Aaron Rosenberg's Profile
Great post! LendingClub is a fascinating company. I am especially impressed by their level of transparency, which you mention briefly above, that is in my view unparalleled across both established financial institutions and burgeoning fintech startups. Not only do they provide access to the raw data of their entire loan book, but they also offer a suite of helpful analytics online. This is clearly a distinctive marketing advantage, but do you think it leaves the door open to competitors? Obviously they are not sharing their underlying algorithm, but a sophisticated enough analyst might be able to find patterns. In short, do you think they have a sustainable edge (specifically, versus newer fintech players)?
Yes, absolutely – the whole business essentially hinges on their risk algorithm, which has proven itself only in this low interest rate / large spread environment. I’m very interested to see how the story plays out for CommonBond (and other similar marketplace lenders) as rates rise.
I’d also be keen to hear about the new concepts you mention – do tell!