Anshu Jain, the former co-chief executive of Deutsche Bank, is to join online lender SoFi as an adviser in his first venture since he left Germany's biggest bank at the end of last year.
In joining SoFi, a San Francisco-based company best known for refinancing student loans, Mr Jain becomes the latest in a succession of former big-bank chief executives exploring the emerging world of financial technology. Vikram Pandit, once of Citigroup, and John Mack, formerly of Morgan Stanley, have developed portfolios of investments in small but fast-growing companies seeking to challenge traditional brick-and-mortar lenders.
SoFi, which has raced to about $8bn of funded loans since its founding in San Francisco in 2011, has styled itself as a scrappy upstart taking on some tarnished giants. Chief executive Mike Cagney — a former banker at Wells Fargo — has said that the likes of JPMorgan Chase, Bank of America and Citi have become "commoditised utilities of questionable value and little trust", and that smaller, nimbler groups such as SoFi are better equipped to meet customers' needs.
Mr Cagney told the Financial Times that Mr Jain's experience should be valuable as SoFi looks to broaden its sources of funds beyond securitisation programmes and sales of loans to banks. As a non-bank, SoFi cannot rely on deposits, so it has to go out and seek other forms of capital.
"We're in dialogue with insurance companies, pensions and sovereigns, talking about ways they can participate in our growth," said Mr Cagney. "There are lots of ways to structure those relationships, to make sure the structure benefits everyone participating."
Mr Jain's appointment comes at a testing time for the marketplace lenders, which have steadily chipped away at the dominance of the traditional lenders over the past few years. While industry growth still remains rapid, regulatory hurdles are beginning to emerge while delinquencies have begun to pick up among some of the riskier classes of borrowers.
Shares in Lending Club, the largest listed online lender, which specialises in personal unsecured loans, have lost 60 per cent of their value over the past 12 months, ranking among the bottom three on the Russell 1000 financials index.
SoFi began with student loans and has since pushed into mortgages, personal loans and wealth management. Last autumn the company closed the biggest ever round of funding for a fintech company, raising $1bn from investors including SoftBank, the Japanese telecoms group. This year it is aiming to raise $20bn of loans: $4bn in mortgages, about $7bn in personal loans and the balance in student loans.
Much of its growth has been from a group of wealthy professionals Mr Cagney calls "Henrys" — short for "high-earning, not rich yet". A recent Super Bowl ad emphasised the group's exclusivity, ending with the line: "Find out if you're great at SoFi.com. You're probably not."
Mr Jain's three-year spell at the helm of Deutsche ended unhappily amid investor unrest over the direction he had set with Jürgen Fitschen, the other co-head. Last June he announced he would step down but agreed to stay on until the end of the year as a consultant. He is joining SoFi as an adviser, but would take a seat on the board within a few months, Mr Cagney said.
Mr Cagney said he was introduced to Mr Jain via a mutual friend at SoftBank and first met the former Deutsche chief executive in the middle of last year, at the company's offices in San Francisco. "He showed up, I was wearing shorts and a T-shirt," he said. "It didn't put him off."