2015-11-03
Watch Out Credit, AltFi is Moving In.
The fintech space is exploding in popularity and alternative financing -- a 21st century solution to traditional credit -- is blossoming alongside it. A recent report from the Economist Intelligence Unit reveals that more than $25 billion has been invested into fintech companies over the past half-decade, making it the most popular destination for venture funding. And many of those investors are backing some of AltFi’s most disruptive players, like Upstart and Prosper.
What got us here
Out of control lending in the traditional banking space is one factor that got us to this point. An overabundance of subprime mortgage loans, concealed by high home prices and buoyed by securitization, were a chief driver of the last Financial Crisis. As a result, U.S. regulators were forced to enact an array of new regulations to ensure lenders wouldn’t threaten the country’s financial system again. In the aftermath, new regulations placed on the financial markets included Dodd-Frank, Basel III, Basel II/II.5 and the Card Act. These bills have also stifled traditional banks’ appetite to lend, and the stats are clear: Since 2009, the total amount of revolving credit in the U.S. has declined by nearly $1 trillion. Between 2008 and 2012, traditional small business lending in the U.S. fell by a whopping $120 billion. According to Mercator Advisory Group analyst Alex Johnson, another reason customers are flocking to alternative lenders has to do with technology. “In my research, I found that the answer is less a matter of pricing (as many assume) and more about providing the fast, digital-centric borrowing experiences that today’s consumers want,” he explains in a blog post. AltFi customers appreciate the transparency of the borrowing process, the hands-on control they have over the process and the ease and speed of using the technology involved.
Lower rates: A third factor
A third factor boosting the AltFi space has to do with interest rates. Minimal overhead expenses -- in other words, increased efficiency -- allow marketplace lenders to pass those savings on to the consumer. Companies like Lending Club, for example, have hundreds of employees operating an online infrastructure without the need for physical branches. "Our innovative marketplace model, online delivery and process automation enable us to offer borrowers interest rates that are generally lower on average than the rates charged by traditional banks, credit cards or installment loans,” the company explains in a recent SEC filing. There are several laws that apply to both banks and alternatives alike, including SEC oversight, but lighter regulations also let alternative lenders keep costs down. Unlike banks, marketplace lenders are generally not subject to the same capital requirements, according to Morrison Foerster’s Ze’-ev Eiger.
A natural evolution
New regulations, along with technological improvements and lower rates for some, have allowed a natural evolution to take place. Sites like LendingClub Corp (NYSE: LC) and On Deck Capital Inc (NYSE: ONDK) have now become household names after stock market IPOs, while student loan-focused SoFi plans on going public within the next year. What’s more, many of Wall Street’s biggest names are supplying the gunpowder for the boom. Prosper,with a valuation above $1 billion, has funding support from JPMorgan Chase, Credit Suisse, SunTrust and Neuberger Berman. Barclays Accelerator is also heavily invested in the space, while Citigroup and Goldman Sachs have made 26 different bets on fintech companies since 2009.
So...just how big of a threat is AltFi?
New survey data from The Economist shows 70 percent of bankers believe fintech will disrupt traditional lending in the future. And more than half of respondents think banks aren’t doing enough to keep a competitive advantage over new alternatives. In 2011, Lending Club issued $258 million in loans. By 2014, that number had grown to $4.4 billion. Business-related alternative financing in the U.K., which has a larger market than the U.S. on a per capita basis, is projected to grow ten-fold by 2020. While one might assume that the vast majority of this growth has come from the 88 million or so under-banked Americans, Lending Club actually requires a minimum FICO score of 660 for its borrowers. That said, other lenders like fast-growing Avant Credit focuses on lower areas of the credit spectrum.
One simple truth
This means that the AltFi revolution is not just being driven by below-prime customers banks no longer want. It’s also being driven by qualified bank customers who are making the decision to take their business elsewhere.
Disclaimer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. While Even Financial finds these sources to be accurate, it does not endorse or guarantee any third-party content.
