Fintech partnerships with traditional banks are exploding. That hasn’t been lost on OnDeck, the online small business lender that recently launched a new company aimed at helping banks digitize lending. Its first customer: PNC Bank.
Called ODX, it will be a stand-alone business that will help banks offer small business lending online. With demand surging, banks have been looking for software as a service that can enable them to go digital and OnDeck wants to be the provider they turn to. While the big banks have been better able to afford the technology to digitize online lending, smaller, regional ones have been struggling with the costs associated with digital lending. OnDeck already provides online lending software to JPMorgan and other banks.
Small Business Loans Still An Arduous Process
For small business owners getting a loan from a bank still requires a lot of effort in which reams of paper-based documents are commonplace as are waiting times that can be weeks in length. That is also true at the big banks that have the war chests to build out the technology to speed up the process. Digital lenders have turned the industry on its head, embracing technology and out of the box underwriting to get loans to small businesses quicker. As it stands, with OnDeck small business owners can apply for a loan online and get a decision within minutes. Funding can come as in little as 24 hours in some cases.
ODX will offer banks software, analytics and services to help them overhaul their small business lending platform. The core of the offering is a SaaS platform that lets the banks create a digital lending service that is branded by them. In announcing the new business unit Noah Breslow, chairman, and chief executive of OnDeck described ODX as a next-generation service provider for digital lending that will deliver a bank ready platform to help banks meet the evolving needs of its clients. PNC Bank plans to offer business lines of credit of up to $100,000 via ODX’s SaaS platform to existing and potential customers in the U.S. It tapped ODX to simplify and accelerate the entire process for small and mediums sized business customers.
ODX Already Has Bank Customers In The Pipeline
Heading up this initiative is Brian Geary, previously vice president of bank partnerships at OnDeck. He becomes president while Raj Kolluri, vice president of products and engineering at SS&C Primatics will join the new SaaS company as head of product and technology for ODX. "Digital channels are creating new ways for customers to discover, evaluate, and purchase products from banks," said Geary when the business was announced. "ODX is committed to helping banks accelerate delivery of the digital experience that customers want while enabling strong loyalty and ultimately, long-term profitable growth." ODX plans to announce partnerships with additional banks shortly and reportedly has a pipeline of potential bank partners around the globe. In an interview with Reuters Breslow said OnDeck decided to launch ODX now because of the demand it is seeing from the largest banks in the country. “We thought that by creating ODX, we would set ourselves to take advantage of that opportunity,” he said.