Financial Services and Technology

Technology change, including the adoption of AI, has dramatically changed the financial services industry and banks, insurance companies and other financial institutions that initially resisted this seismic shift are now rushing to catch up. Many established financial services companies, challenged by system conversions that strain budgets and customer relationships, have been forced to merge with competitors because they cannot afford the cost of technology upgrades needed to compete with newer companies that have a “clean slate” advantage. Indeed, technology has become the driving force of financial services, and the distinction between traditional financial companies and newly established FinTech companies is quickly disappearing. Lakewood Advisors has been closely involved in several important areas of this changing landscape.

Lending

Technology has decreased the time and expense involved in originating, underwriting and servicing loans, and firms that offer technology-enhanced lending through proprietary systems have recently commanded investment premiums that are significantly higher than those of traditional lenders. In response, large lenders have built their own platforms, challenging the business models of smaller, tech-based lenders. At the same time, private direct lenders have raised large amounts of capital and are competing with money center and community banks. Our extensive experience with banks, direct lenders and fin-tech firms has led to a growing number of advisory assignments in this area.

Over the past several years we have also become a leader in managing UCC auctions for direct lenders needing to foreclose on the assets of defaulting borrowers. Our capabilities in this area can be found here (PDF).

Banking Regulatory and Asset Quality Issues

Working with Secura/Issac Group, we advise multi-national, regional and community banks dealing with regulatory issues and problem assets. We maintain close working relationships with federal and state banking regulators and have successfully helped banks and other financial services firms anticipate and navigate challenges brought about by rapid advances in technology and a complex, shifting regulatory landscape. Our Partner Bill Isaac is the Chairman of Secura/Isaac and a former Chairman of the FDIC.

New Challenges

Lakewood Advisors works with many financial services companies that larger investment banks are ill-equipped to serve. In the growing field of payment processing, for example, we have advised firms that specialize in providing services to un-banked and under-banked residents of the United States. Our long-standing relationships with private equity firms, family offices, direct lenders and high net worth individual investors enables us to help companies at all stages of development find strategic capital or merger and acquisition opportunities. As required, our advisors serve on the boards of directors of companies and in interim management positions.

 

 

Lakewood Advisors is available for confidential consultations with management, investors and board members.