PROVEN SCALE & TRUST
700B+
in consumer applications for financial services
175M+
consumer profiles generated
9M+
applicants routed monthly
Awards
PRESS
Read all about it!
Even
Even Financial Adds Tally's Low-Interest Line of Credit to its Embedded Finance Marketplace
NEW YORK, NY, March 15, 2022 -- Even Financial ("Even"), the category-leading embedded finance marketplace and independently managed subsidiary of MoneyLion, Inc. (NYSE: ML), has announced a new partnership with Tally, a leading financial automation company, to include the company's low-interest credit offerings on its platform.
"Tally has built a powerful tech-enabled system to help people solve one of the biggest financial problems today: paying off credit card debt," said Phill Rosen, Founder and CEO of Even. "We're thrilled to welcome Tally's line of credit offerings to Even's unparalleled network of financial services providers."
Tally is designed to help its members pay off their debt faster and save them money on interest and late fees. Members can lower their monthly payment with Tally's lower-interest line of credit, if eligible. Typically, at least a 580 FICO score is needed. Tally's system is customized to save people as much money as possible.
"Americans today owe nearly $1 trillion in credit card debt. We know from our research that many want to pay down their debt but struggle to get started. That's where Tally comes in," said Jason Huynh, VP of Credit, Analytics & Operations at Tally. "Our system combines financial automation with a low-interest line of credit to give people the help they need to get on track to pay off their credit card debt for good. We're thrilled that our partnership with Even will allow Tally to help even more people."
The launch of Tally on the Even platform enables consumers to get matched with Tally's custom, low-interest line of credit accounts of up to $25,000 in just a few minutes. After getting matched, eligible consumers complete the process through the Tally app. There are no out-of-pocket costs.
Tally is the latest partner to join the Even marketplace, a growing network of over 400 financial services partners and 500 channel partners covering a breadth of financial services including loans, credit cards, mortgages, savings, and insurance products. Even's marketplace technology enables any company to add financial products to its business, with full compliance and security, at scale.
About Even Financial
Even digitally connects and matches consumers with real-time, personalized financial product recommendations from banks, insurance carriers, and fintech companies on mobile apps, websites, and other digital touchpoints through its marketplace technology. Even's infrastructure leverages machine learning and advanced data science to solve a significant pain point in financial services customer acquisition, seamlessly bridging financial services providers (such as SoFi) and channel partners (such as TransUnion) via its industry-leading API and embedded finance marketplaces. Even enables any company to add financial products to its business, with full compliance and security at scale. Even was named one of "America's Best Startup Employers'' by Forbes for 2021 and was named to the 2021 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world. Learn more at www.evenfinancial.com.
About Tally
Tally is a consumer financial tech company pioneering full-service financial automation to help people save money, pay down their debt and reach their goals sooner. Founded in 2015, the company built the first fully automated debt manager to help put billions of dollars back in people's pockets. In 2021, Tally was named to Fast Company's Most Innovative Companies list and to Quartz's Best Companies for Remote Workers. Previously, Tally made Forbes' Next Billion Dollar Startup list, Forbes' Fintech 50 list, and the app won Real Simple's Smart Money award. Learn more at meettally.com.
Media Contacts
media@evenfinancial.com
press@meettally.com
HAVEN LIFE
Haven Life’s All-Digital Life Insurance Application Experience Launches on Even Financial’s Leading Life Insurance Search Engine
Even features the industry's largest multi-carrier, all-digital life insurance marketplace
New York, New York August 16, 2021Even Financial (Even), the leading search, comparison, and recommendation engine for financial services, has announced the launch of Haven Term and Haven Simple on its life insurance marketplace platform. Leveraging machine learning and advanced data science, Even solves a significant pain point in financial services customer acquisition by seamlessly bridging financial institutions and channel partners via its industry-leading API and embeddable solutions.
