Elena Ionenko Interview for Pymnts: Banks Brace For New Competitive Forces In Commercial Lending
Though traditional financial institutions have faced a surge in market pressure to digitize as new FinTech competitors emerge, there are still plenty of areas in which banks hold the upper hand, commercial lending included. Beyond the fact that many institutions are decades — or even centuries — old, with long-lasting customer relationships and brand awareness, traditional financial institutions also hold key data on their business customers that is vital to their underwriting and decision making. According to Elena Ionenko, co-founder and chief operating officer of loan Software-as-a-Service provider TurnKey Lender, this is one area in which banks have a leg up on their FinTech rivals. “Even today, FinTechs and non-bank lenders who offer different business loans online, in many cases, still process applications and make decisions manually,” she told PYMNTS in a recent interview. “In order to digitize the loan origination process for commercial lending, you need to build specific credit scoring models, which can only be built if you have data.” With corporate customers large and small now demanding speed and efficiency throughout the loan lifecycle — from online application, to decisioning, through to actually receiving funds and repaying the loan — the opportunities that traditional financial institutions (FIs) have to automate and accelerate digital commercial lending workflows is vast thanks to that valuable data. However, as Ionenko explained, recent evolutions in the business lending landscape have once again introduced pressure on banks to up their game. A PPP Catastrophe Last year’s Paycheck Protection Program (PPP) initiative offered small and medium-sized businesses (SMBs) a desperately-needed financial lifeline. But an overwhelming surge in demand painfully exposed traditional banks’ biggest shortcomings in business lending. Confusion around which forms were required for banks to receive an application, processing hiccups, misinformation and allegations that financial institutions favored existing customers over new SMB applicants all raised doubts over traditional FIs’ ability to operate as agile, digital-first lenders in today’s economy. FinTechs, on the other hand, built on a digital-first foundation, found their footing amid the PPP deluge. “In many cases, this program was very efficiently handled by FinTechs and online lenders who already had everything in place to analyze the application forms and make decisions much quicker than banks,” said Ionenko. Due to the framework of the PPP initiative, there were relatively loose requirements that small businesses had to meet in order to qualify for funding, meaning FinTechs that lacked troves of data on business customers could still easily underwrite and process PPP loans. Amid another round of government aid for small businesses, however, traditional financial institutions are better positioned to address demand. Lenders may not be expecting the kind of dramatic race for financing that the market saw in 2020, while legacy banks have also had the opportunity to upgrade back-office infrastructure and address the pain points exposed as a result of mishaps in the first round of PPP funding. The environment created an even greater opportunity for banks to drive value by turning to third-party technology and Software-as-a-Service vendors, which, as Ionenko explained, can help FIs digitize and automate without forcing them to sacrifice control over risk exposure and credit policies. Embedded Finance Shifts The Competition Traditional financial institutions continue to take a page out of FinTechs’ book to prioritize automation and digitization in their lending operations, but the PPP initiative proved that banks still have a long way to go. Increasingly, FIs are embracing FinTech partnerships, integrations and acquisitions to fast-track their loan modernization efforts. As that push intensifies, there are other emerging shifts in the commercial lending space that could further challenge banks’ competitive position. One of the most prominent, said Ionenko, is the rise of embedded finance, particularly in the B2B economy, in which manufacturers are integrating their own financing services to their business customers in order to offer an end-to-end, holistic experience for the buyer. “They bring this technology in-house to offer better financing terms to their customers, to make payment collection easier, and to just built a better relationship with customers,” she said. “They don’t want to send customers somewhere else for financing.” As this market trend percolates, banks will continue to explore opportunities to develop more attractive commercial lending experiences. The landscape is vast, and as financial institutions implement the lessons learned from PPP financing missteps, they will be in a favorable position to broaden their digitization efforts into other areas of commercial finance as demand creeps up. From trade finance, to invoice financing, to working capital loans, many businesses will be searching for supplemental funding when government aid isn’t enough, noted Ionenko. These are prime areas in which banks can dig deeper into digitization once they’ve mastered PPP automation. “With this first step, they’ll gain confidence and understand how the technology works,” she said. “They’ll see how it can be built into their existing infrastructure. It’s a good first step toward broader digitization of their commercial lending operations.” Read the full interview on Pymnts.
