NEW YORK (Reuters) - OnDeck Capital Inc (ONDK.N) has set up a subsidiary that will provide technology and other services to banks looking to lend to small businesses online, it said on Tuesday.
Called ODX, the new company will expand OnDeck’s existing business of providing online lending software to banks, such as JPMorgan Chase & Co (JPM.N), the company said.
ODX plans to announce a new bank partnership imminently and has a pipeline of other potential bank partners across the world, the company said.
It believes ODX will make it faster and easier for banks to digitize their lending to small businesses.
“We felt that given the robust demand we are seeing by the largest banks, it is not a question of if they are moving into online lending, but of when,” Noah Breslow, chief executive of OnDeck, said in an interview. “We thought that by creating ODX, we would set ourselves to take advantage of that opportunity.”
New York-based OnDeck is one of the most established companies that extends credit to small businesses through its website and then sells loans to financial institutions such as banks.
It announced a partnership with JPMorgan Chase in late 2015, through which the bank uses OnDeck’s technology to lend to small businesses.
Brian Geary, who served as vice president of OnDeck’s partnership unit, has been appointed president of ODX.
The company also hired financial technology executive Raj Kolluri to serve as ODX’s head of product and technology.
Kolluri joins ODX from financial services software provider SS&C Primatics, where he served as vice president of product and engineering.
Reporting by Anna Irrera; Editing by Peter Cooney