Luna Connect: A new digital disrupter in the lending landscape

The lending software speeds up applications for loans through automated data gathering

Brian D’Arcy of Luna Connect says the company ‘saw an opportunity to build a product for financial institutions that would accelerate their digital transformation’. Photograph: Andrew Downes

Brian D’Arcy of Luna Connect says the company ‘saw an opportunity to build a product for financial institutions that would accelerate their digital transformation’. Photograph: Andrew Downes

 

Luna Connect is a new digital lending platform primarily aimed at those lending to SMEs. It is designed to fit into the rapidly evolving financial services ecosystem and its founder, Brian D’Arcy, drew the inspiration for his business from the disruption currently underway in the financial services sector.

“We saw an opportunity to build a product for financial institutions that would accelerate their digital transformation, and lending is an area where digital can reduce cost and risk,” Brian D’Arcy explains. “Luna Connect eliminates paperwork, uses a single platform to process data, helps lenders make better quality lending decisions and to create innovative new products by leveraging analytics and connected data.”

D’Arcy has a background in enterprise software development, data analytics and artificial intelligence and more than 15 years’ experience in building solutions for large multinationals such as Hewlett Packard. His formal training is a degree in computer science and a Master’s in Information Systems.

“Luna Connect reduces origination and processing costs and risk for the lenders while providing a better experience for borrowers with quicker decisions and improved customer service. It also allows borrowers to submit loan applications and connect their data online. At the moment people can spend up to two weeks gathering the necessary data to support applications,” D’Arcy says. “Our real-time algorithms analyse the data submitted and lenders can make decisions in minutes, instead of days. Built from scratch for lenders, manual decisions are replaced with a hybrid of human and artificial intelligence.”

Growth

Luna Connect was established in September 2017 and currently employs two. It is based in Galway’s Portershed innovation hub. Employment is set to rise to seven people this year and to 15 in 2020. “Disruption of online lending is already underway with players such as Kabbage and Funding Circle, but they only have a small market share which presents a golden opportunity for us,” says D’Arcy whose company recently beat off stiff competition from around Europe to win one of 30 places on the EU-backed Data Pitch accelerator which provides funding and mentoring to data-driven startups.

“Our proprietary technology provides lenders with the tools to deliver online loans and quicker decisions with no up-front capital expenditure or expensive integration projects. With just two lines of HTML code, our product can be integrated into a lender’s website, and most importantly, our solution enables costs to scale in proportion to the value of the loan, improving margins and making small-value loans profitable. There is currently a lack of quality data available about borrowers,” D’Arcy says. “This leaves lenders relying on slow, expensive paper-based processes to reach a credit decision. Borrowers then get frustrated because they expect the same efficiencies they get from digital services in other parts of their lives.”

The company’s target market are lenders offering loans of under €200,000, whose borrowers typically require a fast decision on their application and want a more transparent lending process. The initial focus will be on Ireland and the UK with Europe and the US to follow. Investment in the project to date has been around €120,000 which was self-funded with support from the NDRC and Enterprise Ireland through the competitive start fund.

Luna Connect was launched last November and a number of pilots are now underway with potential customers which include credit unions, peer-to-peer lenders and banks.

D’Arcy says 2019 will be a period of consolidation for the company as it turns pilot clients into paying customers. The company’s cloud-hosted product is software as a service, and it will charge its customers per loan application. Luna Connect will have its full commercial launch in May this year.

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