New Research Highlights Consumer Preferences for Key Product FeaturesRegions Bank is piloting changes to its existing
savings-secured installment loan that enable customers to borrow with
as little as $250 in savings.
Kinecta Federal Credit Union will begin piloting, in mid-June,
a payday consolidation loan that will allow customers to convert
multiple outstanding payday loans into a single installment loan. LexisNexis
Risk Solutions is offering its RiskView score to underwrite this
Enova Internationalis piloting a new feature that allows
customers of its online NetCredit Gold product to customize their loan
terms and monthly payment amounts.
Emerge Financial Wellness is piloting ways to increase take-up
and usage of an optional “Save as You Repay” feature, which allows
borrowers of its workplace-based installment loan product to
contribute additional funds to a savings account each time they make a
Today, the Center for Financial Services Innovation (CFSI) announced the
creation of the Small-Dollar Credit Test & Learn Working Group. Five
leading financial services providers—Regions Bank, LexisNexis Risk
Solutions, Kinecta Federal Credit Union, Enova International and Emerge
Financial Wellness—are piloting small-dollar credit products or product
features that put into practice many of the recommendations from CFSI’s
Compass Guide to Small-Dollar Credit. The Compass Guide establishes
clear standards of quality for small-dollar credit products. Through the
Test & Learn Working Group, CFSI will work with participating companies
to evaluate the pilots, in order to better understand what works and to
encourage replication of successful approaches that promise to improve
the financial outcomes for millions of borrowers.
“These pilot projects are an important step in driving high-quality
innovation in a market that needs it,” said Jennifer Tescher, President
& CEO, CFSI. “Credit can help consumers weather a financial shock, build
credit, or smooth income fluctuations, and we believe the industry can
meet these needs with products that provide positive outcomes for
providers and consumers.”
The Working Group is funded by the MetLife Foundation, the Ford
Foundation, and the Omidyar Network.
“We believe that supporting initiatives like the Test & Learn Working
Group will offer critical insights into aspects of financial inclusion
that will enhance programs and advance our common goals,” said Dennis
White, President and CEO of MetLife Foundation. “We know that providing
access to quality, affordable products and services for low-income
individuals and families is important, but it is equally important to
ensure that these programs advance research and deepen knowledge in this
This announcement coincides with the release of CFSI’s latest research
on small-dollar credit consumers, “Design
Matters: Learning from Consumers’ Experiences with Small-Dollar Loans.”
This analysis of qualitative data focuses on borrowers’ experiences with
loan structures, repayment policies, customer service and opportunities
for economic mobility.
The results highlight demand for a new generation of products,
underscoring the importance of the Working Group’s efforts to identify
and test products that align provider and customer success.
The members of the Working Group are:
To learn more about CFSI’s Compass Guide to Small-Dollar Credit, visit here.
To read “Design Matters,” click here.
The Center for Financial Services Innovation (CFSI) is the nation’s
authority on consumer financial health. CFSI leads a network of
financial services innovators committed to building a more robust
financial services marketplace with higher quality products and
services. Through its Compass Principles and a lineup of proprietary
research, insights and events, CFSI informs, advises, and connects
members of its network to seed the innovation that will transform the
financial services landscape. For more on CFSI, go to http://www.cfsinnovation.com
and follow on Twitter at @CFSInnovation.
Kathleen Smith Shelton, 312-881-5868
Source: Center for Financial Services Innovation