When the downturn arrives, lenders must be willing to change their approach dramatically.

It is a familiar shift for more established financial institutions, but for fintechs, it's all new. Instead of focusing primarily on growth and acquisitions, fintechs will - maybe for the first time - have to turn their attention to the less glamorous, historically neglected aspects of lending: credit governance, customer experience, charge-offs, and delinquencies. In short, collections.

“When the economy is good and growth is good, [fintechs] can focus on lending, and everything is rosy,” says Justin Metacarpa, Senior Operations Leader at 2nd Order Solutions. But the economy won’t be good forever, and as the Federal Reserve continues to raise interest rates, the risk of a recession becomes very real.

View this content by subscribing

Please register to unlock this content

I already have an account. Log in