By Tina Giorgio
In July 2018, the Boston Consulting Group released a report concluding digital lending would become a $1 trillion opportunity within five years. This same analysis prognosticated that “… the organizational culture required to breed digital lending is very different than the legacy culture prevailing at traditional lenders. Therefore, lenders will fund/spawn new digital lenders.”
Just six months later, we’re seeing this prediction play out. Instead of conceiving competitors, this market shift has created collaborators. Today’s fintech companies are looking for opportunities to partner with community banks, and community banks are looking to partner with them. It’s all about creating the high-tech, high-touch experience that community bank customers will enjoy in the years ahead.
And as ICBA Services Network Chief Operating Officer Kevin Tweddle recently said, “We’re thrilled to be working with MK Decision and to have the opportunity to introduce it to the nation’s community banks. This game-changing digital lending platform is a high-tech underwriting solution that leaves more room for high-touch community bank-customer relationships. By reducing the decision-making process down to seconds, community banks and their customers save valuable time without sacrificing the community bank quality service that they know and value.”
When we specifically look at digital lending, ICBA ThinkTECH Accelerator finalist MK Decision hits it head on. The company’s online loan origination system provides a path for community banks to offer a more seamless user experience. By leveraging an application programming interface (API), MK Decision’s technology integrates with a bank’s core; an API also enables it to tap into credit bureaus to get information on a loan applicant within seconds. This helps speed up the loan decisioning process, while providing an improved digital lending environment for an enhanced customer experience.
In explaining the company’s value proposition, co-founder and CEO Har Rai Khalsa says MK Decision’s offering:
- Creates simple, borrowing experiences that are mobile-optimized, ADA-compliant, paperless, and designed to satisfy customers’ digital expectations;
- Curates marketing webpages that can be easily integrated into banks’ websites to help educate and inform borrowers;
- Offers an automated decisioning engine that takes community banks’ existing risk scoring models and digitizes them to systematize underwriting; and
- Provides a database of known fraudsters, enabling banks to identify these individuals through scans for aliases, IP addresses, mailing addresses, and more.
These proprietary features differentiate MK Decision from its competitors and make it an attractive offering for community banks.
“Every single one of the Accelerator fintechs clearly demonstrates value-add and addresses important questions,” says Stephen Wooters, executive vice president, marketing, digital banking and payments at $1.5 billion-asset Fairfield County Bank in Ridgefield, Conn. “How do we streamline processes? How do we enable documents to move more efficiently? How do we ensure that customers don’t have to jump over a bunch of hurdles? It’s important for us that we’re building financial technologies that are solving real needs.”
Case in point: MK Decision’s product development process. Through its pilot program with $650 million-asset Axiom Bank of Maitland, Fla., the fintech was able to test real-world experiences, allowing the developer to dig into its offering—from technology tweaks to compliance reviews by regulators.
“When we went live with Axiom Bank in 2018, about 30 days after we launched, we did go through an audit from a federal regulator, and we passed with no issues,” indicates Khalsa. “The key for us is we have a compliance team on staff, and we put a lot of effort into really vetting our solutions before we take them to market.”
This process has paid off. The company continues to expand, and it expects to make some key partnership announcements in the coming weeks, in support of its community-centric vision.
“Ultimately, MK’s mission is to stimulate local borrowing and local lending,” Khalsa sums up. “We truly believe that we can help local economies, and community banks are a key part of that. We see community banks as the backbone of our nation.”
Tina Giorgio is President and CEO of ICBA Bancard.