Business Development
2023-10-16
State of Consumer Lending
Credit Marketing Challenges
The credit market landscape is facing a surge in challenges due to the rapid rise of inflation and higher interest rates– impacting businesses and consumers alike. In response, the Federal Reserve has tightened policies to combat inflation: increasing the cost of borrowing and constricting issuer cash flow. This means that customers need help accessing credit at competitive rates.
To make matters more challenging for lenders, consumer preferences are shifting away from traditional forms of borrowing, gravitating to alternative forms that offer more flexible repayment options, lower interest rates, or non-traditional financial products. With more competition in the market, lenders must differentiate themselves by providing alternative products or services to remain competitive - this requires them to invest resources in developing innovative strategies tailored towards consumer needs, while staying within regulatory constraints.
The personal lending landscape
Personal lending has risen in recent years, and 2023 is no exception. New data shows that, as of the second quarter of 2023, Americans owe $232 billion in personal loan debt, a 3.1% quarter-over-quarter jump and a 21.5% increase from the previous year. The number of Americans with a personal loan has also grown 8.1% year-over-year to 22.7 million people.
Personal loans currently make up 1.4% of outstanding consumer debt and 4.9% of non-housing consumer debt—a much lower proportion than credit card debt, which accounts for 6.0%. This suggests that despite its rapid growth, there is still plenty of room for personal lending to expand. With bank deposits down 4.8% since the start of the year, more individuals will likely turn to personal loans of to pay bills and reduce their other debt obligations.
Unfortunately, there are signs that not all borrowers are managing their loans responsibly. The delinquency rate (60 days or more past due) for personal loans increased from 3.37% in the previous year to 3.62%, indicating an uptick in borrowers struggling with repayment obligations on their loans. This could present challenges for lenders looking to effectively manage credit risk while offering competitive products and services that meet borrower needs going forward into 2023 and beyond.
Personal loan growth returns after dropping early in pandemic
Lenders have adjusted their risk assessments and underwriting criteria as the personal loan market recovers from the pandemic. With more Americans taking out personal loans, lenders are placing a greater emphasis on borrowers' creditworthiness and financial health. Given the current macroeconomic environment, this shift has led to a broader range of consumers seeking loans as well as encouraging lenders to place more importance on factors such as income verification and debt-to-income ratios.
At the same time, lenders increasingly use technology to analyze consumer data, such as spending patterns and payment history. With student loan payments resuming, 96% of student loan borrowers are looking for ways to change their spending habits. This allows them to better understand borrowers' needs, tailor products accordingly, and offer them products at the right time in their financial journey. For instance, some lenders now offer their downturned customers alternative offers, or refinancing options based on their unique financial situation. These changes can help ensure that customers aren't saddled with unsustainable debt burdens, overly restrictive repayment terms, or lack of accessibility given their economic situation.
Looking Ahead
Various factors will shape the future of consumer lending, specifically how lenders meet customers where they are in their financial journey. As the industry evolves, lenders must keep pace with technological advancements and develop personalized services that meet their customers' needs.
To remain competitive, lenders will need to focus on developing innovative digital platforms that offer secure and frictionless user experiences. Using new channels outside traditional methods of search and social media can help distinguish a lender’s offering in a crowded ecosystem. It is also essential for lenders to consider their risk management strategies as they expand their operations into new markets or segments. This includes diversifying their portfolios across different loan sizes and issuing risk-based pricing tailored for each customer segment.
Finally, lenders must strive towards creating an inclusive consumer lending ecosystem where borrowers have equitable access to capital regardless of their financial background or credit history. By implementing innovative technologies such as machine learning and AI-driven decision-making tools and incorporating third party offerings into their ecosystem, lenders can create an inclusive environment that nurtures growth in the industry while ensuring they address the needs of all of their customers.
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MoneyLion
MoneyLion Wins “Best Financial Literacy Tool” and “Best API” at Benzinga’s 2022 Global Fintech Awards
MoneyLion’s consumer and enterprise businesses were recognized as winners of Benzinga’s 2022 Global Fintech Awards at this year’s Fintech Deal Day
New York, December 14, 2022-- MoneyLion Inc. (“MoneyLion”) (NYSE: ML), the go-to destination for personalized financial content, products and advice, is proud to announce that it has been named “Best Financial Literacy Tool” at Benzinga’s 2022 Global Fintech Awards. MoneyLion’s enterprise business, Even Financial, was also named as the winner for “Best API.”
MoneyLion and Even Financial were honored alongside other top Fintechs, banks, research companies and more. MoneyLion’s consumer business continues to push financial literacy through innovative and personalized content. With the MoneyLion app, users can view personalized financial content in short-form video format and receive personalized financial product recommendations such as loans, insurance and investing. As MoneyLion’s enterprise offering, Even Financial digitally connects and matches consumers with real-time personalized product recommendations from banks, insurance carriers, and Fintech companies on mobile apps, websites and other digital touchpoints through its financial product search engine and Embedded Finance Marketplace technology. This technology powers both the MoneyLion Marketplace, in the MoneyLion app, as well as more than 1,000 enterprise partners.
