VARENGOLD Bank has unveiled its new strategy and rebranded website, as it focuses on developing more partnerships with online lending platforms.
The German bank, which has funding agreements with a number of peer-to-peer lenders including the UK’s MarketInvoice, said that it is “significantly expanding” its marketplace banking business, with a team of 20 members now dedicated to the screening of loan platforms as potential partners.
“To help us decide which platforms we can collaborate with, we have developed our own assessment model,” said Varengold board member Frank Otten.
“In this process, we benefit from our prior engagement with the lending sector which began in 2013.”
He added that there are no consistent standards for assessing the creditworthiness of borrowers or the risk of credit default within Europe.
20 marketplaces are already ongoing partners of Varengold. Each onboarding process is designed individually and the team actively and directly participates from an early stage of a platform’s formation, the bank said.
Varengold increased its capital over the summer in order to scale up the business. It now has total assets of almost €700m (£628m).
Dr. Bernhard Fuhrmann, member of the bank’s board of managing directors, said that there were “obvious” synergies between banks and marketplace lenders.
Banks bring regulatory expertise and financial resources to the table, while fintechs can rethink financial services from a customer perspective and have no IT legacy burden so are streets ahead technologically, he said.
Otten predicts that the EU’s Revised Payment Services Directive (PSD2) – which mirrors Open Banking in the UK – will help marketplace lending volumes in Europe to triple by 2022.
In 2017, around €3.8bn was lent via platforms throughout Europe.
“The PSD2 guideline is a good example of how the intelligent and secure use of data can enhance the performance of new technologies while at the same time greatly simplifying the process,” said Otten.
In addition to the revamped website, Varengold opened a new branch in Sofia, Bulgaria in November, underlining the potential the bank sees in Southern and Eastern Europe.