Benzinga, a leading news and data provider, will be holding its annual Benzinga Global Fintech Awards, a day of dealmaking, networking, and recognition in the financial technology space, on November 11, 2021.
The event will award Benzinga Listmakers, those top companies part of Benzinga’s Global Fintech Index, for their accomplishments innovating, as well as merging the best of finance and technology.
In recognition of those disruptive innovators creating positive and diverse change within the financial services space, Benzinga presents OppFi.
About: OppFi powers banks to deliver credit access to the everyday consumer. The company has unlocked credit to the 60 million consumers with low income or credit.
Insurtech pioneer and OppFi CEO Jared Kaplan said he joined the company because he saw plenty of unsolved problems in the traditional lending space.
“What we built at OppFi is a financial technology platform that powers banks to offer credit access to the 60 million Americans that have been completely locked out of coverage,” Kaplan told Benzinga. “If you’ve got bad credit and no savings, and you need credit access and can’t get it, you’re in a very difficult situation.”
Core Product: OppFi works with banks to underwrite and service loans to the underserved, on their behalf. Using alternative data, as well as machine learning and artificial intelligence, OppFi is able to look beyond traditional factors in determining creditworthiness, thereby approving 30% more loans.
Things like how fast applications are filled out and spelling are fingerprints to a consumer’s riskiness.
“Through all the fancy technology that we have behind the scenes, we figure out who is creditworthy, and then we actually go to the broader marketplace and see if we can find coverage, at a lower rate.”
OppFi, through its referral program with 15-near-prime lenders who offer rates lower than 36%, in 10% of cases, is able to offer a better rate. In other cases, OppFi works with banks to underwrite customers, structuring products in a way that rebuilds credit.
“It’s typically $1,500, 11-month installment loans," he said. "There are no fees, prepayment penalties, origination fees, late fees, NSF fees. We report to the three credit bureaus and the loans amortize over time.”
Through so-called graduation products, OppFi enables customers to then access mainstream solutions, like credit cards, to maintain credit.
See also: Fintech Courses
Use Case, Recent Developments: OppFi has very little competition. Why? Barriers to entry, among other factors.
“We are consciously building all parts of our delivery model to be unique and have a sustainable advantage,” the CEO said in reference to OppFi’s best-in-class customer acquisition costs, credit decisioning model, and customer service.
“We do a pretty counterintuitive thing from a service perspective; we put our phone number on the website,” Kaplan said. “We’re rated 4.8 out of 5 stars on the Better Business Bureau website.
In light of success in the marketplace helping consumers weather the COVID-19 coronavirus pandemic, OppFi announced it would merge with FG New America Acquisition Corporation FGNA, a SPAC led by ex-TD Ameritrade CEO Joe Moglia, to raise funds and build a more robust platform and product portfolio.
“Having the opportunity to partner with someone like Joe Moglia made it a no-brainer because his brand credibility, in tandem with what we’re doing, allows us to highly differentiate the company and how we serve the customer,” Kaplan said. “The SPAC process is faster and you can talk about your vision in the future, much easier.”
Innovation Outlook: Going forward, OppFi looks to be on the front lines of innovation in the fintech space. It will accomplish this by providing solutions to access, rebuild, and grow credit.
“There are very few IPOs with five-years of profitability and growth at our pace,” Kaplan said in a discussion on prospects for growth in 2021, given the pandemic reopening and an inclination, by consumers, to spend more.
“We’ll have three products in the marketplace that can service the underserved customer. Over the next 12 to 18 months, when the volume comes back, we want to serve this customer with the best available product, and then graduate them back to mainstream products, over time.”
To learn more about OppFi, click here.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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