Managing Credit Models in an Online Marketplace

Panel entitled, "Managing Credit Models in an Online Marketplace." Panelists include: Sid Jajodia, Lending Club; David Snitkof, Orchard; Moderator: Jose Penabad, HCG Fund Management LP. Recoded at LendIt USA 2017.

Understanding the credit models of lenders is a key determination for investors who are looking to allocate capital; at LendIt USA 2017 we hosted a fireside chat moderated by HCG Funds featuring Lending Club and Orchard; the discussion led off with panelists explaining the difference between perception and reality when it comes to online lending; most lenders use a lot of the same credit models as banks when determining borrower risk; the big difference for online originators is that they are able to be more nimble in changing their models and they can incorporate alternative data quickly; banks have to go through lengthy processes and update dated technology for new data sources; an important aspect of the conversation centered around adjustment of risk in different environments, this is something investors want to see in a lender and it shows they are willing to react to the market; panelists also touched on the troubles of 2016 and key lessons learned about modeling.