*By Tanaya Macheel* HSBC U.S. has entered the personal loans arms race through a partnership with the online lender Avant, in the decades-old institution's latest initiative to bring its business further into the digital-first present, level the playing field between banks and start-ups, and grow its domestic brand. Next year, consumers will be able to apply for personal loans up to $30,000 on the HSBC ($HSBA) website within minutes and, if approved, they'll receive a decision within 60 seconds and have the funds in their accounts within a day. Rates will range from 5.99 percent to 25 percent; repayment terms extend as long as five years. "A bank lends money; a bank is not necessarily known for being the world's best technology company," Jeremy Balkin, head of innovation at HSBC's U.S. franchise, told Cheddar ー a rare perspective from a U.S. bank executive, since many call their firms "tech companies with a banking license." "Our franchise in the U.S. has ー as most retail banks in the U.S. ー has tended to be branch-dependent, serving a one-to-one model ... Having the technology allows us to serve a one-to-many model." That allows HSBC to lend to any borrower, even if they don't physically enter the branch. Balkin did not comment on how he expects the volume of loans to change from the partnership. The new offering will allow HSBC to compete directly with Goldman Sachs’ ($GS) Marcus, which has been operating as its own retail finance start-up within Goldman’s walls, but will soon migrate to the investment management division as it prepares to launch a wealth management product for Marcus users. HSBC is entering a ring that also includes lending start-ups like LendingClub ($LC), Prosper, and even Avant itself. These start-ups provide their own consumer-facing platforms that lower the barriers and costs of borrowing. Avant also has a bank partnership platform, Amount, through which companies with massive scale like HSBC can easily bring that same value into their own institutions without spending the time or resources it would take to build its own comparable platform or product. Chicago-based Avant has received more than $600 million in equity funding since its inception in 2012 and originated more than $5 billion in loans over 800,000 transactions. Online lenders launched more than 10 years ago with products and experiences banks couldn't offer. Now, with banks' existing scale, these partnerships are allowing them to get re-emerge and enter the competition with start-ups. The partnership is also a step in growing the bank's brand in the U.S. HSBC ー which stands for Hongkong and Shanghai Banking Corporation ー is best-known among its home-market customers in Hong Kong and London as a global bank, and it doesn't have the same brand recognition with Americans. But HSBC is just as committed to that international clientele. "One of the things that attracts the hundreds of billions of people to this great country is the opportunity for economic development, economic prosperity," Balkin, an immigrant himself, from Australia, said. "That's not a cycle, it's a consistency with the DNA of this great country." Three years ago, HSBC's U.S. franchise spent $131 million to transform its retail experience in the U.S., upgrading and replacing systems and consumer apps. Now it's on a partnership spree to advance both its physical and online banking. Earlier this month, it partnered with Marstone, a digital wealth management company, which allowed the bank to create a software-based investment advice platform (aka robo-advice) for its customers. It also partnered with Samsung ($KRX), which provides smartwatches to staff in the bank’s flagship 5th Avenue New York location, to improve the efficiency and quality of the in-branch customer experience. In June, an agreement with SoftBank Robotics brought Pepper the robot into that same branch to communicate customer needs with staff, provide tutorials and instructions on the bank’s self-service options, and offer information on other products, services, and promotions. "We've been in the lending business for 153 years as a bank," Balkin said. "What's changed is the level of technology and expectations." For full interview [click here](https://cheddar.com/videos/hsbc-enters-personal-loans-race-with-avant-partnership).
