AI Helps FinTech Firms Reach More Borrowers
Fintech lenders including Pentadata Inc., OppFi Inc. and LoanSnap are helping traditionally underserved borrowers get loans. These companies feed a wider range of data and use AI to determine credit eligibility, giving more people access to the credit market. It has been crucial for these fintechs to be able to have access to these alternative data sources.
Fintech lenders address the challenges of the one out of six Americans considered “Credit Invisibles,” who are most likely Black, Hispanic and/or people living in low-income neighborhoods. Coming up with innovative ways to enable credit access for qualified individuals currently shut out of the credit market is good for all involved. The use of alternative sources of data, rather than relying on traditional credit scores, removes certain roadblocks the underserved consumers may encounter in their financial journey.
Truist Buys Gamified FinTech Long Game
The seventh-largest bank in the nation, Truist, purchased a mobile app—Long Game—that rewards users for saving money. Launched in 2015, Long Game had 12 bank and credit union customers prior to the acquisition. The average user saves $60 per month.
The investment in gamification is intended to increase Truist’s market share. Interactive games are popular, particularly among younger consumers who’ve played them most of their lives. By incenting positive financial behaviors, Long Game provides a sticky experience that strengthens existing relationships—and attracts new customers too.
Square Continues To Integrate Afterpay
Millions of in-person sellers in the U.S. and Australia that use point-of-sale software Square can now offer shoppers the option to use Afterpay. To use the buy-now-pay-later app in person, buyers tap to pay using a mobile wallet loaded with their virtual Afterpay card—and payment is made with four interest-free installments over time. Sellers get full earnings immediately.
It took just three months after first bringing Afterpay into the Square realm to integrate the two technologies. Look for an increase in transactions and transaction value, and the growth of merchant categories participating as a result. Shoppers expect to make purchases with their preferred method of payment.
Americans Are Spending Like It’s 2019
After a two-year decline, consumers in America are spending at levels that rival those of 2019, right before the pandemic hit.
Gym memberships, child care, travel, meals out, concerts—demand is high. Americans are spending money on experiences at rates close to or above pre-Covid times. At the same time, companies that flourished during the pandemic boom, like Peloton and Instacart, are taking a hit. Pent-up demand, vaccinations and a milder form of the virus drives the trend.
EPISODE 114: Considering the Future of Financial Data