| NEW YORK
NEW YORK Feb 13 The American Bankers
Association, a trade group for U.S. banks, has endorsed
Chicago-based startup Akouba as a technology provider to enable
its members offer small business lending online.
Reuters had reported in January that the ABA was running a
formal bidding process to secure an online lending partner, as a
growing number of banks launch digital lending services or
partner with startups in the sector.
Akouba, which provides a loan origination and underwriting
platform that integrates with a bank's own credit policies, was
chosen because of a number of factors, including its ability to
assess and manage risk, the ABA said on Monday.
It is part of a growing cohort of young tech-savvy companies
that automate much of the lending process, making it faster and
cheaper than traditional brick-and-mortar operations.
While the online lending sector was initially largely left
to the new entrants, such LendingClub Corp, Prosper
Marketplace and On Deck Capital, big banks have started
For instance, Banco Santander partnered with
Kabbage last year to offer small business loans, while JPMorgan
Chase & Co sealed a partnership with marketplace lender
On Deck Capital Inc in 2015. Goldman Sachs Group Inc
launched its own online consumer lending service this
Smaller banks have instead relied on ABA, which represents
institutions with less than $250 million, to source vendors for
technology and other services. Member banks typically receive
discounted pricing from partner vendors.
"The small business loan application process is very
time-sensitive and costly for banks, and there is a need to
simplify and accelerate the process," Bryan Luke, chairman of
ABA's Endorsed Solutions Banker Advisory Council, said in a
Partnerships allow fintech startups to tap into a larger
network of customers, while allowing banks to improve digital
offerings quickly without having to bear costs of developing new
(Reporting by Anna Irrera; Editing by Sandra Maler)