Cion Digital’s new Advisor Lending Platform connects wealth professionals and firms with lenders in a more efficient process than was previously available.
They also now offer their product suite to a more significant portion of the financial services and retail sectors.
The Advisor Lending Platform automatically produces a range of loans from participating lenders that meet the needs of both sides. Those lenders include banks and DeFi protocols. The platform supports various loan types with different collateralized assets, including digital assets, securities, bonds, and real estate.
Advisor Lending Platform meets many needs
Cion Digital’s chief product officer Taylor Adkins previously worked in lending. He said there has long been a gap between wealth technology and the banking and fintech industries.
Financial advisors need the technology to facilitate the next steps when identifying financing needs. They either have to let the client do it alone, or they manually shop the need to lender after lender. They’re not paid to do this, and there’s no assurance they are speaking to the best opportunities for their client.
“It’s a lot of work,” Adkins said. “It’s inefficient and often not entirely effective. The advisor isn’t the lender; they don’t have the right tools to support that problem effectively.”
When developing the Advisor Lending Platform, Cion Digital spoke with dozens of industry professionals and learned how widespread this problem is. The average financial advisor refers loans to more than half of their clients.
The Advisor Lending Platform also addresses unique financial situations, such as those of retired high-net-worth people or between businesses. When they have no income, lending models don’t function.
AI, machine learning drive value
Cion Digital’s solution does, Adkins said. It deploys artificial intelligence and machine learning to match the borrowers to the right product and lender.
Adkins advised that AI and machine learning will do more in the coming years. Beyond matching borrowers and lenders, they can identify when a cash flow problem is developing and proactively suggest actions.
The pandemic shaped the product, confirmed the vision
Cion Digital debuted during the COVID-19 pandemic. Adkins said the timing did affect the product design. They sought to deliver benefits even in a downturn, as lenders still look to grow. The need for creative financing increases in those climates, and AI and machine learning can help. Lending is always in demand. Rates drop, and more want to borrow. As they rise, more want to lend.
Adkins said some of that product flexibility comes with allowing cryptocurrencies and other assets to be used to secure and collateralize loans. Even given the sector’s recent travails, crypto remains an essential aspect of the Advisor Lending Platform’s design.
And crypto will still have a role
“We’re continuing to invest in the technology,” Adkins said. “We also see a really powerful moment where, as we build out, traditional lending technology and relationships with crypto do begin to become mainstream, we’ll be well positioned to be able to provide that technology, and that use of that asset to mainstream lenders who maybe aren’t so comfortable with it right now.
“Our ability to promote crypto within our product and make it part of a mainstream conversation will be valuable for our future goal and growth as a company. It also allows us to work with legitimate investors and lenders to understand where that balance really is. That’s desperately needed, specifically in the crypto lending space.”
Choosing the right partnerships
Adkins said Cion Digital selectively seeks technology and distribution partnerships as part of its growth strategy. The selectivity comes from the desire to avoid the mistakes of traditional marketplaces, which created feeding frenzies for customers. Many systems overdosed on data but eschewed interpretation.
Choose the lenders and institutions that can deliver the products customers need. Create a system where all participants realize value. Create optionality, but not so much that it ultimately becomes worthless.
Adkins added that partnerships sometimes answer the “build versus buy” problem. Cion Digital needed to act quickly, so they created a consortium of like-minded partners who could help them expand their capability.
Empower financial advisors to deliver more value, and they become the go-to place for all of a client’s financial needs, Adkins said. This effort positions the advisor in a critical, profitable role while simplifying client financial matters.
Empowering a collaborative approach
As investors accumulate assets, they interact less frequently with banks, but it doesn’t have to be a competitive situation, Adkins stressed. The average person has five bank accounts across multiple financial institutions. In a sense, those organizations are already collaborating on a person’s financial matters.
“When you think about, specifically, community and regional banks, we’re creating a compelling opportunity for them to be able to work together to support their mutual clientele to compete against larger advisors who do this in-house and are typically focused on themselves rather than the client,” Adkins explained. “So, I think that’s an important mechanism to think about.”
As he looks ahead, Adkins sees possibilities beyond finance. Customers struggle to find depository solutions, alternative investments, and insurance.
“This concept of curating the right products and the right providers based on the client’s unique needs and financial objectives and then fulfilling their transaction with that downstream provider… We feel it’s ubiquitous, and we see other places where we could play as we go forward,” Adkins said. “We also see areas where that same story plays out in the financing world and other verticals, for example, enabling retailers, or even financial aid administrators of universities to help their clients access the funding they need, regardless of their kind of unique financial or economic situation.
Tony Zerucha is a long-time contributor in the fintech and alt-fi spaces. A two-time LendIt Journalist of the Year nominee and winner in 2018, Tony has written more than 2,000 original articles on the blockchain, peer-to-peer lending, crowdfunding, and emerging technologies over the past seven years. He has hosted panels at LendIt, the CfPA Summit, and DECENT's Unchained, a blockchain exposition in Hong Kong. Email Tony here.