Globalization has created global citizens – people crossing borders and settling in new countries for school or work, or simply choosing to call a new place home. For individuals moving to the U.S., that flexibility comes with huge challenges when it involves simple tasks such as getting a credit card.
“When we first started the company, we had people coming from China, India and Australia who had top-rated jobs back home and were earning great salaries, but they couldn’t get access to quality credit products and it made no sense,” Towers Wilen, co-founder of Sable, recently told PYMNTS in an interview.
He said that from a credit perspective, most legacy banks or credit institutions look at the usual data points, like FICO scores, when underwriting – which is a problem, because that data does not exist for individuals who are new to the U.S.
Wilen said the neobank was born out of the pain points that his co-founders experienced when they moved to the U.S. from their home countries, including struggling to get access to bank accounts and credit cards or simple everyday activities, such as receiving salaries or renting apartments, which are nearly impossible to achieve without a Social Security Number (SSN) or U.S. credit history.
That led to the launch of Sable in 2019, which offers global citizens who move to the U.S. a one-stop-shop for checking and credit accounts. With just a government ID and a visa as proof of legal status, individuals can be onboarded, start building their credit scores and get on a path to unsecured credit in as little as four months – the fastest timeline on the market today, according to Wilen.
Customers must hit clear milestones set by the firm to increase the likelihood and speed of becoming unsecured. Those who are eligible for “graduation” are notified through the app each month, at which point they receive 100% of their secure funds back as a credit balance, with no credit check or impact on their credit score.
Venturing into Cross-Border Remittances
In August, the New York-based FinTech platform announced a new integration with Wise (formerly Transferwise) that will allow customers to transfer money abroad directly through Sable at faster and cheaper rates than any remittance alternative on the market.
Wilen noted that historically, international money transfers have been “expensive, non-transparent, full of hidden fees and, most importantly, very slow,” which were some of the pain points the neobank was looking to solve. And of the different providers for money transfer solutions and remittances services, Wise best shared its values for transparent, seamless and effortless products.
Wilen said the partnership has guaranteed the “cheapest international remittance solution in the U.S. The company is so confident in the product’s affordability that it offers to cover the difference in costs if customers find better remittance rates elsewhere.
Since inking the deal, Wilen said there’s been a significant uptake from Sable’s international base, going from six-figure revenue to millions of dollars within the first week of launch. This has made partnerships central to the company’s growth, as it assesses potential partners along the customer experience journey — like loan and test preparation providers in the case of students and relocation companies for expatriates and working professionals.
Wilen said the firm is starting to move beyond its niche market of international students and professionals moving to the U.S., to include new and unexpected customer bases like U.S. citizens and U.S.-based minority communities looking for premium, quality and efficient ways to build credit. These new clients have shown keen interest in Sable’s busines, leading the startup to shift its mission of serving internationals and to focus more on building a premium global financial platform “based on inclusivity, accessibility and simplicity.”
Be Transparent, Think Rationally
That is also the key reason behind the neobank’s decision to make credit one of its key focus areas, Wilen said, given that the credit market has long been shrouded in secrecy, and it takes a long time for customers of traditional banks to get access to unsecured credit.
Moreover, the credit journey is like a “black box” during that waiting period, with consumers left in the dark as to what they must do, how long it will take and what the requirements are to get unsecured. “Why does it need to be so non-transparent, and why can’t you just tell people what they need to do to get what they want?” Wilen asked of traditional banks engaged in these non-transparent and secretive measures.
He added that over time, companies like the cross-border startup Nova Credit have emerged, translating international credit data into a U.S.-equivalent score that underwriters can easily use to evaluate applications for credit products. Sable’s international partners have also helped the firm to underwrite and offer an increasing number of individuals access to credit.
All it takes is scraping off the old way of assessing risk and thinking rationally, Wilen explained, to determine that a non-U.S. citizen attending a prestigious university or working at a top-rated company is potentially creditworthy and would be a great customer.
He noted that companies like American Express, where he previously worked in business development and partnerships, are looking at the space differently and partnering with companies like Nova Credit. That said, changing traditional approaches can be challenging for large institutions, given their company politics and risk-averse nature.
That’s why FinTechs and technology companies like Sable have the ability to move more nimbly and quickly in assessing individuals in different ways, Wilen noted.
Loans, Rewards and Benefits
Given the trillion-dollar student loan market in the U.S., Wilen said the loan market holds promise, and Sable will be looking to partner with companies in that space offering seamless, efficient products similar to what Wise offered in the remittance space.
He said it boils down to getting comfortable with risk, which he acknowledged is much less for a credit card than a huge student loan. That said, entering that space is still within reach: “We’ve already figured out how to accurately assess these individuals, and we’re getting better and better over time in the credit card space,” he remarked. “Once we’ve gotten comfortable [there], we can expand into the loan space as well.”
The company also has ideas to reinvent the rewards and benefits game, combining it with credit-building in addition to pay-over-time products and the simplification of complicated subjects related to investing, saving and budgeting.
As FinTechs and traditional banks double down on going digital, Wilen said it’s important to have differentiated offerings that provide a modern approach to global payments. Overall, he explained, “we want to help people build their credit, and we want it to be an easy and enjoyable experience, not a painful one […] so that this can be as premium of a product as anything else out there.”
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