Credit marketplaces are still in their infancy in Europe. But the potential is huge, according to Varengold Bank, which cooperates with numerous providers.

The credit by click is becoming more and more popular - but the market in this country is still rather small.

Dhe relationship between banks and start-ups that offer special financial services on the Internet, the so-called fintechs, has not yet been fully clarified. Are these niche providers or are they the future of the industry that are displacing the top dogs? The listed Varengold Bank, with total assets of 665 million euros most recently, about as large as Sparkasse Emden, has increasingly turned to the young industry in recent years. Formerly a securities trading bank, it withdrew from the business in 2013 and deleted the addition “securities trading” from the name.

At that time, the current board members Bernd Fuhrmann and the former Landesbanker Frank Otten joined the management team. “The main business with Contracts for Difference did not appear to be sustainable in the long term,” says Otten. “We had to give the bank a new face. Three things were important to us: First, it should be something that makes a difference. The world doesn’t change when transfers are processed in 3 seconds instead of 5. Second, it should be small-scale business in order to better diversify the risks and, thirdly, it should be possible to have costs under control from the start in order to be profitable as quickly as possible. “

Cooperation instead of participation

In the end, you stayed with the credit business. “Young companies and most private customers often do not fit into the target profile of established banks. Therefore, they do not get any reasonable loan offers. We wanted to change that. ”Fuhrmann and Otten saw a niche with potential in this that would be large enough for some providers. You don’t have to make these offers yourself, Varengold said with a view to the growing number of credit platforms on the Internet.

However, the path should not be one of participation, because, as Otten repeatedly emphasizes, in the end it is always about managing the risk. “Cooperations are simply faster and more efficient,” says Otten. “The advantage of a bank is that it can refinance more cheaply than a fintech. In addition, it enjoys a comparatively higher level of trust among private investors. The challenge for fintechs is refinancing, they have their digital product under control. And for the partner bank it is not the technological fine-tuning that is decisive here, but whether it can help the customer. “

Varengold develops credit products together with the fintechs, but most of all they finance the credit book. Otten is not afraid of competition. The growth limit has by no means been exhausted, and as long as the entire industry jumps on the same train, one will in any case be able to continue to work successfully.

That is why the bank is very satisfied that it tends to stay in the background. Otten still has big plans. Varengold is said to be the first name that the operators of a credit marketplace come up with when it comes to partners for strategic development and refinancing – not only in Germany and Europe, but worldwide. But that will still take hard work.