There is much talk about the push towards regulation in social lending. However this headline about Citi introduces a different point, and highlights a positive aspect of social lending that is directly tied to web 2.0 companies.
FT.com / Companies / Financial services - Citigroup’s Pandit vows major cost cuts
Vikram Pandit, Citigroup’s chief executive, has vowed to slash the beleaguered financial group’s cost base by up to 20 per cent, deepening fears that Wall Street and the City of London are about to be hit by tens of thousands of additional job losses.
The NYSE jumped for joy on this announcement .. why? The underlying assumption is that Citi can carry on with the current revenue streams, yet reduce their costs by 20%, so the benefit flows straight to the bottom line. Some might suggest there must be a chunk of fat in any company that can do that! Yet this occurs all the time, and is likely what will break the markets into positive territory as most other Banks’ make similar announcements. It is potentially just a matter of time before we see that in Canada.
The web 2.0 difference:
we are not so naive to believe that business realities will not hit us too over time. However what makes us somewhat different at CommunityLend, is that we always try to bring web 2.0 thinking to our financial services model. Web 2.0 meets reality. The advantage of a model that is purely web based is the opportunity to re-think everything in terms of customer activity and support. The promise is a better model for customers and for companies; a viable long term solution that works the way customers expect … a true win - win.
7 responses so far ↓
Andrew // April 19, 2008 at 7:45 am
Not sure your interpretation of why the market jumped for joy is entirely correct. Writedowns were less than expected, and that incited some buying of the stock.
I just happened on this site by accident and have not heard any promotion (marketing) of it. What are you guys doing to create a marketplace on day one, such that when you open you will actually have some decent volume?
I suppose with the limited capitalization you raised in your placement you’re not considering buying up some of the opening loans to stimulate demand then attempting to package and sell them off (although that could work if you had some money behind you). Probably not a great venture to undertake in the current marketplace. Does seem like that would be a fantastic thing to do in the future though. Would be fantastic to purchase up bundles of self-originated loans and then use them to back short-term paper, yeah? Would have been at least, if we still had an ABCP market in Canada…
Colin // April 19, 2008 at 2:26 pm
Andrew …. The social lending story is relatively new in the world, although there are close to 30 companies involved now, in 15 + countries. The awareness level is growing, and when we complete our regulatory process, here in Canada, and go to market, we hope are are successful in getting the service out there for the right people.
Thanks for stopping by, and keeping the dialog going.
PS … re the markets, I defer to your knowledge. This was the take in the Financial Times “Wall Street stocks cantered towards the weekend break, climbing for a fourth straight session on Friday after Citigroup posted first-quarter results that were worse than some expected but better than many feared”
Dave // May 7, 2008 at 2:02 am
Colin,
I think what Andrew means is that before you launch, or Just before you’ll need a hardcore advertising campaign via print, radio and online to get the volume of interest you need to get this off the ground in a big way right off the bat. I think you’ll have more difficulties encouraging people to use communitylend than you’ll have getting people to lend (invest). I myself am interested in the lending aspect as a way to diversify investments. Finding borrowers, and a lot of them, is what will make your company roll. Can you discuss in brief what your plans are for marketing and advertising your company/product?
Colin // May 7, 2008 at 2:15 am
@Dave … re difficulties, we are well aware of many of those that we will have
With regard to developing volume of borrowers, we now this will largely be a marketing and awareness programme, and we have many ideas in the pipeline to address. We cannot get that ball rolling until we have the service available, and that is the current state that we are in. We have patience and believe in the model and its attractiveness to borrowers.
Dave // May 7, 2008 at 11:38 pm
Hi Colin,
Thank-you for your speedy response. I am knowledgeable in marketing myself and what I was wondering is do you have Press releases and Online advertising campaigns ready at the press of the buttom after you sort through the regulation issues and are ready to launch? I would really like to see this succeed..and I’m sure you guys have the plans in place already
Colin // May 7, 2008 at 11:53 pm
@Dave … we are ready …..
connie // May 9, 2008 at 5:22 pm
There are a ka-trillion of us out here waiting for you guys!!! Word of mouth is the most powerful advertising tool there is!! Just waiting for your doors to open……
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