The major German consumer credit banks are successfully squaring the circle. Successful market examples such as Santander Consumer Bank or Hanseatic Bank demonstrate that stable cash flows can be generated in this market segment with an attractive risk/return profile. Until now, however, the consumer credit asset class has only been accessible to highly specialized investors. The aim of the Consumer Finance Summit was to raise awareness of the market segment among institutional investors and bring together the relevant stakeholders. There were excellent opportunities for networking. And with around 60 visitors, almost half of whom were investors, the Summit, which was held for the first time at the Hilton Cologne Hotel, was also well attended.
The Digital Lending market has grown rapidly across Europe in recent years. In the first half of 2022, the share of consumer loans brokered online in Germany amounted to more than 30%. In addition to prominent platforms such as auxmoney, with a loan volume of more than 3.5 billion euros, the Swiss platform LEND or Younited Credit from France, there are a large number of rapidly growing lending platforms in almost every European country. The Consumer Finance Summit provided an in-depth insight into the market and the attractive opportunities available to investors. The key questions were:
- What are the opportunities and risks associated with Digital Lending?
- What are the success factors for diversified Digital Lending investments?
- What significance does the currently negotiated revision of the EU Consumer Credit Directive have for consumer loans mediated online?
- How resilient are these loans in the event of a recession?
The program was packed with interesting presentations and top-class panels:
- Presentation 1 with Marco Hinz, COO CrossLend GmbH & DLA Executive Board Member, on the topic of „Status quo Digital Lending – market size and development“. He impressively demonstrated the rapid development the segment has undergone over the past decade. Regulation and changing investor habits are leading to increasing differentiation in portfolios. Digital Lending is becoming more and more important as an asset class. In short: Digital lending is here to stay!
- Panel 1, moderated by Constantin Fabricius, Managing Director of the Association, on the topic of „Current opportunities and risks in Digital Lending“. Florian Kübler, Co-Founder, CRO & Head Commercial Lending, LEND – Switzerlend AG, Philipp Kriependorf, Co-Founder and Co-Managing Director of auxmoney and member of the DLA Executive Board, Michael Herschlein, CEO Germany of Younited Credit, and Frédéric Dujeux, Co-Founder and Managing Director of Mozzeno, took part in the discussion. The panelists and interesting questions from the audience made it clear that professional risk and compliance management is the key to success for originators. The more professionally and qualitatively this work is performed, the more appealing the asset class will be.
- Panel 2 was also moderated by Constantin Fabricius and dealt with the topic of „Success factors of diversified Digital Lending Investments in Asset Allocation“. The panel consisted of Bernhard Fuhrmann, CEO of Varengold Bank, Thomas Bayreuther, Director Head of Treasury and Investment Management at N26, Tonko Gast, Founder and Chief Executive Officer of Dynamic Credit Partners, and Adrian Hummel, Portfolio Management Marketplace Lending at Tavis Capital. The panelists impressively confirmed that Digital Lending has long been investable for a wide range of investors. And there are now opportunities for different tastes: for those who want to invest directly themselves or for those who want to go through a fund. There are various reasons for this in the investment strategy – anything is possible. However, it became clear that direct investment in Digital Lending requires a high degree of technical expertise, risk control and proximity to the assets.
- In the 2nd Presentation of the day, Romy Ritter, COO and member of the Executive Board at Exaloan, dared to take a look into the crystal ball under the title „Digital Lending Quo Vadis – Trends and Outlook“. She drew attention to the increasing professionalization of the investment segment. The best expression of this is the development of industry standards, as promoted by the DLA. In the future, however, this will no longer be enough, as the topic of ESG is increasingly becoming the focus of all considerations for platforms – even if it is not required by regulation due to the specific business model.
At the end of the official part of the Consumer Finance Summit, Christian Finke, CEO of Monega KAG, once again emphasized the importance of the event. It became clear that with Digital Lending, something new and relevant is finding its way into asset allocation – and is also finding its way with many investors.
Following the official part of the program, the three organizers, Monega KAG, nordIX AG and DLA, offered all guests the opportunity to exchange ideas and network over delicious food and drinks. The many positive reactions encourage DLA to repeat this format soon.
We will be back!