What We Learned From LendIt 2018Jon Steiert
Last month, a group of team members flew out to San Francisco to attend the Fintech conference LendIt. For three days our team listened to some of the smartest and most innovative minds in the financial technology space and absorbed all of the insights and knowledge they had to offer.
Like any conference, it was a whirlwind and it’s taken us time to unpack all of our learnings. After sharing our new knowledge with our Fast Capital 360 teams, we’ve finally found the three observations we’d like to share with you.
Andy Rachleff of Wealthfront on Finding Product Market Fit in Fintech
Rachleff opened his interview with an admonishment of the financial technology industry as a whole. He described how disappointed he was in how few Fintech companies actually care about the ‘tech’ part of their product.
This is troubling; if you actually have desires to be a great enterprise, in a technology field, Rachleff explained, you need to be a great technology company. His company, Wealthfront, employs over 160 people, 90 of which are computer engineers in one form or another.
During the interview, one of the fascinating questions revolved around human advisors (something Fast Capital 360 is a big proponent of). Wealthfront doesn’t have any human advisors as they’ve found that their core customer base is uninterested in going through a ‘gatekeeper’.
“Our clients tell us, ‘we pay you not to talk to us’, which is a really, really strange thing”.
While Fast Capital 360’s programs differ from Wealthfront’s, the lessons that can be learned from them is universal. They’ve had plenty of opportunities to expand beyond their current product, but doing so would alienate much of their current product market fit. Instead of casting aside their current customer base for bigger fish, they build trust by being a trustworthy resource for their audience.
“We’re trying to build the ideal service for an audience that’s very, very different (from what we’re used to traditionally).”
It will be interesting to see how their current client base’s preferences evolve (will they need to add human advisors, for example?) but for the time being, they are serving their customers in a way that suits them. What could be better?
What Scott Sanborn of LendingClub Thinks America Can Do About Our Financial Health Crisis
Scott opened his keynote with some eye-popping statistics.
57% of the country – that’s 138 million of us – is considered to be financially unwell.
This includes the basic savings and insurance that is required to be considered ‘safe’.
With the economy growing and low unemployment, what seems to be the problem?
In short, wages are low and everything else becoming more and more expensive.
Since 2000, Median Household Income has only increased 1% while housing, education, and health care premiums have all grown well over 30%.
“With stagnant incomes and rising expenses, it’s no surprise that American’s savings rates are plummeting’, Sanborn shared.
Of course, all of this means Americans are turning to debt at an alarming rate. 45% of Americans with debt are spending up to half of the income handling the debt they’ve taken on, just to get by.
While 138 million Americans are considered to be financially unwell, 175 million citizens are highly unsatisfied with their present financial condition. The population of those who are deemed to be financially unwell have amassed a $37 trillion (yes, that’s trillion with a T) retirement savings gap.
So what can be done, Scott?
“We can solve’, Sanborn proposed, ‘the cost of debt, access to credit, and the behavior around debt.”
Part of Sanborn’s solution involves putting the customer’s financial success first. A novel concept, right?
Sanborn’s customer-first proposal puts financial inclusion, regulatory innovation, and customer alignment at the forefront.
We here at Fast Capital 360 have long discussed, transparently, that our customer’s success is our success. Without them being successful after partnering with us, how could we expect anyone to recommend us? Our stake in a client’s success is minimal, on paper, but major in terms of our collective future.
Sanborn’s plan deals with each of the three pillars in the embedded video right around the ten-minute mark. We highly encourage you to watch.
Online Lending 2.0 and What It Means to Your Business
Renaud Laplanche is the final keynote speaker whose message we’d like to share with you.
As the CEO of Upgrade, Laplanche and his company help consumers understand and unlock their credit potential to obtain more affordable credit. They accomplish this by delivering a better borrower experience and value through a modern website offering multiple products.
One of the coolest products they offer is a credit score simulator. Their simulator allows users to simulate what kind of impact specific actions, like a change of life event or borrowing money, would have on their credit scores.
Denials are part of the game when it comes to securing a loan, but Upgrade goes a few steps further. If an individual is denied, Upgrade takes the time to explain exactly why the denial occurred and provides an action plan for how to reach a place where an approval could be granted.
At the same time, when a user is approved for a loan Upgrade applies the same types of ongoing learnings and monitoring for denials. All of these services lead to the company becoming a trusted resource for applicants and better terms for those with improved credit.
While Upgrade primarily focuses on consumers, there are plenty of take-aways here for businesses of all shapes and sizes.
By educating your consumer, you’re allowing yourself to become the authority figure, making your company the top property to consult and trust for all of their needs. Every business, regardless of industry, can learn from Upgrade’s utilitarian approach.
An industry conference like this is great for us to meet new people, potential partners, and get a true sense of the pulse of our own industry. We are always moving and changing our products to be able to meet the needs of our customers and this conference only proves this point.
How many of these lessons from LendIt 2018 can be applied to your business?