Lending Loop: FinTech Disruption in Canadian Banking
(10 pages of text)
Lending Loop, a Canadian marketplace (peer-to-peer) lending start-up, was founded in 2014 and launched to the public in 2015. It competed with other peer-to-peer lenders to challenge the Canadian chartered banks and other financial companies for part of the Canadian small-business lending market. Without an established regulatory regime in place, it operated according to its lawyers’ interpretation of securities law. The founders needed to scale their business quickly and strategically to gain a first-mover advantage in the industry and to position their company as a major stakeholder for future regulatory decisions.
The case is suitable for undergraduate and graduate students in courses in strategic management; business, government, and society; entrepreneurship; and marketing. It is intended to engage students in discussions on competitive advantage, strategic development, government regulatory systems, entrepreneurial financial technology, and disruptive innovation and technologies. Following the discussion of the case, students will be able to do the following:
- Recognize the disruptive abilities of financial technology companies.
- Understand how business models diffuse according to regulatory regimes.
- Identify the risks of entering an unregulated market.
- Assess regulatory arbitrage opportunities.
- Understand the effects of regulation and market pressures on competitors.
- Build a business model using assumptions to make strategic decisions.
Finance and Insurance
Canada, Small, 2015
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