Click to watch (or read the full transcript below) for more on Mike's big Q1 trends:
- Key investments are driving big changes in fintech
- Pricing in debt sales
- Digital marketing strategy for recovery and collections is getting more sophisticated
Trend #1 - Maturation in the FinTech Space
So when I think about the top three trends from this past quarter, I really think that we're starting to see the maturation of the Fintech space. It's a bit of a road that they have ahead of them, but really starting to see investments that show the industry is starting to mature, because it's starting to grow.
The areas that we've really seen investments focus on... you have servicing infrastructure, for example, can they retool their environment? Can they set up servicing, the policy, the procedure, the actual infrastructure, the loan servicing system, the collection system. Can they set it up to look and feel, the same as if they were a traditional bank? One, because they are growing, they have larger books and two, in many cases they’re backed by traditional banks. So, we’re really seeing investments in servicing infrastructure.
Trends #2 - Favorable Debt Sale Pricing
Another area that is not new, but we certainly continue to see around the recovery space: debt sales.
The pricing has certainly been favorable for it. The model pulling the revenue forward has fit really well in the FinTech space. We're seeing, even though there has been a heavy leaning towards debt sales, the past three plus years, we're seeing lenders who have never sold before in the FinTech space finally getting there. So, debt sales is one that's still there. I think we'll continue to see it for a while.
For more about debt sale, including how to prepare to sell a portfolio and which key qualities will help you identify a good debt sale partner, check out: How (and Why) You Should Integrate Debt Sales into Your Strategy
Trend #3 - Investments in Digital Marketing
We’re also seeing investments in digital marketing, which I don't think is just the FinTech space, but on the agency side, too. So, getting beyond just using SMS or email as a replacement for your letter. [We're also seeing companies] investing and spending time to develop personas to make it fit for your product and your consumer type. We're seeing a lot of investments in that space, and getting beyond the static trigger based on days past due, and really make it something more dynamic.
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