lending in times of uncertainty | risk revealed...built to help customer navigate through...
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Communicating to Customers
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Communications: Ensure that you’re a resource for consumersFOCUSED SUPPORT: SoFi has created a hub that is dedicated to helping customer navigate through this difficult environment
EMPATHY: LendingClub’s Resource Center was built to help customer navigate through
challenging times stating, “We want you, our members, to know we are doing everything we
can to try and provide you with some relief.”
Communications: Educate those who need help the most
We are focusing our resources on the number one priority –looking after people.Brian Moynihan, CEO of Bank of America
DIGITAL EDUCATION: Bank of America has put together an inviting and thorough resource center for customers. This includes details on support programs, informational videos, and various podcasts.
“ ”
Communications: Inform on how you’re supporting them
PROACTIVE: Customers need to know in the first place that you have resources available for them. SoFi sent customers an email about their “Get Your Money Right” commitment for student loans, while Avant sent their customers an email about their “Readiness Plans” support
Communications: Be clear during this difficult time
CLARITY: Prosper ensures it explains the terms of the three months deferment clearly, but could offer more to customers by providing better information about how to eventually pay off the loan on time
Communications: Personalize for impact
EMOTIVE: LendingClubpersonalizes their marketing messages and makes new lending offers based on what they currently know about a customer by showing how customers can feel confident and enabled
A Changing Market: What customers are experiencing
Shop Approvals
FICO March 2020 April 2020760+ 78% 43%720-759 64% 42%680-719 41% 31%<680 38% 10%
Source: Informa Fintech Lending Mystery Shops
The lending market is tightening and loans processes have new requirements
Changes in the Market Trends
9
Current Year Production Last Year Production
Application Units are down 37% below the same week last year but at the same level as last week
National Home Equity Market Production Trend
LendersBenchmark Market Essentials
Application Units as of 4/19/20
Mar
ket P
rodu
ctio
n
-37% YoY
+35% YoY
02/02 02/09 02/16 02/23 03/01 03/08 03/15 03/22 03/29 04/05 04/12 04/19
National Home Equity Market Production Trend
LendersBenchmark Market Essentials
Centralized (Web/Phone) Application Units as of 4/19/20
National Home Equity Market Production Trend
LendersBenchmark Market Essentials
Decentralized (Branch) Application Units as of 4/19/20
Unsecured Personal Lending Production Trend
LendersBenchmark Market Essentials
Application Units as of 4/19/20
Unsecured Personal Loans Production Trend
LendersBenchmark Market Essentials
Centralized (Web/Phone) Application Units as of 4/19/20
Unsecured Personal Loans Production Trend
LendersBenchmark Market Essentials
Decentralized (Branch) Application Units as of 4/19/20
Balancing act between risk and supporting customers
16
In an uncertain environment with unknown long-term outcome
• All lenders are trying to strike the balance between being there for their customers in challenging times and managing the risk of increased future losses
• Many lenders are providing relief for existing borrowers impacted by the pandemic and several have launched loan products to support short term lending needs
• The constraints the lock-down is putting on customers and lenders is impacting procedures around appraisals, verification of employment and income and regulatory requirements around closing procedures
• Lenders are all discussing and reviewing their underwriting guidelines based on the change in the environment
• Some are making adjustments (CLTV, DTI, Credit Score, Amount) and others are even pausing new originations, while other lenders are keeping their guidelines the same
Risk has changed in the last 30 days!
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SIGNAL CAPTURECollecting high fidelity, anonymous behavioral signals from any device, in any language, in real-time
TRANSLATEDigital behavior into actionable insight displayed via our Friction Index Dashboard and returned via real-time API
DETECT ANOMALOUS BEHAVIOROn hard-to-verify identity, income and employment related fields, informing step-up authentication or verification processes
Unlock a new behavioral layer to reveal fraud and risk
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Gain an aggregate view of behaviors related to friction, fraud and risk across populationsSee and understand patterns of anomalous behavior
Loan Details
Gain new visibility into riskAPPLICANT SNAPSHOT STATUS: FUNDED + CONFIRMED FRAUD
The exercise of combining questions and behaviors exposes the intent, ability and state of mind of the
applicant.
● Decision: Minimal Review
● High Number of answer changes - left and came back 7x to change Full Name, Email, and Phone
● Automated entry of SSN
● Showed high levels of hesitation on Loan Information, up to 4.5x that of their typical behavior
● Showed hesitation on Monthly Income and Employer Name
Identity Related Questions
Loan Information
Employment and Income
Initial Application Pages1
PII
PROPRIETARY Limited Distribution Presented by
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