Lending club: 2021 was the year of transformation

2021 has opened customers’ eyes to the possibilities of digital-first banking. In 2022, says Anuj Nayar, Financial Health Manager at Lending Club, we can only expect their demand for experiences tailored to their financial journeys to increase even more. Read his thoughts in the PYMNTS eBook, “In a Nutshell: 50 Thought Leaders Summing Up 2021.”

2021 can be summed up in one word: transformative. This past year has shown us how businesses of all types have rapidly transformed to meet consumer expectations. Even in the face of the unpredictable changes of COVID, the importance of digital first banks has grown.

Consumers want a digital first experience tailored to their financial journey, and that expectation will likely only increase now that they’ve seen what’s possible. COVID has accelerated the digitization of banks, which I believe will continue long after the pandemic is over.

While COVID has accelerated the adoption and use of online banking experiences, the past two years have shown that banks cannot simply rely on a branch near a customer’s home. They must deliver and personalize digital services that match each customer’s unique financial journey. Traditional banks often treat each financial product as a standalone profit center with little information about each customer’s needs or financial health journey, and innovation often comes through acquiring other companies. This puts the products themselves at the center of business growth, not the customers.

Banks that have grown over the past year have generally prioritized and customized their services to individual needs, and FinTech has played a key role.

Even before COVID, FinTech had transformed the banking landscape, making it more accessible, personal and transparent. However, the current FinTech model is quite restrictive, as FinTechs still attack specific profit centers for banks without solving the problem from within. Simply put, many FinTechs are just putting a new front end to traditional banking products. However, the real innovation comes from creating a seamless and integrated customer experience that starts with a holistic view of the customer.

Some FinTechs are beginning to realize that the solution is for them to become banks. LendingClub’s acquisition of Radius is an example of a FinTech partnering with a bank to redefine financial services, versus completing an acquisition solely for a new financial product.

FinTechs and banks must come together – ultimately for the benefit of customers by providing services and products that meet the needs of their personal financial journey. I predict the next few years will be transformative for the banking industry as a whole and bring more change as more FinTechs and banks realize this truth.

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NEW PYMNTS DATA: AUTHENTICATION OF IDENTITIES IN THE DIGITAL ECONOMY – DECEMBER 2021

On:More than half of US consumers believe biometric authentication methods are faster, more convenient and more reliable than passwords or PINs. So why do less than 10% use them? PYMNTS, in collaboration with Mitek, surveyed more than 2,200 consumers to better define this perception in relation to the usage gap and identify ways companies can increase usage.

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