Modular integration

The first step in long-term expansion

for lending platforms
Modular integration: the first step in long-term expansion

It’s time to step into a new lending landscape

Historically, business expansion has required vast resources, and large banks have held the key.

But today, the door is wide open, with a host of opportunities for lending platforms.

The use of modular integration, for example, enables alternative lenders of any size to embed the functionality of
third-party fintechs within their platforms in order to serve a particular need, or fill a gap in product-market fit in
a way that just wasn’t possible in the past.

This can unlock a wide range of benefits for lending platforms that want to improve or expand on their offerings.

As the lending space continues to evolve, it is increasingly important to keep up with customer expectations and
demand. Fortunately, the advent of Application Programming Interfaces (APIs) has empowered alternative lenders
to innovate and achieve rapid growth by partnering with next-gen fintech platforms.

In doing so, lending platforms can take the next step towards their long-term goals – whether that means expansion
into global markets, or providing a more holistic banking experience.

Chris D’Antuono,
Director of Business Development,
Currencycloud

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Modular integration: the first step in long-term expansion

Competition is growing in the digital

lending space
In recent years, digital lending platforms have emerged as a primary source of funding for SMEs and individuals.

This has been largely fueled by their ability to develop advanced risk assessment models, democratizing lending
for clients that would otherwise have difficulty finding funding.

Now, many of these lending platforms are expanding on their offerings, with complementary products
that enable them to provide a more holistic banking solution and, ultimately, a better user experience. “My own startup initially just offered
invoice financing services. But the days of
Don’t get left behind
Fintechs universally are spotting the potential of this type of expansion – with 65% saying that introducing one-trick ponies in fintech are numbered.
new services is their main commitment.
More companies will see the need to
Consequently, companies such as Stripe and Square are beginning to expand their services to include lending
products. These are strong, multi-faceted platforms with extremely competitive offerings that fintechs cannot
offer multiple solutions and services.
afford to ignore. My own company has expanded to offer
Because of this, lenders with single-use products are under pressure to keep pace with customer expectations.
The ones that maintain market leadership will be those who keep innovating and adding value for their
a business line of credit and we continue
customers. to explore other products.” (2)

65%
say introducing new services Eyal Lifshitz, CEO and founder,
is their main commitment (1)

Source: (1) Cloud Elements Sate of Open Banking Report, 2019 (2) Tearsheet, 2018
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Modular integration: the first step in long-term expansion

How a modular design can boost the value

of your lending platform
Through integration with APIs, alternative lenders can expand their product line quickly and easily, without a
lengthy and costly in-house build process.

Additionally, modular integration can lead to other positive outcomes:

Driving customer acquisition and product adoption

As your platform expands, becoming a solution for more than one need, you will attract attention from those
needing to use it on a regular basis, giving you a chance to increase your wallet-share as well as your total
addressable market.

Affirm is a market-leading alternative lender that offers installment loans to consumers at the point of sale.

Marqeta helped Affirm to add highly refined payment control features to its platform. Affirm can now
issue cards that restrict funds by merchant, dollar amount, and time; virtual cards to automate merchant
payments; and a virtual card that consumers can use at any merchant.

With this partnership, Affirm drove customer acquisition and product adoption, improving user experience
along the way. (3)

Source: (3) Marqeta, 2019

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Modular integration: the first step in long-term expansion

Increasing market share

Customers value the simplicity of fintech applications, for example having one app that manages various
needs but only requires one login.

If your platform can offer this, it becomes ‘stickier’ for customers, i.e. harder to let go of because it is a
well-used part of their business lives.

With a three-way partnership, LendingClub members can take advantage of additional services on the
platform, such as applying for small business loans from Opportunity Fund or Funding Circle. Opportunity
Fund, in turn, is taking a crucial step in plans to grow its lending offering, while Funding Circle can solidify its
strategy to grow its presence in the United States. (4)

Source: (4) Pr Newswire, 2019

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Modular integration: the first step in long-term expansion

Access to customer data

For next-generation, alternative lending platforms, data is at the heart of their entire business. Additional data
helps them make better decisions that drive long-term expansion.

