The landscape
For a fintech lender, credit is a capital-markets product. Every policy, model and pricing change has to work for the borrower, the P&L and the funding partner who will diligence it. Our founder has been Chief Credit Officer at three fintech lenders, and the best results came from managing credit, fraud, acquisition and funding as one system.
Where we help most
- Credit box, pricing and model strategy for growth
- Fraud automation and acquisition economics
- Readiness for bank partners, forward flow, warehouse and ABS funding
- Fractional Chief Credit Officer leadership
Use cases for fintech lenders
Lending and credit risk
Credit policy design and evaluation
Design a credit box, or test an existing one: who you approve, at what limit, with what verification, and how the application funnel and offers shape who applies. We measure which rules actually rank-order risk and what each change would do to approvals, losses and return.
Pricing and unit economics
Set prices from loss-adjusted returns, not a competitor's rate card. Risk-based pricing, price response and adverse selection, channel and acquisition cost, and return by segment.
Credit model strategy
Decide whether to build, buy or replace a credit model, and make sure it changes decisions. Custom versus bureau and vendor scores, model development oversight, deployment into policy, and performance monitoring.
Fraud strategy
Stop application and first-party fraud without blocking good customers. Real-time decision gates, verification design, and the right balance of automation and manual review.
New product launch
Launch a credit product without its own performance history. Proxy data, launch credit box and limits, test-and-learn design, early-warning triggers and launch economics.
Collections and recovery strategy
Reduce losses after the loan is booked. Roll-rate segmentation, treatment and channel strategy, and champion/challenger testing.
Competitive and market analysis
Know what competitors are doing from what they have to disclose. Public filings, ABS trust performance, call reports, BDC marks and changes in lenders' published credit criteria.
Capital markets and partnerships
Bank–fintech partnerships
Design or evaluate a partnership between a bank or credit union and a fintech originator. Our founder has been on both sides: buying fintech loans at a bank, and restructuring bank partnerships as the fintech.
Forward-flow deal design and evaluation
Structure or evaluate an agreement to sell or buy loans on an ongoing basis. Eligibility criteria, pricing mechanics, concentration limits, performance triggers, servicing terms and reporting.
Funding readiness: warehouse and ABS
Get a lender ready for warehouse lenders and securitization investors, or help an investor read a lender's data. Vintage and static-pool analysis, trigger headroom, data tapes and investor reporting.
Case studies
Rebuilding credit, pricing and modeling to support 4x origination growth
A BlackRock- and TruStage-backed personal lender with $6B+ originated since inception, funded through credit union and institutional partners, needed credit infrastructure built for growth and investor scrutiny.
Tripling profit through fraud automation, acquisition economics and cheaper funding
A mission-driven lender serving more than a million underserved customers needed to scale profitably while handling a million applications a month.
Restructuring bank partnerships and building a valuation business for PE buyers
A Carlyle-backed student lending platform needed better unit economics from its bank partnerships, and saw an opening as banks sold student loan portfolios to private equity.
Running risk-based pricing for a $50B credit card portfolio
Overseeing the risk-based pricing program for a $50B card portfolio, and the segmentation and valuation behind balance-build strategy for 16 million subprime accounts.
Related analysis
What SoFi's fair-value marks say about prime personal loan pricing
SoFi carries its personal loan book at fair value, one of the few public windows into how prime unsecured paper is priced. Q3 shows strong growth, lower losses, and a discount rate that rose less than rates did.
Are banks outsourcing lending to fintechs?
During the pandemic, the fastest-growing loan category at large US banks was loans to non-bank financial institutions, which mostly means warehouse lines to fintechs. Banks increasingly grow in assets where they don't own the customer.
The dilemma in lending
The best credit comes from borrowers who don't need the money. That's an oxymoron, and yet true. The opportunity is in borrowers with an urgent need today and strong income prospects tomorrow.
Have a credit question with money behind it?
A portfolio to value, a credit box to rethink, a funding partner to convince. Send a short note and we'll reply within one business day.
Or connect on LinkedIn.