A potential class action case argues against a "rent-a-bank" scheme for high APR loans, highlighting the importance of understanding financial regulations and usury laws in the lending industry.
The case brings attention to the evolving landscape between fintech companies and traditional banks, showing the complexities and discussions around defining the true lender in partnerships.
The case also underscores the need for transparency and clarity in financial partnerships, as demonstrated by the alleged lack of distinction between a fintech entity and bank in customer-facing materials.
Apple has launched a Savings account with a 4.15% yield through Goldman Sachs, creating a disruptive financial product.
Goldman Sachs plays a significant role in the product's distribution, benefiting from Apple's massive consumer base.
Other big tech companies like Google, PayPal, and Ant Financial have also made inroads into financial services, showcasing a trend towards tech-powered banking.
Building financial products like credit cards or loans requires careful consideration of compliance regulations, risk models, operations, and funding models.
Fintech infrastructure products can assist in building credit products, but integration can be complex due to a lack of standard setup.
To effectively build a lending product, break it down into steps like acquisition, underwriting, origination, funding, and servicing.
OCEN is a new credit infrastructure that could revolutionize lending in a way similar to how UPI transformed payments.
It is a protocol, not a switch, and its potential lies in the consumer products that can be built on top of it.
OCEN aims to address India's credit distribution problems by making access to credit easier for the Next Billion Users and SMEs, potentially reducing the concentration of capital.