For example:

•• W
 ith payment data, a lender can better understand how lendees are spending funds, helping them make
decisions, such as who to lend to

•• W
 ith receivables data, they could have a better understanding of the pace at which customers could
expect to be reimbursed

Lendio, America’s largest small business loan marketplace, integrated with Ocrolus, the emerging leader in
bank statement review automation, to improve their bank statement analysis capabilities. This also helped
them to gain access to better data.

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Modular integration: the first step in long-term expansion

Enabling expansion into new markets

Reaching a new market can feel impractical or years away, but in reality it could be possible with just one
integration. It’s a potential game changer for ambitious lenders, and eight out of 10 financial services
companies say API integration is crucial to their open banking strategy.

Seedrs is an equity crowdfunding platform for investing in startups.

By integrating with Currencycloud, Seedrs aims to expand beyond the UK and into Europe, offering
immediate pan-European investing through its platform. Investors enjoy a streamlined experience, without
needing to leave the Seedrs platform to exchange money. (5)

8/10
financial services companies says
API integration is critical to their
open banking strategy (6)

Source: (5) Currencycloud, 2015 (6) Cloud Elements State of Open Banking Report, 2019
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Modular integration: the first step in long-term expansion

Modular integration can solve today’s issues

and tomorrow’s aims
Integration offers a simple way to solve existing challenges, while improving your platform’s user offering.

A strategic approach to integration can set the tone for achieving future goals. This includes helping your platform
progress towards becoming a more holistic banking product, as well as creating opportunities to expand into new
markets. It’s something we at Currencycloud have embraced when working with alternative lenders.

By using our Global Collections product, Currencycloud can help your customers to expand into new regions,
such as Europe and Canada, by giving them access to Virtual Account Numbers (VANs) to collect payments
internationally. Through additional integration with Currencycloud, customers can pay back loans from
individual accounts, as well as provide international payments – adding more value.

Additionally, we have helped numerous alternative lenders build branded payments platforms integrated
with our network, which their SME customers could use to pay their suppliers. This can strengthen their
proposition and increase the stickiness of their products.

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Modular integration: the first step in long-term expansion

Carving your space in the market in 4 steps

Try these four simple steps to implement an integration strategy for your platform.

1. Keep customers at 2. Competitive 3. Determine 4. Select the

the forefront of your
strategy
Your customers are central to your goals,
in the short- and long-term. How will
a change in your service affect them?
Any partner you integrate with should
fully understand your business and your
customers’. Integration is also a great way
to build ancillary financial products that
your customers truly need.
analysis
How do your competitors’ offerings
compare to yours? If you’re integrating
to break into a new market, think about
who becomes a competitor as a result.
How does your offering compare to those
companies, and are there any gaps in your
service that integration could fill?
profitability
and budget
It’s important to consider this in a long-
and short-term context. If integration
is to solve a pressing internal issue,
how much can you afford to budget?
Meanwhile, think about your ROI goals,
and how likely it is that integration will
help you meet them. Also, will it fuel
additional growth?
right partner
Ideally, you and your partner should
have goals that complement each other,
alongside your products. The partnership
could last many years, so you want to
make sure that whoever you partner
with is going to be there to support you.

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Modular integration: the first step in long-term expansion

Proud to support alternative lenders

With our simple, streamlined and efficient payments processes, Lendtechs can take
the idea of cross-border expansion more seriously.
•• Cross-border loan delivery coupled with automatic reconciliation for loan repayments

•• Save time and money with automated payables and receivables

•• International Bank Account Numbers (IBANs) and Virtual Account Numbers (VANs), can increase
trust with customers by collecting payments abroad in the local currency, like a local business would

Use Currencycloud to build a competitive, white-labelled payments portal for

supply chain payments and receivables.
•• Expand your product offering and increase total addressable market, adding value for clients

•• Avoid the lengthy, expensive process of becoming internationally regulated

•• Focus more on customers by outsourcing onboarding and KYC processes to Currencycloud

•• Collect additional revenue with mark-ups on FX transactions

•• Access to payments data with our analytics products, Currencycloud Insights

GET STARTED

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