Here’s One Way FinTech Will Win the Banking War
One of the best ways to succeed in business is to find a section of the market that is being overlooked and offer your services. With less competition and the loyalty that will come from customers happy to finally have their needs acknowledged, you can create a solid base for your company (then, if you choose, expand from there into larger markets).
FinTech understands this concept and is using it to its advantage. By offering financial services to sections of the population that tend to be ignored by the Big Banks and have to resort to the unscrupulous payday loan businesses, these companies are offering needed services and contributing to FinTech’s growing dominance of the financial sector, not to mention doing a great service for a large section of the population.
LendUp is one such service. Stating that their aim is “to provide anyone with a path to better financial health,” the company offers online loans and doesn’t require a good credit score to obtain financing. As well, they offer free education courses (presented through videos) that aim to teach (potential) customers about the art of saving and building credit. The company has been called one of the most innovative companies in personal finance and seeks to build a company that is straightforward and efficient about its fees, a major plus for people not well versed in the financial market.
Another company seeking to serve this section of the market is Oportun. Since 2006 they have been serving what they call “credit invisibles,” using their own data analytics to score the “unscoreables” and offering loans—ranging from $300-$7000—to these (mostly) low-to-moderate income customers. Offering realistic payment terms and affordable loans, they have helped more than 770, 000 customers and have saved them approximately $345 million in interest and fees.
Although it is a new entrant in the marketplace, FinTech’s ability to offer products and services that better the lives of so many different sections of the world’s population is a clear indication that it is a powerhouse to watch. Soon a large percentage of the world will be loyal FinTech customers and the Big Bank monopoly will be a thing of the past.