In a world in which US marketplace lending giants Lending Club (aka “we have an award-winning sailing team”) and Prosper (aka “we don’t”) get the go-ahead from the US Treasury Department to allow non-US citizens and permanent residents to become investors and borrowers in their respective platforms, what’s the first thing that LendingClub and Prosper execs do?
Probably party, hard. After that, they might start looking into currency conversion solutions, researching how this potential demographic shift will affect taxation policies, and even consider doing A/B testing to optimize landing page models for different geographies (they should probably be doing this anyway).
One thing that might slip under the radar is language barriers. Sure, LendingClub and Prosper will realize that some translation will have to transpire if they want to lure people away from the marketplaces in their home countries. Nevertheless, there’s a good chance that cross-border communication might not be these companies’ most pressing concern. After all, marketplace lending worships at the altar of numbers – not words.
The communication opportunity
However, if LendingClub and Prosper want to successfully market their respective religions, they’re going to have to invest more in multilingual infrastructures. It turns out that international miscommunication is costing businesses money, big time.
A 2012 study conducted by the Economist Intelligence Unit (EIU) surveyed 572 business executives from around the globe and found that bungled international communication had serious implications for business: over half of the respondents claimed that “ineffective communication or inadequate collaboration had obstructed major international transactions, inevitably resulting in financial loss.”
Two-thirds of the respondents felt that language and cultural differences made it difficult to gain a foothold in foreign markets in the first place.
From a consumer perspective, a 2008 Canadian study found that website usability increases when it was originally conceived in the native language of the user, not merely translated. Good old-fashioned translation, no matter how outstanding it is, doesn’t guarantee user understanding; it is only “a culturally adapted website [that] results in greater ease of navigation and a more positive attitude towards the site”.
Look to incumbents
The language challenges that LendingClub and Prosper will face are ultimately the same challenges that global financial institutions have been facing for years. Dave Robertson, managing director at financial consulting firm Novantas, sees the the finance industry coping with language difficulties through the multiple communication platforms they use to message their clients. Similarly, giving customers a seamless digital experience is also a challenge when you begin to tie in customer service professionals with native language capabilities.
Internal knowledge management programs are also susceptible to language vagaries. “Applying knowledge management structures to complex financial processing is difficult enough in one language,” Robertson explained. “Pulling this off in many languages is extremely hard. Then, on top of that, to understand product usability, mining this information across multiple languages is VERY hard.”
In an email to Tradestreaming, Robertson gives a stamp of approval to certain banks’ cross-border communication efforts. Citi, for example, has developed a robust infrastructure for local internal communications within a larger English-language system, while Bank of America receives top points for successfully marrying knowledge management systems to multiple languages. Ultimately, though, these language problems are pervasive, and should not be written off as unimportant or inconsequential.
Marketplace lenders in multilingual countries should really be leading the charge … but aren’t.
Marketplace lenders based in multilingual countries could have been a perfect case study for how marketplace lending gets multilingual right. Unfortunately, marketplace lending in multilingual countries such as Canada or China (fun fact: home of 297 thriving languages) is conducted in one language: in Canada, Lending Loop for SMBs is in English, and in China, Lu.com (aka “we just raised $485 million in Series A funding”) is in Simplified Chinese, a written form of Mandarin. While it would be ridiculous to expect Lu.com to have 297 versions of their platform, you could imagine Lending Loop having seamlessly integrated French into their system, in the off-chance that people in Quebec need help getting their small or medium business off the ground.
It doesn’t seem like the French version of Lending Loop will be a priority anytime soon, though – the only Canadian marketplace lender has had to put their P2P activities on hold while they work out whether they’re in compliance with Canadian regulation.
Marketplaces can go far, linguistically speaking
Marketplace lenders hold the upper hand over incumbents when it comes to tackling language barriers – marketplace lenders are new to the financial scene, which means they have less entrenched legacy systems and ingrained business practices to prevent them from going after multilingual platforms. Because they typically excel in technology, marketplace lenders are also better equipped to partner with other tech providers – think emerging translationtech – to solve cross-border miscommunications.
The internet has been a major catalyst for globalization, and it would be naive to imagine that marketplace lenders will forever be content to remain in their local marketplaces. At some point, regional regulations will catch up with globalization trends. Until that point, marketplace lenders can start to talk about how multilingual financial systems work and how they can be done better – after all, isn’t language the original P2P?