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Upstart launches new offering to connect borrowers with banks

The company's offering is called Upstart Referral Network and aims to help consumers get affordable credit while helping banks build “more inclusive” loan portfolios

Artificial intelligence lending platform Upstart fully launched its offering Upstart Referral Network to connect borrowers with banks and credit unions.

The automated system aims to help banks build “more inclusive” loan portfolios while consumers can obtain more affordable credit, the company claims.

Upstart, which is based in California and Ohio, was founded by former Google executive David Girouard and recently made headlines for its soaring shares.

Michael Lock, SVP of Bank Partnerships for Upstart, told FinLedger that the company does business two ways.

“We aggregate demand for personal loans on the internet,” Lock said. “Consumers can find us on upstart.com. The other way we do business is banks can white label our product and put it on their website, and use our technology to take it to their customers.”

The Upstart Referral Network offering aims to help banks put the rising levels of cash deposits to work. It also has new features including an analytical dashboard that lets banks track loan originations. Meanwhile, borrowers can automatically open a new checking account with banks and credit unions during the application process.

“To provide more people in our community access to affordable credit while effectively managing risk, KEMBA chose the Upstart Referral Network to get to market quickly and expand member reach,” Brent McCoy, Chief Credit Officer, KEMBA Financial Credit Union said in a statement. “Through Upstart’s AI-powered models, we are able to offer fairly-priced personal loans to more borrowers.”

Lock went on to explain that Upstart is not a bank and it doesn’t want to be a bank either — a key differentiator with other competitors in the marketplace.

“We’re the personal loan player in the marketplace. who has volume who will refer stuff to you, and we don’t compete with you,” Lock said. “We’re going to hand you not only the loan, but we’re going to hand you the customer.”

Upstart’s shares were trading at $118, down 28% on Tuesday afternoon. However, on Monday, CNBC reported that Upstart’s shares closed at $164.87, up from $60.79 in the middle of last week. The company’s valuation has soared past $12 billion. Upstart, which was founded in 2012, went public in December and was valued at $2.1 billion after its market debut, CNBC reported.

On March 17, Upstart reported its fourth quarter 2020 earnings and fiscal year 2020 results.

“What we showed Wall Street last week is that there’s a lot of volume online, and then we’re winning that volume,” Lock said.

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