Lincoln-based Nelnet announced on Monday that the company is expanding its service options to provide new services to fintech lending platforms.
A press release from Nelnet said that “Nelnet Loan Servicing will leverage the experience, scale, and personnel of its existing servicing business with technology enhancements to meet the unique needs of fintech companies with primary and backup servicing.”
Nelnet is a publicly traded finance and technology company. The company’s largest business unit handles loan servicing, with just over 4,300 employees in its domestic operational centers.
Nelnet has more than 40 years of loan servicing experience and currently provides servicing for over $455 billion in loans for 16.2 million borrowers. The business processed over 32 million payments in 2017.
“Nelnet provides a tested and scalable servicing partner for loan originators that are looking to grow,” said Jeff Noordhoek, Chief Executive Officer of Nelnet. “We have developed an expertise in serving complex, highly regulated assets. We believe we can leverage this expertise to serve new asset classes.”
The progression of the fintech industry means consumer and business loan markets are also advancing. To support the industry’s rapid growth, these lenders require a servicing partner that can maintain a consistent customer experience at scale, while also providing investors with financial strength and stability.
“Our clients are lenders who make consumer loans online, so this is a growth into the fintech space,” said Noordhoek. “There are all types of lenders out there now that are making loans directly to consumers on the internet. They need someone to step in and process the loans. That’s what we do.”
As an investment-grade company, Nelnet can help manage investment risk for companies using balance sheet, warehousing, and securitization to spur additional growth.
“We think we’re unique in our competitive advantage in that we’re an investment-grade rated servicer,” said Noordhoek. “We can’t find any other third party servicer in the fintech space that is investment-grade rated, nor have the capital which is a strength of our company.”
Nelnet’s loan servicing systems are being migrated to a cloud-based microservices framework, to allow for integration and a focus on customer experience. The company’s white-label servicing will give lenders the ability to feature their own branding on their servicing experience.
Nelnet Loan Servicing is already attracting interest from origination and investors. The company will be announcing new partnerships soon.
Nelnet has offices in Lincoln, Omaha and Denver and it is potentially looking to hire additional people as this new piece of their business grows.
“Depending on how many clients we bring on, it could be a large portion of our business,” said Noordhoek. “Nebraska is our home base, and we always try to expand in Nebraska as opportunities present themselves.”
Noordhoek said the Midwest is Nelnet’s home and he thinks it’s one of the best places to employ associates.
“We feel it’s a competitive advantage to be located in Nebraska versus other servicers in the fintech space,” said Noordhoek.
Christine McGuigan is the Managing Editor of Silicon Prairie News.