Special Presentation: Frank Rotman
Special Presentation on Lessons from the Installment Loan Business by Frank Rotman, Partner of QED Investors, at LendIt USA 2015.
View and download the slides here.
Lendit's Peter Renton is a firm fan of Frank Rotman's white paper on the state of the marketplace.
Rotman canvassed the LendIt audience to see who had direct experience of the banking sector, where he had worked for more than a decade, as he introduced the findings of his 'Hourglass Effect'.
He vividly depicted the changing landscape of lending via the mortgage market, describing homes as “atms”, releasing $60 billion in home equity before the 2007 crash, when they became more like “balls and chains”.
With loss projections for lenders of up to $300 million a year, banks simply began to close down personal loan options, generating “debt extinction” and triggering a $200 billion re-pricing of the market, opening access to the current wave of lenders.
Since the recovery began in 2011, Rotman sketched out the next era, anticipating 5 possible scenarios: that many banks will re-enter the SME arena; a bank might buy an existing online provider; the status quo might prevail, where banks would continue to ignore the new generation of platforms; there will be a “knife fight” between new and old, where channel partners will win; or ‘Lending-as-a-service’ will become the norm.