U.S. Commercial Credit: One Door Closes, Another Opens
Report Summary
U.S. Commercial Credit: One Door Closes, Another Opens
Alternative Funding Sources Could Take The Bank If Banks Remain Unable To Embrace Opportunity.
Boston, August 21, 2013 - The U.S. commercial credit market faces the insistent challenges of a global financial market gone awry. Portfolio growth lags growth seen in other post-recession periods, and much of the blame rests squarely with U.S. regulatory oversight agencies. Dodd-Frank, the "gift that keeps on giving," consumes resources and IT budgets for many banks, making compliance challenging and devouring bandwidth that banks need to embrace new opportunities. Meanwhile, new business finance competitors have emerged, leveraging technology and alternative financial data in unique ways and positioning themselves to usurp the commercial-credit leadership roles that banks have long enjoyed. Will banks or new startups win this race? Can banks see the forest of opportunity through the regulatory trees?
This Impact Note by senior analyst Christine Pratt provides an overview of today's commercial credit market, focusing on challenges and trends that threaten to radically change the financial ecosystem, and discusses emerging competitors that leverage technology and domain expertise to enable financing for underserved businesses. This piece is based on ongoing, in-depth Aite Group discussions with and interviews of senior management at U.S. banks, credit unions, and finance companies that boast significant commercial loan portfolios. It is the first in a two-part series about U.S. commercial credit.
This 25-page Impact Note contains nine figures and five tables. Clients of Aite Group's Wholesale Banking or Institutional Securities & Investments services can download the report.