Mark Miller
Mark Miller is Associate Director of Insights for Payments with Mintel Comperemedia. He focuses on credit cards, lending products, and the general financial services landscape.

LendIt Fintech 2019 is the world’s largest conference dedicated to financial services. The day began with a keynote featuring two CEOs – Roger Hochschild of Discover and Douglas Merrill of ZestFinance discussing their recent partnership and how large financial institutions can successfully leverage the expertise of fintechs to improve products and services.

Discover is using ZestFinance’s AI and machine-learning software to better assess the creditworthiness of potential customers, but as Hochschild conceded, these capabilities ultimately “will transform every part of the business.” As for traditional credit scores, both leaders agreed that they will continue to exist and play an integral role in credit, but Merrill emphasized that the components of the score will change over time.

Point-of-sale financing

The second keynote was from Affirm‘s CEO and founder, Max Levchin. Affirm offers point-of-sale installment loans, some with 0% APR, and recently announced a partnership with Walmart. Levchin sees Affirm as an “antidote” to predatory loans and is optimistic that traditional practices of deferred interest, heavy reliance on fees, and the ability to refinance debt are being replaced with transparency, a lack of fees, and an overall customer-centric approach.

The growth of point-of-sale installment financing has been a hot topic, with competitors like Klarna and AfterPay gaining momentum, and traditional banks like Chase and Citi releasing hybrid products similar to Plan It by American Express. Additionally, Canadian provider Financeit announced its expansion into the US market.

One of the goals of machine learning and point-of-sale financing is to expand affordable credit and contribute to financial betterment.

One of the goals of machine learning and point-of-sale financing is to expand affordable credit and contribute to financial betterment. These ambitions were also echoed during numerous banking and lending presentations.

The future of financial health

In a panel on bank accounts of the future, Deep Varma of Varo, Nicolas Kopp of N26, and Andrei Cherny of Aspiration emphasized the importance of designing products with the customer top of mind. N26, a German online bank entering the US market, approaches financial products like a consumer goods company would. Varo aims to introduce a true emotional connection to banking relationships. Aspiration wants to counter the lack of “humanity” in banking by offering a “fossil fuel-free” product and extra rewards when shopping at retailers “with a conscious,” donating earnings to charities instead of lobbyists and letting customers choose fee amounts.

Brandon Krieg from Stash and Steven Streit from Green Dot also sat down to talk about their partnership and the launch of Stash Cash. Building on the objective of the core Stash product to open up investing to the middle class, the Cash product lets customers earn stock when making debit purchases. There are also no fees, giving customers more money to “stash” away into an investment account.

Machine learning for clear options

On the lending side, Adrian Nazari of Credit Sesame explained how they use machine learning to understand how people can improve their credit and use that knowledge to make experience-based recommendations. Similarly, Ron Stewart from Transunion described how their credit simulator can show how specific actions would impact a credit score, and provide advice on which of those actions a customer should take.

The machine learning panel also consisted of Jared Kaplan from OppLoans, an online alternative to payday loans for individuals with poor credit. Their approach is to help people find the best lending option (even if it comes from a competitor) and ultimately build their credit so they can graduate to better, prime products.

The idea of helping customers to the point of losing them was a sentiment also expressed earlier in the day by Ken Rees of Elevate, another online lender offering payday alternative loans. Rees shared the stage with Adam Granoff from MasterCard to highlight the Today credit card, which is similarly aimed at those with poor credit.

Stay tuned for day two updates and a summary of key themes!