October 01, 2018

Interview with Frank Otten, Management Board of Varengold Bank

The marketplace banking commitment

Hamburg, 1 October 2018

F: Mr. Otten, you are focusing with Varengold Bank on Marketplace Banking. What is the reason for that?

"Banks have not done very well in the past with regard to our core task. It is our job to give people access to capital and financial services. Fast and uncomplicated. FinTechs have recognized what we have missed and developed in a viable alternative, offering the Marketplace Lending Platforms. That's why we finance marketplaces and support their fast and successful growth.”


F: But in which case, Varengold Bank could simply become more involved in the credit business itself? 

"Above all, the marketplace lending platforms score in terms of ease of use, modern technology and speed. They are perfectly positioned for this with their technology-driven, efficient processes. We could not offer that any better or faster – at least not without investing heavily in the expansion of our IT department. We are not a FinTech. We are a bank and will remain as a bank.”


F: And what is the consequence of that?

"We offer FinTechs our banking expertise and banking license, without which they are not allowed to handle credit in most European countries. Coupled with their technological expertise, this creates future-proof banking products that combine the best of both worlds. This means that everybody benefits.”


F: You are not the first and not the only bank to offer FinTechs their banking license and help. What do you do differently or better than the competition? 

"We work with the ideas of our potential customers at a much earlier stage and are ready to invest even in the early stages. Above all, we want to position ourselves with our marketplace lending offer and help the FinTechs grow by refinancing their loan portfolios.”


F: That means that you give the money and for everything else, the FinTechs are looking for another partner?”

"No, quite the opposite. We start with financing, because a marketplace needs capital for its business model in addition to a banking license. However, the refinancing of the loan portfolio should only be the beginning of long-term cooperation. We support the customer with our modular fronting services in lending and account services. In addition, we acquire suitable partners in the areas of DCM and ECM via our network, in order to cover any additional borrowing and equity requirements of our customers. They choose the building blocks they need for their business model. And since they are connected to our banking system via modern interfaces, they can then quickly enter the market.”