Architecture for Finance in Europe, Frankfurt am Main

    We derive three testable predictions from a bank-P2P lender model of competition: (a) P2P lending grows when some banks are faced with exogenously higher regulatory costs; (b) P2P loans are riskier than bank loans; and (c) the risk-adjusted interest... more

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    DS 431
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    We derive three testable predictions from a bank-P2P lender model of competition: (a) P2P lending grows when some banks are faced with exogenously higher regulatory costs; (b) P2P loans are riskier than bank loans; and (c) the risk-adjusted interest rates on P2P loans are lower than those on bank loans. We test these predictions against data on P2P loans and the consumer bank credit market in Germany and find empirical support. Overall, our analysis indicates that P2P lenders are bottom fishing, especially when regulatory shocks create a competitive disadvantage for some banks.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/243276
    Series: SAFE working paper ; no. 206
    Subjects: Share Economy; Verbraucherkredit; Kreditgeschäft; Bankenregulierung; Deutschland; P2P lending; bank lending; competition
    Scope: 1 Online-Ressource (circa 86 Seiten), Illustrationen
  9. P2P lenders versus banks
    cream skimming or bottom fishing?
    Author: Roure, Calebe de; Pelizzon, Loriana; Thakor, Anjan V.
    Published: [2021]
    Publisher:  Leibniz Institute for Financial Research SAFE, Sustainable Architecture for Finance in Europe, Frankfurt am Main

    We derive three testable predictions from a bank-P2P lender model of competition: (a) P2P lending grows when some banks are faced with exogenously higher regulatory costs, (b) P2P loans are riskier than bank loans; and (c) the risk-adjusted interest... more

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    We derive three testable predictions from a bank-P2P lender model of competition: (a) P2P lending grows when some banks are faced with exogenously higher regulatory costs, (b) P2P loans are riskier than bank loans; and (c) the risk-adjusted interest rates on P2P loans are lower than those on bank loans. We test these predictions against data on P2P loans and the consumer bank credit market in Germany and find empirical support. Overall, our analysis indicates that P2P lenders are bottom fishing, especially when regulatory shocks create a competitive disadvantage for some banks.

     
    Export to reference management software   RIS file
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/230680
    Series: SAFE working paper ; no. 206
    Subjects: Share Economy; Verbraucherkredit; Kreditgeschäft; Bankenregulierung; Deutschland; P2P lending; bank lending; competition
    Scope: 1 Online-Ressource (circa 84 Seiten), Illustrationen