CommonBond’s new play for more student loan refi partners
The online student lender CommonBond wants to recruit more banks as refinancing partners, and to use insights gleaned from its partnership with Fifth Third Bancorp to make that happen.
CommonBond recently developed, with input from Fifth Third, a digital platform called CommonBond Ignite that would offer financial services companies a way to refinance student loans if they do not do so already. It could be used to court new customers or to cross-sell to existing ones.
“We’ve taken a product that not many large financial institutions have and we’ve shown that this is a product at the top of the consideration set for a really important customer set,” said David Klein, CEO of New York-based CommonBond. The new platform “is an opportunity for us to get in front of millions of people we wouldn’t have gotten in front of otherwise.”
He said the platform uses application programming interfaces to send consumer data back and forth between CommonBond and the client institution. A bank might use it to help branch employees start conversations about student loans with prospects, for example.
The $171 billion-asset Fifth Third is one of several banks to take an equity stake in CommonBond and was the first to forge a referral partnership with the digital student lender. Ben Hoffman, Fifth Third’s head of fintech and co-head of strategy, said the Cincinnati company shared insights it learned about its student loan refi borrowers to help CommonBond develop the new platform.
Given the magnitude of student debt — at $1.5 trillion, it’s the largest consumer debt category after mortgages — Hoffman said he expects to see more demand for such products among banks.
“It takes a lot of expertise to do it yourself,” he said. “I would expect more banks to at least test the waters via partnerships."