Interview with Frank Otten, Board Member of Varengold Bank, about his commitment to Marketplace Banking

Frank Otten, Member of the Management Board of Varengold Bank

Mr. Otten, with Varengold Bank you are concentrating on Marketplace Banking. What are the reasons for this?

"In the past, we banks have not performed our core task very well. Our job is to give people access to capital and financial services. Fast and uncomplicated. Fintechs have recognized what we have missed and developed a sustainable alternative offering with the Marketplace Lending platforms. That's why we finance marketplaces and support their rapid and successful growth."

But then Varengold Bank could simply become more involved in the lending business itself?

"Marketplace lending platforms score above all with their user-friendliness, modern technology and speed. With their technology-driven, efficient processes, they are perfectly positioned for this. We could offer this neither better nor faster - at least not without investing heavily in the expansion of our IT department. We are not a Fintech. We are a bank and remain a bank."

And what is the consequence of that?

"We offer Fintechs our banking know-how and our banking license, without which they are not allowed to conduct credit transactions in most European countries. Combined with their technological expertise, they create future-proof banking products that combine the best of both worlds. Everyone benefits from this."

Now you're not the first and not the only bank to offer Fintechs your banking license and help. What do you do differently or better than the competition?

"We deal with the ideas of our potential clients much earlier and are ready to invest even in the early stages. We want to position ourselves above all with our Marketplace Lending offering and help Fintechs grow by refinancing their loan portfolios".

This means that you give the money and the Fintechs look for another partner for the rest?

"No, on the contrary. We start with the financing, because a marketplace needs capital for its business model in addition to a banking licence. The refinancing of the loan portfolio should only be the beginning of a long-term cooperation. With our modular fronting services, we support our customers in granting loans and servicing their accounts. In addition, we acquire suitable partners in the areas of DCM and ECM via our network in order to cover any additional debt and equity requirements of our customers. He chooses the building blocks he needs for his business model. And since he is connected to our banking system via modern interfaces, he can enter the market quickly."