FinTech Watchlist Company Profile—SoFi

Peer-to-Peer Lenders are Redefining the Student and Personal Loan Market and Challenging the Century Old Established Banks
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Published: 29 Dec 2017

The study covers one of the leading online lenders in the United States. SoFi that started offering student loan refinancing has moved much beyond and rolled out a series of products to cater to the full stack of the market. In the study, Frost & Sullivan has presented the evolution of SoFi tracking back to May 2012, when it launched is the first product. We have also looked at the explosive growth attained by the company and explored key strategies adopted by the SoFi to attain the growth. As with most FinTechs, technology is at the heart of SoFi’s offering using machine learning to assess eligibility of the prospects for student and personal loans with minimum or no human interference. While this is the main foundation of its offering, it has gone to differentiate itself by organising various events and running initiative such as temporarily stopping the loan payment instalments with effecting their scoring so they can chase their dream of becoming an enterprise or helping them with career counselling workshop to get a new job in the event losing their existing job. SoFi not only competes with various other peer-to-peer lending companies such as Lending Club, Lenda, Sindeo, but also established banks such as J.P Morgan Chase. We have further investigated the business model of the company and represented it in the most simple possible way. The study also covers key technologies used to automate the processes to not only run them more efficiently, but also reduce the cost of executing the process. Its innovative features have also equipped clients to get loans as per their convenience. We have put our analysis to deep dive into the potential chance of SoFi impacting the existing business and placed qualitative assessment on which market segment and how much can the company impact. Finally, we have handpicked key points that legacy banks and other lending institutes can learn from SoFi. These recommendations are pinpointed and will get leading market participants to start thinking about automating their processes and help them defend their market from disruption. We have added executive summary that brings all of this together in a crisp form, to help busy executive get the gist of the study and then read sections in detail that matter to them.

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