Today’s CFO Uses Data and Experience to Shape Digital Transformation

As the first public neobank in the U.S., LendingClub has well-positioned itself to meet consumers’ needs as they rely more and more on digital channels to manage their finances and credit.

“What we’re trying to do is also take that digital frame that we have and trying to find ways to provide real value to our members by getting them out of high-cost revolving debt and what they’re paying in a credit card,” LendingClub Chief Financial Officer Tom Casey told PYMNTS. “So, it’s a big, big opportunity for us going forward.”

After years of disrupting lending and working to reduce the cost of credit, LendingClub has become a bank and uses that same digital mindset and capability to provide traditional banking products. Today, the company sees opportunities to help customers both save more money when they borrow and earn more when they save.

“As a CFO, my job is to drive as much productivity across the organization and the mindset of not just the finance team but really the whole company on how we systematically use technology to drive our efficiencies and really excite customers with new products and services,” Casey said when interviewed for PYMNTS’ “Day in the Life of a Digital-First CFO” series.

Not Paying for Infrastructure They No Longer Value

Having no branches, LendingClub can take some of what it hasn’t had to spend on locations and give it back to the borrower. This dovetails with the fact that consumers don’t see as much value in local branches as they once did.

“That’s the real change that digitization has done is being able to allow us to change the way consumers pay for certain products because they’re not paying for infrastructure that they don’t value anymore or they don’t use very much,” Casey said. “So, that’s really what you’re seeing is some of these large macro trends that are changing the way consumers access banking.”

Because everything LendingClub does is digital, its infrastructure is electronic and seamless. For example, when a customer applies to get a personal loan, the company processes it automatically, about 80% of the time, with no human intervention. If consumers do need help, the company has the data to provide them with a choice of programs.

“Using that kind of digital-first frame, quick decision-making, and driving efficiencies allows us to make compelling offers to our members — and that’s what makes them keep coming back,” Casey said.

Realizing That Change Is Here to Stay

That value proposition is becoming even more compelling as inflation continues and the Federal Reserve indicates it wants to raise interest rates. When consumers see the cost of their revolving balances increasing and the cost of living rising, they become more alert to alternatives, such as locking into a fixed rate in a personal loan.

“This is a great time for us to acknowledge that consumer credit is getting up higher, and we provide a real solution for them to drive down their cost to credit,” Casey said.

He added that even older consumers are starting to realize that they can go online to save money. In that sense, banking and lending are seeing the same consumer transition to digital that retail has seen over the last decade. In addition to saving money, consumers are learning that the digital option provides quicker results and greater transparency.

“It’s kind of like democratizing credit; we underwrite each individual person based on their individual behavior and credit background,” Casey said. “Consumers are starting to realize that this is a change that is here to stay — and it’s only getting better.”