BB&T said it's hesitant to build or partner with a large-scale online lending platform as other big banks have, leery of what would happen if it changed longstanding credit approval processes.
The $212 billion-asset company takes applications online for products such as mortgages, credit cards and home equity lines, and it has a customizable online banking portal. But "it's not the type of online lending … that is kind of all done through expert systems that's out with an answer in a few seconds," said Christopher Henson, BB&T's chief operating officer.
"Frankly, we have reviewed those processes, and still have them under review, but we have not been able to get comfortable from a credit perspective," Henson said during a presentation at a conference hosted by Deutsche Bank. "We struggle with it fitting our risk appetite."
BB&T is airing misgivings about online lending at a time when other banks are embracing this area of fintech. Wells Fargo in announced last month that it would introduce an internally built direct business lending platform. Regions Financial, JPMorgan Chase and Citigroup have announced partnerships with alternative lenders.
Executives at the Winston-Salem, N.C., lender, including Henson, have spent considerable time researching digital banking and related infrastructure, including online lending, meeting with bankers in Australia, Canada and the U.K. in the last year.
"We're a company that tends to do most of our credit business in-house," Henson said, explaining BB&T's reluctance to seek out a partnership. "We just want to be surefooted with respect to credit. You can take risk in other places. Credit is not the ideal place to take risk you don't understand."
Henson also referred to recent negative headlines for alternative lenders.
"Being able to be sure that the model actually delivers long-term the result that you anticipate, that's the part that we probably struggle with just a bit," Henson said. "Maybe the part that's gotten a little bit more airtime in the news as of late … not quite getting the result that maybe you thought you had on the front end."