Revolutionizing Access to Capital: TAPP Engine’s 9Squid Private Markets for Credit Unions

TAPP Engine’s 9Squid Private Markets: Setting New Standards in Securitization

TAPP Engine's newly launched platform, 9Squid Private Markets, is poised to transform the landscape of securitization for credit unions and community finance institutions. By integrating cutting-edge AI technology, this initiative aims to provide these institutions with streamlined access to institutional capital, a previously lofty goal due to systemic barriers. This innovative platform is expected to tap into a lucrative market opportunity exceeding $5.8 trillion.

Unlocking Institutional Capital

Located in Quincy, Massachusetts, the 9Squid platform is crafted as a user-friendly space for credit unions and community finance entities of all asset sizes, including community and regional banks. The platform specializes in loan securitization, presenting a more efficient route for these institutions to connect with institutional investors.

Historically, U.S. credit unions have amassed nearly $2.4 trillion in assets, along with more than $1.7 trillion worth of consumer loans, as reported by the National Credit Union Administration (NCUA). On the other hand, community finance institutions contribute an additional $6 trillion in assets and over $4.1 trillion in loans across consumer, small business, and commercial lending sectors, according to figures provided by the Independent Community Bankers of America (ICBA). Yet, despite this scale, cost-related issues and structural complexities have kept these entities from fully engaging with the securitization market.

Overcoming Barriers to Access

Tosin Osunsanya, Founder and CEO of TAPP Engine, stresses that while community institutions play a crucial role in capital formation, many of them have been shut out of securitization due to prohibitive costs and restrictive minimum size thresholds. The introduction of 9Squid aims to dismantle these barriers, thereby facilitating a quicker and more effective route to institutional funding while maintaining cooperative governance practices traditional to credit unions.

Enhanced Decision-Making with AI

One of the standout features of the 9Squid platform lies in its ability to simulate and optimize balance sheet impacts. Credit unions can assess various securitization scenarios prior to execution, allowing them to predict outcomes related to liquidity, capital ratios, earnings, and more. Michael Massey, President of TDECU Holdings, lauds this feature, noting that it grants credit unions a crucial understanding of financial repercussions before engaging in transactions. This level of insight is invaluable and positions securitization as a continuous tool for strategic balance sheet management rather than a rare event.

A New Model for Loan Participation

9Squid offers a systematic alternative to conventional loan participation methods. Rather than relying heavily on bilateral or club-based arrangements which can be resource-intensive, credit unions and community finance institutions can leverage securitization as a reliable means to manage liquidity and growth. The platform facilitates direct distribution to institutional investors, allowing these community entities to streamline their financing processes.

Currently, 9Squid supports securitization across a range of products, including personal loans, auto loans, and home equity lines of credit that comply with regulatory standards. The platform has already attracted interest, with five credit unions in the initial pipeline and plans for broader onboarding in the near future.

Conclusion

The launch of 9Squid Private Markets represents a significant step forward in democratizing access to institutional capital for credit unions and community finance institutions. By effectively leveraging AI-driven technology, TAPP Engine is expanding possibilities for these organizations, ensuring they are equipped with the tools needed for sustained financial growth in an increasingly competitive landscape. For further inquiries or information about partnerships, stakeholders can contact TAPP Engine while exploring the detailed offerings available on their platform.