Profitable Consumer Lending for Banks

Lay-a-way programs started in the 1930’s and became very popular with consumers in the 1970’s where a merchant would reserve an item for a consumer until a consumer completed payments for the item. This was a prevalent way to make purchases for Christmas presents. Then in the early 80’s, lay-a-way programs were replaced with credit cards. Community banks didn’t have a profitable way to compete. Now credit cards are being replaced with Buy Now Pay Later programs that flourished during the pandemic in 2020.

Except for the largest banks who offer credit cards, financial institutions have been left out of the installment lending business again just like 40 years ago. Bank’s core processors have been slow to adapt to the changing consumer purchasing landscape as millennials and Gen Z’s head to Fintech companies for financing.

Over ten years ago, Square produced a digital payments solution for small businesses that far exceeded any banking offer. Six years ago Quicken Loans became the first lender to perform electronic closings for home mortgages. Now Affirm, Klarna, Sezzle, Zip, Openpay and others have developed products that have kept the banks on the sidelines once again. When will banks have an opportunity to compete for consumer loans?

Strunk’s Quilo program provides instant access to consumer loans via mobile device that enables banks to compete in the changing world of consumer lending. Underwriting, funding, collections and reporting are all done through the Quilo solution and there is no hassle for the consumer or the bank. Controls are set up to meet the bank’s credit risk standards as well as the desired return. When was the last time your bank made a $600 loan profitably? Best guess is was at least four decades ago.

To see what you are missing out on contact Strunk at info@strunkaccess.com or 800.728.3116 for a 45 minute demo.