Elena Ionenko’s Interview on the Evolving State of Lending in the Era of AI
Elena Ionenko, the co-founder and head of business development at TurnKey Lender gave an interview to the Fintecbuzz. She shared her insight on the state of digital lending, the ways in which artificial intelligence assists its development, and TurnKey Lender’s products that pioneer the race digitalization of banking and lending. 1. Tell us about your role at Turnkey Lender? I am the Co-Founder of TurnKey Lender which we launched in 2015 to make e-lending as easy or easier than e-commerce. At this point in time, I am also responsible for the responsibilities as Head of Business Development for the company. This includes everything to drive the company forward and cooperating with all departments to ensure we deliver the highest quality products possible to our clients in every corner of the world. 2. Can you tell us about your journey into this market? In the early days of FinTech, I saw that this industry was going to be one of the most powerful parts of the digital economy of the future. That’s why I’ve been working with FinTech products for most of my career. Additionally, I have over twenty years of business development, sales, and management experience behind my back. After receiving my MBA, I worked on several successful products in Silicon Valley and founded two companies where, at different times, I headed up finance, sales, and marketing teams. I am an active member of the global FinTech community, speaking at events, sharing insights, and recently becoming a member of the esteemed Forbes Technology Council. 3. How do you think technology is upgrading the financial sector? Transparency, affordability, accessibility, inclusion, and fairness — that’s what FinTech brings to the table. The financial sector is all about innovative technology and digital transformation. At TurnKey Lender, R&D is one of the areas we invest the most in. Because as soon as a FinTech company stops innovating, it gets outperformed. 4. How has the integration of AI enhanced lending solutions? Since the very beginning my co-founder Dmitry Voronenko and I understood that the only way to transform lending from the rigid, slow, and error-ridden process that it used to be, was to apply artificial intelligence and big data in a meaningful way. We have a very strong team of engineers and a dedicated risk department who analyze enormous amounts of data to create intelligent self-learning algorithms, scoring models, and decision rules powered by deep neural networks and machine learning. AI plays a cornerstone role in making our solutions successful. We’re proud to say that our software isn’t just the most usable, flexible, and scalable on the market, but also the most intelligent. 5. How do you define your Auto Financing Solution? TurnKey Lender offers intelligent software that automates every step of the auto financing process for dealerships. The System covers different credit product types like leasing or rental out-of-the-box and provides a flexible credit product builder for fully custom product creation without any involvement from our team. The solution presents a single source of truth and a unified system that includes all the functionality one needs for running an efficient and profitable auto financing operation that doesn’t need any third-party involvement from a bank or other financial institutions. 6. Can you explain, how does your Unified Lending Management Software empower businesses? Traditional lenders like banks or credit unions, alternative lenders, can offer fully digital, streamlined, personalized, and secure credit products on their terms, without any involvement from the middlemen or the need to use separate incompatible solutions.  Moreover, with our user-friendly AI-powered and fully automated technology even businesses who know nothing about lending and credit risk can safely offer convenient buy now – pay later and other financing options to their customers, selling more of their goods and services. We believe that embedded lending will be soon part of any customer relationship. 7. What features of your risk management solution differentiates it in the market? Some of the features that make us stand out include but aren’t limited to: Unmatched configurability and intelligence of the AI-driven Decision Engine. End-to-end lending processes automation thanks to a flexible modular architecture. The system processes 460+ loan applications a second without losses in quality. Preconfigured integrations with 75 relevant technology providers. Machine learning and deep neural networks are applied to achieve industry-leading quality and accuracy of scoring models. 8. What advice would you like to give to the technology Startups? When you see a market opportunity, go ahead and try to launch a stable and secure MVP. Start selling it as soon as possible. After that, your clients have to become your key focus – listen to their pains, analyze their user journeys, improve your solution, and then scale the success Twitter 9. What is the Digital innovation in financial technology according to you that will mark 2020? At TurnKey Lender we see a distinct trend towards digitalization of lending and implementation of embedded financing. The same way that the 2008 crisis provided the start for the all-consuming e-commerce revolution, we believe that 2020 will force businesses to embrace digital lending technology. 10. How do you prepare for an AI-Centric world? Since its founding day, TurnKey Lender technology has focused on AI and big data. This was the only way to automate the crediting process to the extent that we do and with the user-friendliness that we offer. 11. What are the major developments you are planning, in recent time? We were preparing for the upcoming economic crisis for a long time and in retrospect, we were ready when it happened. TurnKey Lender has rolled out major releases of our key products to address the changes and challenges of a post-Covid-19 economy.  In the upcoming months, we also have numerous new releases that will continue to move the lending industry forward. 12. Can you tell us about your team and how it supports you? A leader is nothing without the right people to lead. Thanks to our satellite offices in the US, Singapore, Ukraine, Belgium, Cambodia, and Malaysia, we are able to choose the
TurnKey Lender’s Elena Ionenko on the 938now Radio Station Morning Show (audio)
From pet leasing to KYC compliance scoring: Elena Ionenko and the host of Your Morning Fix Show on 938now Radio Station (Singapore), Keith De Souza, discuss it all