In a series of interviews with Smarter Loans, Greenbox Capital CEO Jordan Fein discusses all things alternative lending and FinTech. In this short clip, Jordan shares his thoughts on how transparency and regulation can help protect borrowers and improve the borrowing experience.
Watch the video, or keep reading below for a full transcript.
SL: Innovation is happening on a daily, weekly, monthly basis, oftentimes at warp speed. In terms of how much room there is left to really enhance and improve the borrowing experience, what can you say about that?
SL: Innovation is happening on a daily, weekly, monthly basis, oftentimes at warp speed. In terms of how much room there is left to really enhance and improve the borrowing experience, what can you say about that?
JORDAN: There’s a lot that can be done. I think that there’s still a long way to go to improve the borrower experience. Their data and protecting their data is, to me, one of the most important things that should be done, will be done, and can be done to be able to improve the experience.
The way the process works right now is…borrowers are being called by brokers all day long, or they go on a website, they fill out a form, and they get a million phone
“Their data and protecting their data is, to me, one of the most important things that should be done, will be done, and can be done to be able to improve the experience.”
calls, and that is daunting. I feel bad for them. They go out and fill out a form and their phone is ringing off the hook. And I don’t think if they knew that they would have signed up for that.
But essentially, they have to go fill out an application, right. A credit application, and they go get their bank statements, and they have to submit it. And the thing is that the brokers are generally unlicensed. It’s just unregulated. And what usually happens—not always, but often—brokers are submitting to brokers who are submitting to brokers, and you never know how many brokers it takes to get to a funder. Sometimes it’s direct. A lot of times it’s direct, actually. But their data is being passed through email in an unsecured fashion and their information is all over. It’s not tracked. It’s inefficient, it’s unsafe, and it’s how fraud happens. So I think that the industry could really grow up in that area.
I also think that the industry should just be more digitized. I think that would be something that could really help. And that’s kind of what I was talking about with the banks and APIs, things like that. I think it will happen. I think it’s going to come, and it’s going to help the borrower make more sense of what’s going on. They don’t know! They come to the transaction and they just don’t know. And I think that it would be nice to give them that transparency. Funders do, right. They do. A lot of times they’re explaining, “we do that”. We explain everything that’s happening, but I’m talking about the beginning of the process, understanding what’s actually happening with their data and what’s going on. I think that’d be really nice.
The other part is…there’s a lot of good brokers, and there’s also a lot of not so good brokers. And the reason why I say that is because it’s mostly unregulated, and they say things that you have to sometimes clean up, and you have to make sure that the borrower understands what’s going on. I would love to solve for that problem. I would love to have some type of standard or requirement that brokers have to abide by, or they get blackballed from the industry. Some kind of licensing for brokers. I would love that. Nothing would make me happier.
“I would love to have some type of standard or requirement that brokers have to abide by.”
Oh, actually, there’s a few things that make me equally as happy, but I think that, again, with the borrower, it’s not fair. It paints a bad picture on our industry. I would love to clean that up. Where it’s an even playing field, so brokers have to have either great relationships, a good process, or build a good rapport, as opposed to saying things that maybe bend the truth, break the truth, whatever.
It does exist. That’s just what it is. It does exist. And I think my best recommendation to any borrower tuning in would be to Google and check reviews of the funding company and the brokerage, both of them, and really, really check them. And when you get an offer, check to see if it’s from that brokerage or a funder, and then check the funding company’s reviews as well, because they’re often different. And then reconfirm what you were told with the funder. That is a great way to make sure that you’re protecting yourself.
If you apply and it’s so-and-so brokerage and they say they’re a direct funder, which they all do, and they give you
“My best recommendation to any borrower tuning in would be to Google and check reviews of the funding company and the brokerage, and really, really check them.”
an offer, and you review them and are like, “okay, the reviews are good, I’ll go through with that”. And then you get a contract and the contract says Greenbox Capital, for example. Google Greenbox Capital reviews. See what they’re saying. And then talk to them and ask them questions, saying, “here’s what my broker told me. Here’s what’s going on. Is this what’s happening? Is this what’s happening?”. Be in communication. That sets you up for success.
We’re also doing our part too, to make sure that we say, “here are the terms and conditions. You agree to this? You agree to this? You agree to this?”, because we want to make sure that it’s done in fair dealings. That would be with some of the best advice that I can give to give transparency right now in the industry with how it exists.
About Smarter Loans
Smarter Loans’ mission is to help Canadians make smarter financial decisions through educational resources about Canada’s most innovative financial products and connecting Canadian consumers and businesses with top financial companies in a fast, safe, and convenient way. With a focus on both personal and small business lending, Smarter Loans compiles company profiles for top financial companies in Canada, offers loan finder tools to make it easy to find the right loan, and shares educational content that promotes responsible lending in Canada. Visit Smarter Loans to learn more.
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