“We’re thrilled MoneyLion’s consumer and enterprise businesses were recognized by Benzinga,” said Dee Choubey, Co-Founder and CEO of MoneyLion. “Both awards showcase MoneyLion’s every time you money approach to helping our customers. The financial literacy gap is a huge problem for millions of Americans and we remain committed to reducing its effects through engaging, informative content and key partnerships designed to bring an elevated educational experience to all.”
These awards follow the October announcement of MoneyLion University, where MoneyLion launched its latest initiative aimed at closing the gap in money and financial education across the United States.
“We could not be more pleased with Benzinga’s recognition of our company’s API technology,” stated Phill Rosen, CEO and Founder of Even Financial. “Our technology natively integrates real-time credit decisions and product recommendations from the industry’s largest network of connected financial services providers, offering access and choice to consumers searching for financial products. Our elegant Embedded Finance Marketplace, API and search engine enable any company to add trusted, personalized financial products and services to their business, reaching people when and where they need it.”
Even Financial has been named a listmaker for the Benzinga Global Fintech Awards for the last two years and was a previous award winner. In 2021, Even was selected as a listmaker for Best API and, in 2020, selected as a listmaker for both Best API and Best API Platform. In 2019, Even was awarded the Benzinga Rocky Award.
The annual Benzinga Global Fintech Awards take pride in recognizing and honoring the companies and individuals who are propelling the Fintech and financial services industry forward with the most impressive technology advancements and innovations. A panel of industry experts from a wide range of companies reviewed and judged the nominations. Winners were announced at Benzinga’s Fintech Deal Day on December 8, 2022, where MoneyLion’s Chief Customer Officer Cynthia Kleinbaum spoke on the panel, Expert Growth Hacks For Reaching Underserved Markets.
About MoneyLion MoneyLion is the go-to destination for personalized financial content, products and advice. MoneyLion’s mission is to rewire the financial system to positively change the path of every hard-working American. MoneyLion uses its proprietary data advantage and technology to empower its customers. MoneyLion engages and educates its customers with daily, hyper-personalized money-related and money-adjacent content that is delivered through each customer’s own content feed. MoneyLion provides its customers a full suite of financial and non-financial solutions, bundling its proprietary, low-cost financial products with products that are offered through its marketplace technology and network affiliate partners. MoneyLion also leverages its distinct data, technology, and network advantages to deliver leading embedded finance and marketplace solutions for enterprise customers. Since its founding in 2013, MoneyLion has empowered millions of Americans to take control of their finances and live their best financial life, every day.
For more information about the company, visit https://www.moneylion.com/ and https://www.evenfinancial.com. For investor information and updates, visit investors.moneylion.com and follow @MoneyLionIR on Twitter.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221214006032/en/
MoneyLion Communications pr@moneylion.com
Caliber Corporate Advisers moneylion@calibercorporateadvisers.com
Even Financial media@evenfinancial.com
Built In
Even Named A Built In “2023 Best Places to Work”
New York, Jan. 11, 2023 -- Even Financial ("Even"), an independent subsidiary of MoneyLion Inc. (NYSE: ML), and a leading embedded finance marketplace platform, is proud to announce that it was honored in Built In’s “2023 Best Places To Work” Awards. Specifically, Even earned a place on the Hybrid Best Places to Work in New York.
The Best Places to Work Awards, now in its fifth year, honors companies across numerous categories, sizes, remote-first employers as well as in person and hybrid working companies across the U.S.
Built In determines the winners of Best Places to Work based on an algorithm, using company data about compensation and benefits, and also weighs criteria like remote and flexible work opportunities, as well as other people-first cultural offerings.
This announcement follows Even’s recent win at the Benzinga Global Fintech Awards for “Best API.”
About Even Financial
Even is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE: ML). MoneyLion is a leading digital financial services and lifestyle content platform serving both consumer and enterprise customers. As part of MoneyLion’s enterprise offering, Even digitally connects and matches consumers with real-time, personalized financial product recommendations from banks, insurance carriers, and fintech companies on mobile apps, websites, and other digital touchpoints through its marketplace technology. Even's infrastructure leverages machine learning and advanced data science to solve a significant pain point in financial services customer acquisition, seamlessly bridging financial services providers (such as SoFi) and channel partners (such as TransUnion) via its industry-leading API and embedded finance marketplaces. Even enables any company to add financial products to its business, with full compliance and security at scale. Even was named one of "America's Best Startup Employers'' by Forbes for 2022 and was named to the 2021 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world. Learn more at www.evenfinancial.com and investors.moneylion.com.