With the addition of Haven Term and Haven Simple, Even has further expanded its extensive network of premium life insurance offerings, strengthening its position as the industrys largest multi-carrier, all-digital life insurance marketplace. Haven Life, which offers Haven Term and Haven Simple, and is backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual), is known for its customer-centric approach and for its commitment to making life insurance more affordable and accessible. Haven Lifes term life insurance offerings will be available on Even properties and via its wholly owned subsidiary LeapLife.
"In these uncertain times, the majority of U.S. adults want the financial security of high-quality life insurance, but are often dissuaded by the complex application process and need to complete an in-person medical exam", said Phill Rosen, Founder and CEO of Even Financial. "Haven Life's groundbreaking, all-digital application experience brings tremendous accessibility and peace-of-mind to consumers. We're thrilled to welcome them to the Even platform."
The launch of Haven Term and Haven Simple on the Even platform enables consumers to get matched with medically underwritten term life insurance policies that they can apply for and, if approved, purchase instantly online. While most Haven Term applicants will need to take a medical exam, Haven Simple applicants do not. Haven Life's offerings expand the variety of life insurance options already available to consumers through Even's API.
"Haven Life is committed to meeting life insurance customers wherever they are — and often, it's where they are managing the rest of their financial life," said Wade Seward, Head of Distribution Strategy at Haven Life. "On the heels of introducing even more affordable pricing for the Haven Term product, our partnership with Even Financial allows us to marry that affordability with greater accessibility to offer comprehensive financial protection to shared clients with ease and efficiency.
Even entered the life insurance industry in 2020 through its acquisition of LeapLife, a leading insurtech and licenced life insurance agency. Since that acquisition, Even has worked with its large network of channel partners to make the process of getting personalized life insurance fast, easy, and accessible for consumers. In addition to Haven Term and Haven Simple, products offered by leading insurance companies including Lincoln Financial Group, Pacific Life, and Mutual of Omaha are available through LeapLife, Even's life insurance platform. Companies such as TransUnion and Lantern by SoFi rely on Even's embedded finance marketplaces to power 100% digital personalized life insurance policy quotes for their customers, with live agent support.
Even has continued its rapid growth trajectory in 2021 by reaching over $3 billion in consumer credit issued through its API and expanding its platform to over 800 partners. Earlier this year, Even was named one of "America's Best Startup Employers: by Forbes" for 2021 and placed in the Top 50 of the 2020 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world.
About Even Financial
Founded in 2014, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. As the leading search, comparison, and recommendation engine for financial services, Even seamlessly bridges financial institutions (such as SoFi) and channel partners (such as TransUnion) via its simple yet robust API and embeddable solutions. Even turns any consumer touchpoint into a comprehensive financial services marketplace with full compliance and security at scale. The company is backed by leading financial services firms and VCs, including American Express Ventures, Canaan Partners, Citi Ventures, Fidelity's F-Prime Capital, Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Learn more at www.evenfinancial.com.
About Haven Life Insurance Agency
Haven Life Insurance Agency, LLC (Haven Life) is re-thinking how people financially protect the ones they love. Haven Life is committed to delivering exceptional products, delightful purchasing experiences, and meaningful moments of service to the modern life insurance customer. Haven Term is a Term Life Insurance Policy (ICC21 Haven Term in certain states, including NC) issued by C.M. Life Insurance Company (C.M. Life), Enfield, CT 06082. In New York (DTC-NY), and California (DTC-CA), and other states, it is issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.
Policy and rider form numbers and features may vary by state and may not be available in all states. Haven Term is available through Haven Life Insurance Agency, LLC (Haven Life), whose agency license number in California is OK71922 and in Arkansas, 100139527. Both Haven Life and C.M. Life are wholly owned subsidiaries of MassMutual.
Please note that issuing the policy or paying its benefits depends on the applicant's insurability, based on their answers to the health questions in the application, and their truthfulness.
MassMutual and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company are rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of June 1, 2021 and is subject to change. MassMutual has received different ratings from other rating agencies.
Media Contact
media@evenfinancial.com