A Sneak Peek Into the Future of Lending
By Stoyan Kenderov, SVP of Product & Design
LendingClub just turned the corner of its first decade of existence and I couldn’t be prouder of what our Product & Design teams have achieved. What a full decade it has been!
We’ve pushed a number of technologies and innovations on the efficiency curve, including:
- peer-to-peer marketplace technology
- risk monitoring
- access to credit
- automated investing
- loan servicing and investor servicing
The growing base of platform borrowers and investors has seen the tangible benefits that came from all this great work—in fact, platform investors have historically enjoyed 5-7% returns.
We Can Do Better
While we’ve accomplished a lot, when we look forward to the next ten years we are humbled by how much work we have cut out for us to turn LendingClub into a uniquely powerful, customer-centric financial services platform.
Let’s start with one important observation: Ten years from now, filling out a loan application on a web-form could be a thing of the past.
Our children may look back on today’s state of online lending and wonder who in their right mind would bother with:
- A 5-minute online application process that involves typing personal information on a keyboard (sometimes a very small mobile keyboard!)
- Gathering and submitting additional documents for verification
- Waiting for approval…
- …and then waiting a few more days for money to arrive in their bank accounts
They will not understand this time-consuming and unnecessary effort just like we don’t understand how someone today would want to buy Encyclopedia Britannica on a set of CD-ROMs or use a 28kbp/s modem to access the Internet. If you remember the sounds those modems made while connecting to the Internet, chances are you were online when “You’ve Got Mail” (starring Tom Hanks and Meg Ryan) was still at the box office and Blockbusters were ubiquitous. How times have changed!
A Brief History of FinTech
Creating More Natural Computer-Assisted Experiences
Ten years from now, financial products won’t require a user to:
- Stop everything they’re doing
- Sit down in front of a computer
- Focus their complete attention on explaining (and re-explaining!) who they are and what they want to their device
With the continuous integration of identity information, future financial products will feel much more like an old friend who knows us and faithfully anticipates our needs. When the friend needs our attention, they will gently grab it for a moment to ask a question or get additional guidance. Most importantly, they will remember what we said after we tell them once, and they’ll only ask about it again when things have changed. If only we could do that with our spouses! It would truly be a benefit for humanity.
Ten years from now, personal assistant devices will shrink to an earbud form factor with smart motion sensors, descendants from today’s smartphone or speech enabled home device form-factors such as Alexa or Google Home. The small form factor will lend privacy to interactions, while allowing smart agents to monitor the context and activate at the right moment. It will enable all sorts of products and financial services to deliver their value in context, as part of our natural daily routines, further eliminating unwarranted friction. There will be no fumbling for your smartphone.
Proactive Service Delivery
Where most products today are designed to finish the interaction with the customer on the very device where the interaction was initiated, the future will be different. The product, rather than the user, will decide when to interact with us. It will switch from one device to another, providing seamless service throughout the day via earbud, a large close-by display, a home assistant device in the kitchen countertop, and/or an on-board computer in our car.
We are going to be building products that learn how to transcend devices to get things done. They will adapt to the speed of movement and the amount of attention available from the user in any given moment. Think – if the user is late and in a rush to get someplace, the service will sense the urgency and diminished user attention and may simplify its asks, pick a calmer voice, or postpone parts of the transaction until a more suitable moment presents itself. A sensing, fully adaptive, fully responsive and proactive service will feel like a friend that cares. We will be thinking of the richer personalities of such services. In contrast, today we live in the era of very narrow-purpose user-interfaces that lack the ability to adapt to changing context and thus exhibit the same limited static behavior – a mono-personality of sorts.
Yes, we need to solve a number of hard problems in order to achieve such frictionless adaptive service experiences. For one, authorization for services such as credit will require our platform to have access to user-held personally identifiable information (PII) such as Social Security Number, bank account credentials, and addresses. It will probably also need access to authentication and authorization tokens for other services such as Gmail, ADP, or digital DMV records. Users may grant access for a single use, or in perpetuity – and they will need a way to instantly and securely revoke that. But the benefits of achieving those connections will be enormous. LendingClub will be able to advise its customers continuously and apprise them of financial options they have, similarly to how a highly-skilled (and highly-paid) CFO does today for their company. The personal CFO idea will finally be closer to reality.
Future services will make far better use of legitimate and trustworthy third party public data sources to eliminate redundant user information acquisition. For example, services like Arivify, Spoke, LinkedIn, PeopleSmart and others can be queried for the user’s address and place of employment.
Building the Experiences of the Future
For us product designers and product managers, this will be a decade of gigantic progress.
We will be building platforms that enable adaptive, responsive, always-on products that do things for us, in a frictionless, more personalized, self-learning and continuously improving way.
We are excited about the prospect of creating products that protect our users’ privacy better, watch out for them, plug into their daily rhythm more seamlessly, and over time learn what makes our customers happy and safe. The interaction models for such products will begin spanning the many virtual and physical places that we inhabit – from kitchen countertops, smart cars, and large display surfaces to sunglasses, earbuds, and wearables. The Internet of Things will know when to engage us and in what context—and when to stay out of the way. We will leave behind the venerated human-computer-interface. The more that connected computers learn about us, the less we, humans, need to worry about remembering to initiate important interactions.
We are entering a decade where computers and AI will reciprocate and will be the first to initiate interactions with us. As a result, our designers will have to figure out the interaction principles for engaging users in short attention bursts in yet-to-be-imagined ways.
What excites us product managers and designers, is the desire to create delightful, natural, and frictionless customer experiences that make the old ways unimaginable to our users. If you share that excitement and want to design and build financial platforms for products with rich personalities, check out our open positions. We want to hear from you!