Embedded Lending & Credit: Enhancing Consumer Experiences

In today’s credit & lending landscape, the customer experience is better than ever. A recent report from PwC highlights that 90% of customers say the experience a company provides is as important as its products and services.

The advent of embedded lending and the power of advanced data analytics are enabling increasingly personalised customer offerings and making it easier for consumers to access credit. 

We speak to Danielle Sesko, Director of Product Management and Innovation at TruStage™, who outlines the transformative effect embedded lending has on the market today. 

TruStage: Specialising in insurance, investment and technology 

In her role at TruStage, Sesko is responsible for creating and empowering the company’s teams to develop industry-disrupting financial services solutions. The mission of Sesko and her teams is clear: to deliver innovative solutions that improve the financial well-being of millions living in the US.

Indeed, as a US company, TruStage faces significant competition in delivering effective technology solutions to support people’s financial futures. 

To set itself apart, TruStage has distinguished itself as a leader in providing insurance, investment and technology solutions, built on almost a century of experience with a philosophy of ‘people helping people’. 

For Sesko, the ability of these innovations to improve the customer experience supports consumers’ well-being, and access to financial services.

“Embedded lending and advanced data analytics are significantly enhancing the customer experience by streamlining the credit application process and providing tailored financial solutions,” she says. 

“For instance, platforms like Affirm offer point-of-sale financing seamlessly integrated with the shopping experience, allowing customers to split purchases into manageable payments without the hassle of traditional credit applications.”

It is only by leveraging the power of advanced data analytics that platforms like Affirm can achieve this. Advanced data analytics analyse a plethora of consumer data points to assess creditworthiness beyond traditional credit scores, enabling more inclusive lending decisions, Sesko adds.

“This means that individuals with limited credit history can still access credit based on alternative data such as their transaction history or employment status, thus broadening access to financial products and services.”

Embedded lending: Reaching more middle-market consumers 

Expanded access to financial services via the origination of alternative data use is being heralded today for its ability to reach the underserved. 

And, once engagement can be had with these consumers, tailored products and services can be offered to fit their specific needs. 

As Sesko explains, fintech innovations are empowering underserved communities by leveraging personalisation and accessibility to expand access to credit and lending products.

“For example, companies like Basis leverage alternative data sources and technology to help more consumers get financing for their dental care. 

“By offering loans through digital experiences, these fintech solutions bypass the need for physical bank branches, making financial services more accessible to those in underserved areas or with limited mobility.”

Valuable insights from consumer data

The accessibility of services made available to the underserved comes from bespoke offerings designed from a consumer’s individual data. 

As Sesko notes: “Accessing consumer data can provide invaluable insights into a person's financial health, enabling more accurate risk assessments and personalised financial solutions. 

“Through the utilisation of transactional data, spending habits, bill payment history and other financial behaviours, lenders can build a comprehensive profile of an individual's financial health. 

“For instance, companies like Credit Karma leverage consumer data to offer personalised recommendations for credit cards and loans based on a user's financial habits and goals.”

Filling gaps in the consumer credit ecosystem

While embedded lending technologies have continued to fuel convenience for consumers, it has also exposed a gap in the consumer credit ecosystem. 

“Today, the fusion of technology and finance continues to offer unprecedented convenience, accessibility and speed for consumers,” notes Sesko. 

“As digital lending has become more ubiquitous in the market, however, a critical gap in the consumer credit ecosystem has emerged – one that was traditionally filled by lending insurance. 

“As the industry’s first true digital lending insurance solution, Payment Guard from TruStage successfully fills that gap, helping digital consumer lenders mitigate delinquency and default risk without adding friction to the borrower experience. Currently, no one else in the market does what Payment Guard does.

“We enable lenders to do what they do best – provide needed capital to consumers to fuel their lives.”

Indeed, providing consumers with the capital needed to fuel their activities has been particularly important in recent times with persistent macroeconomic difficulties and rising inflation pinching consumers’ wallets. 

But as conditions stabilise in the future, TruStage is looking forward to developing new solutions to enhance the embedded lending and insurance market.

TruStage: Looking to the future 

The main immediate future for TruStage is in the continued interest it is receiving for its Payments Guard product. 

Sesko concludes: “To date, we have already seen strong market interest and adoption for Payment Guard and expect that to continue to grow exponentially for all types of consumer loans – personal loans, cash advance, BNPL and auto loans. 

“As we think about the impact that Payment Guard can have on the lending ecosystem, what we are most excited about is the potential to widen the aperture of credit underwriting. 

“Since we are helping to make lenders more efficient in attracting borrowers, as well as more resilient against potential losses, the long-term impact that we can have is making credit more accessible to more people.”

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We want to be transparent with our valued customers. The article written about our product has been provided by an individual who received compensation for sharing their positive experience. While we believe in the authenticity of their endorsement, it’s important to note that they were remunerated for their testimonial. We appreciate your trust in our brand and strive to maintain open communication about our marketing practices. If you have any questions, feel free to reach out to us. This insurance is only available in the United States. Availability and features may vary by state.

TruStage™ Payment Guard Insurance is underwritten by CUMIS Specialty Insurance Company, Inc. CUMIS Specialty Insurance Company, our excess and surplus lines carrier, underwrites coverages that are not available in the admitted market. Product and features may vary and not be available in all states. Certain eligibility requirements, conditions, and exclusions may apply. Please refer to the Group Policy for full explanation of the terms. The insurance offered is not a deposit, and is not federally insured, sold or guaranteed by any financial institution. Corporate headquarters 5910 Mineral Point Road, Madison, WI 53705. ©TruStage

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