While most of the fintech world has been focused on small businesses since the onset of the crisis there is also significant challenges happening in the consumer lending market. On Friday of last week we hosted a virtual panel on How Consumer Lenders are Responding to the Crisis to get a better understanding as to what these lenders are facing.
The panel featured Anand Devendran, GM – Personal Loans, Credit Karma, Todd Nelson, SVP Strategic Partnerships, Lightstream, Tom Burnside, CEO & Co-Founder, LendingPoint, Abhinav Anand, Head of Consumer Lending, Marcus by Goldman Sachs with LendIt’s Co-Founder & Chairman Peter Renton moderating.
The panel covered a few key themes starting with how lenders are helping borrowers that are no longer working due to being furloughed or laid off. All the lenders have increased their capacity to handle the large increase in call volumes and most have also implemented a self service option so borrowers can set up deferments. Some like Credit Karma have gone so far as setting up a relief roadmap to provide borrowers with the best information so they can make the most informed decision possible.
Adjusting underwriting criteria was a central theme as lenders have tightened up on who they lend to, particularly if they were not focused on the prime and super prime borrowers. Unlike on the small business side consumer lenders are still open for business and LendingPoint has even seen an uptick in their home improvement lending business with so many people at home. Consumers have also been worried about how their credit reports will look after the crisis ends, most lenders are not reporting non-payments and the new legislation calls for a change in credit reporting during the current crisis.
Marketing budgets have tightened across the board with lenders wanting to keep costs down and the increased risk there is in the market due to the growing unemployment numbers. Banks have also seen a big drop off in branch traffic which is where they acquire a good amount of leads through various marketing strategies.
The panel featured one of our most engaged audiences ever with about 75 questions being asked during the one hour session. The group took some key questions related to how their businesses are changing so rapidly. Fraud concerns are heightened at a time like this and lenders need to ensure they are more diligent than ever before. Income verification is also one of the toughest issues lenders are facing with so many companies firing employees or temporarily letting people go until some semblance of normal returns.
The session also covered thoughts on direct mail as a customer acquisition channel, manual review in underwriting, increased use of automation and much, much more.
If you’re interested in listening to the entire webinar you can access the recording here.
More from LendIt Fintech
Our next panel entitled How Increased Engagement Will Impact Fintechs and Digital Banks will take place on Tuesday April 28th. With the onset of the current crisis fintechs, especially digital banks, will have the light shone on them for the first time during bad economic times. Customers are unable to go to bank branches and will be looking for the best, most cost effective tools to help them get to the other side. Join Niko Karouvnis, Product Lead at Plaid, Colin Walsh, CEO & Founder of Varo Money, Brandon Krieg, Co-Founder & CEO of STASH with moderator Bo Brustkern, Co-Founder & CEO of LendIt Fintech.