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  • Frank Tian

🙅‍♂️ Loan Application Not Available

A newly launched loan product between a bank and its non-bank partner has suspended applications for days.


According to unnamed sources, the program quickly runs into a fraud problem.


A few thoughts - not only based on this particular case.


📌 It is best to embed the lending product within the partner’s existing process vs. a simple distribution channel. If the fund goes to the consumer directly instead of going to the partner, naturally it leads to adverse selection (fraud).


📌 Engage risk and fraud teams early on. This sounds obvious - but the conversation could be lost in a large bank with centralized service centers vs. multiple product owners.


📌 Go slow and steady, especially with a new business model. Burning the budget/building the volume up before fiscal year-end is not a good reason to go full speed ahead. A baby never hits the ground running.


🟦 A BaaS Playbook




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