With the aim of helping those looking to avoid bank loan hurdles or high interest rates of other lenders, AvantCredit, number six on the Forbes 2015 list of America’s most promising companies, is already making huge leaps in the fintech space. Late last year it was reported that the company is one of the UK’s fastest growing marketplace lenders and had provided £100 million in loan since launching in October 2015. As machine learning algorithms are set to boom in the financial sector this year, bobsguide spoke to managing director, Raj Singh, about what to expect for fintech and provide a taste of what he’ll be discussing at Pivotl’s The Future of Fintech event this week.
Could you give a brief explanation of AvantCredit’s role within the fintech industry?
In one sentence, we are a bespoke online consumer lending business with the aim to continually lower the costs and barriers to credit and serve more underserved customers in our chosen target market.
What makes us different is that we use custom technology and enormous amounts of data to tailor credit scoring and lending decisions to a customer’s personal circumstances today, taking a forward-looking responsible view in terms of how we think they’re going to behave, as opposed to just looking at the past. In doing so, we pull thousands of pieces of data on our customers and analyse them, as opposed to just relying on credit bureau checks, to offer tailored loan options.
What is exciting is that our data scientists and engineers are constantly pushing boundaries in terms of how we analyse data to allow us to continually make better and more accurate informed decisions. Fintech is such a rapidly changing and growing space that we can’t afford to be complacent, while of course, recognising that this business is highly regulated and very responsible. We thrive on continual improvements.
Our role is simply to fill the void between the banks and the HCST lenders: this is a huge market and opportunity which we are exploiting.
In which countries do you operate and how do you see fintech being adopted in these countries?
We operate mainly in the US, UK and just launched in Canada. We launched in the UK in 2013 and have very ambitious growth plans for this year. The US market is the most mature but the UK is following fast. Fintech is already established in these markets and Canada is relatively immature but again we see that as an opportunity.
If you have great products and customer experiences, adoption is easy. The challenge is effective marketing and driving consumer awareness which requires considerable commitment and investment.
How do you see the lending business progressing as new tech takes over?
The lending business is going to grow and become more polarised over time and the new challenger banks and legacy financial institutions will partner and use a business like ours to offer great innovative products and services to more and more of their traditional and new customers.
Traditional models will increasingly shrink as they won’t be able to compete or match the service levels and the demands and expectations of consumers. New tech businesses will cover the whole spectrum of financial products and services in the near future all from the convenience of your laptop or mobile - it’s not far off now.
What is the future of fintech?
The industry is 2016 will be another exciting year for fintech, with areas like mobile payments truly taking off and some new mobile banks coming online. I feel that the main challenge for fintech companies in the near future will be how they all differentiate from their competitors. That will be the key test - the successful ones will be the ones that focus and invest in the customer and truly deliver on their promises.
Partnerships and collaborations will be important, as banks and big fintech companies continue to invest in, and partner with new technologies and platforms. As traditional banks look to incorporate more digital services and fintech companies look to expand their credit products, there is a great opportunity for both ends of the spectrum to work together.