Fintechs: Build Momentum with Credit Education

Published: July 8, 2019 by Joe Talbott

Fintechs brought the digital revolution to the financial world with innovative business models that make lending, payments, and investing more accessible for everyday people.

After pushing the limits of digital innovation, fintechs still face the challenge of finding new customers while continuing to engage and retain loyal ones. For fintechs, success will depend on the acquisition of new customers by offering personalized credit education products and the ability to cross-sell bundled offerings at key points during the customer life cycle.

Convert Millennials: Appeal Directly to Digital Learners

Navigating the ins and outs of credit and financial health can be complex for even the savviest consumers, because each individual’s financial situation is unique. Today’s financial service providers should invest in  personalized credit education solutions to help build their ideal customers. Four in five adults want professional advice on basic financial issues, such as credit card debt or improving credit scores, according to the National Foundation for Credit Counseling. By offering personalized and interactive credit education tools that help simplify complex topics, fintechs can attract new customers, boost engagement and create additional customer touch points.

Take Ryder, for example. He’s a new father in his early thirties who leads a busy life managing his career and family. He’s attached to his smartphone, which he uses to pay at stores, send money to his friends and monitor account balances with a fintech app. He is in the market for his first home, but he’s not sure if he can qualify for a mortgage. He doesn’t have any delinquencies on his credit file, but it’s not immediately clear to him what factors are weighing down his score, or how to improve it.

The Experian Millennial Credit & Finance Survey reveals that Ryder’s challenges are hardly unique. It found that nearly two-thirds of millennials feel their personal finances hold them back from reaching their life goals like buying a home or travel. In fact, half said they had no idea whether their current credit score is good or bad. They prefer conducting banking on a mobile device and favor financial brands that use new technology.

Boost Acquisition and Engagement with Digital Natives

Millennials value the convenience of digital access and are drawn to self-service credit-education tools that can provide actionable insight into their financial well-being. These tools can be part of an effective acquisition strategy that offers bundled credit products to qualified existing customers.

Ryder, a captive user of a fintech’s online and mobile tools, took full advantage when the digital bank added credit-education features and credit score monitoring to its apps. He began carefully tracking his credit scores, following guidance tied specifically to his credit usage, and came up with a plan to improve his creditworthiness. He logged in twice a week to check progress against his plan, and one day decided to take advantage of an in-app offer from the fintech to consolidate high-interest debt from credit cards at two other banks. After time, his credit score improved and he was eventually able to qualify for a mortgage at more favorable rates.

Credit and financial education tools have been proven to help customers improve their credit scores. Over time, the tools can help customers become responsible credit users who are well qualified for extended credit offers. Within Experian’s custom credit education solutions, fintechs can present their customers with targeted, personalized prequalification offers for high-value financial products.

Experian’s turnkey solutions are available via fully hosted white-label platform, hybrid options and APIs making it easy for fintechs to offer comprehensive branded credit-education and credit-monitoring tools to increase engagement and cross-sell opportunities.

For more information about how Experian credit-education services can benefit your fintech business and customers, download the free e-bookHow Credit Education Can Help Fintechs Grow.

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