During 2008-09 many banks that offered a personal loan product to consumers pulled back from the market, and into that void stepped fintech consumer finance companies. The banks sat on the sidelines of this market for years and as they watched the growth within the space, many have decided to reenter the market. Personal loan products are primarily used by consumers to consolidate high interest credit card debt into a lower interest loan product. These consumer-friendly loans are also used to finance elective medical procedures or make large ticket purchases, but upwards of 85% of all loans in the space are issued for debt consolidation. The market for consumer finance is now divided between traditional players looking to re-enter and compete alongside fintechs that established themselves during the period when banks pulled back. The competition in this market is fierce and consumer finance companies are focused on
reinventing and improving the customer experience for onboarding and underwriting their loans. In order to stay competitive, fast decisioning utilizing multiple data sources and reduction of latency inherent in the application process is a major focus. Lenders need to be able to develop new models and deploy them quickly as well as make changes to their decisioning strategies rapidly in response to changes in the marketplace. Lenders also need to be able to evaluate new and emerging data sources alongside traditional credit bureaus and to integrate alternative data sources into their decision strategy quickly and easily.
Made with FlippingBook - professional solution for displaying marketing and sales documents online