Fintechs move to provide an alternative to banks

Last week I jointly released, with Fintech Australia and theBankDoctor.org, a research report that outlines the steps to be taken by fintech lenders to increase transparency and disclosure.

The report, Fintech lending to small and medium sized (SME) enterprises: Improving transparency and disclosure, analyses the different approaches to disclosure across the fintech industry, and makes recommendations on best practice and identifies commitments to action.

SME lending presents a huge opportunity for the fintech industry, so I commend the sector for its leadership in the financial services industry in addressing the needs of small business borrowers.

It presents a genuine alternative finance solution for small businesses where traditional banks are limited in their capacity to provide loans that are not secured to property.

Our particular focus in developing this report is improved transparency and disclosure. It is accepted the borrowing costs of fintechs will often be higher than banks, as loans are secured against business activities and not ‘‘bricks and mortar’’, but the total loan costs – the effective interest rate – is not always clear. Read more