How Amazon changed everything, and what that means for the business of finance
We talked recently with Franck Fatras, LendingPoint’s President and COO about the ever-increasing velocity of change.
“Huge changes that used to take 100 years — think of the transition from the early phonograph to streaming music — now happen in years, months, days.
“People are now users. The digital age has shifted photos, music, gaming, getting news updates and TV shows to savvy devices of our choosing. Why should finance be any different?”
Franck Fatras on the velocity of change.
How has Fintech and the digital age changed access to credit for consumers?
“I believe everything changed on July 5th, 1994. That’s when Jeff Bezos founded Amazon. What we came to know as the internet started much earlier in the 1970s, but was not widely accepted or global until the river ran through it. Amazon does 4.5 million transactions every day on average. If you think about it, stores that used to be household names couldn’t adapt to the next wave – digital. Examples of this are Sears, Kmart, and Toys R Us. Amazon took them out in one quick click of a button and an easy to operate platform. Look around, and you’ll see that in this new age, things have changed. Our phones are our main forms of communications, kids play video games over headsets instead of hanging out at the malls and being social, and the previously largest computer company (IBM) no longer makes computers. Finance and access to credit are going the same direction.
“Amazon was the first to show that the old rules were changing. Rapidly.
“There are two common denominators. Access to data and communication. That’s what the digital age is all about. Over the past 20 years, people increasingly are showing their preference for digital access. Tablets, computers, and smartphones are their preferred way to conduct transactions in business. The way this works is through observations made over time, the information you need and decisions that are made based on your consumer’s behaviors wants and needs. They are used to having instantaneous results so we must accommodate this in the lending industry as well. People want instant access to credit, and we want to give it to them.
“Decisioning in three days is no longer tolerated among consumers who are accustomed to instant gratification. From a finance company’s point of view, we had to provide people with access to financing options without the burden of communicating with human beings, tracking down tons of paperwork or having to be home to do it. Our process can be done completely digitally end to end without any human interaction. It’s a process that can be done on the move at your convenience and can be started within seconds – that’s how we’rechanging access to credit in the Fintech industry.
“We have to compete on a much quicker and broader scale to land the sale. For example, a bank branch in a prime location could maybe handle 1,000 people a day whereas on the web we can service that many people in minutes. Being online provides scalability in ways that we could not have imagined even ten years ago.
“With this new and convenient fashion of accessing credit, comes higher risk. Following the digital trend of not conducting business in person makes fraud more rampant, so it’s necessary to take precautionary measures to combat that.
“The functionality of our platform and access to information we gather continues to differentiate us from the rest. To provide a better customer journey and experience, we must constantly take note and evolve into what the customer wants and needs to help achieve their financial goals without the traditional hassle. There’s a lot of information available to everyone working in the fintech space, but it’s all about how quickly you’re able to process your decision, process the data, and how you use the data to better service your customer during their entire journey – not just during the acquisition.
“Fintech has thoroughly revolutionized access to credit for consumers around the globe. And fintech is part of a larger wave of change that digital is leading. Think about it – The largest hotel chain, Airbnb, doesn’t have any hotels. The largest transportation company, Uber, doesn’t have any taxis. The largest shopping center, Amazon, doesn’t have any stores (though they are now experimenting with new approaches to brick & mortar) and the largest music store, iTunes, is completely digital. This is how access to credit has changed for the consumers all over the world. Digital migration has placed access to credit right at our fingertips.”