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Compared to the theft of a bank, obtaining a loan is relatively easy.
Bank robbing is dangerous and it is very likely that you will be discovered. While getting a loan involves paperwork, and if you have the right financial profile, it is likely that you will be approved. Lenders like to lend, sometimes so much that they will actually get out of business to do it.
There's a middle ground in which the loan and theft meet, which can involve things like bankers preparing forged documents or people pretending to be someone else, getting a loan, and as soon as the money arrives, he is no longer the person who owes the money.
To combat this latest type of fraud, a group of 16 fintech companies – including SoFi platform lenders,
On the bridge
and Funding Circle – announced they are forming a consortium with start-up Spring Labs to create a "safe and compliant" way to exploit data to solve urgent ID and fraud issues in their respective sectors, "the companies said in a press release
Blockchain is, of course, involved. As the former president and chief operating officer of Goldman Sachs and former director of the National Economic Council in the Trump administration, Gary Cohn, and former president of the Federal Deposit Insurance Corporation, Sheila Bair, who are consultants of Spring Labs.
In general, Spring Labs is part of the blocking of the blockchain I mentioned earlier. The big vision of the company, if it succeeds, is not the anarcho-capitalist dream of eliminating the intermediaries from the various transactions, it must be a new and better intermediary. As Matthew Leising of Bloomberg notes, Spring Lab essentially wants to supplant rating agencies like Equifax.
What is significant about Spring Labs is not the product or the releasing process, which is still under development, but the list of companies that, by joining the consortium, are saying publicly that they want to that is successful. (Platform providers are among the new group members.)
A lot of powerful people, investors and companies, in other words, want Spring Labs to succeed. But this was true for the other companies in the boring blockchain space, no one more obvious than Digital Asset and its former CEO, Blythe Masters. Like that company, what Spring Labs is able to offer will be considered a determining factor for the profitability of institutionalized blockchain in finance.
Square presents a new debit card for small business customers, reports MarketWatch. (In related news, Jack Dorsey denies sending his beard details to Azealia Banks).
China will officially attempt to extend its Great Firewall to the blockchain, writes MIT Technology Review.
Fintech companies want to shake banks. And this worries the Fed, Reuters reports.
The hot new work in fintech, notes Bloomberg's Julie Verhage, is someone to deal with regulators.
Write to Ben Walsh at email@example.com