Customer acquisition cost is a central tenant to all lenders; in his keynote from LendIt USA 2016, Ken Lin of Credit Karma focused on trends in customer acquisition and ideas on how to improve innovation.
The three main themes he touched on were certainty, transparency and simplicity.
Certainty - 70% to 80% of loan applications are denied, this gives the consumer uncertainty when applying for a loan. Using underwriting to offer a unique loan to the customer can better help them to understand the right loan for them.
Transparency - There are over 6,500 lenders who offer tens of thousands of loan products, this can overload the customer and cloud their understanding. Giving borrowers more insight into their credit profile can help the consumer and force the lenders to differentiate themselves.
Simplicity - On average loan applications still consist of 25 to 50 questions, some can even go up to 100. By making the loan application simpler, consumers will spend less time applying for a loan and have more time to understand and explore the right loan for them.
A few trends and ideas he touched on were the move to mobile loan applications and new innovation in technology. 70% of Credit Karma traffic is driven through mobile and the younger generations use mobile almost 80% of the time. Making sure you give them the proper mobile experience is key.
Additionally, new innovations in technology are helping to drive down costs, including biometric technology such as a fingerprint to help identify who the borrower is and pre populating their information to cut down on loan times.
Check out the full video interview here:
Competition in the personal loan market has become quite heated since the financial crisis; banks of all sizes, and credit unions now have to compete with the likes of emerging fintech companies who have originated billions in loans; at LendIt USA 2017 Ken Lin of Credit Karma did a keynote presentation on some of the keys to success in this highly competitive market; helping to understand the trends of the last few years (higher defaults and increased APRs) can first give you a better understanding of current market conditions; the keys to success to overcome and reverse those trends are to continuously refine your underwriting models, solve real customer pain points and find a way to win on mobile; keeping ahead of the curve is not easy with so many players but making improvements to certain areas could go a long way. Source