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
"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."
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The abrupt resignation of the firm's founder and CEO, under a cloud, seems likely to fan investors' growing fears about the marketplace lending sector. It could also hasten regulatory scrutiny.
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Prosper Marketplace's decision to eliminate 22% of its workforce is more evidence that the bloom is off the rose for a sector that had been enjoying astronomical growth.
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The bank says the partnership will improve the online experience for borrowers. It is just the latest example of banks and online lenders teaming up to speed up decision-making and win over new customers.
April 7
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
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.
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"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."
