Three Things We’re Hearing
- Comparison sites drive fintech growth
- Consumers love Visa and Mastercard
- Digital marketing soars
A three-minute read
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Comparison Sites Drive Fintech Growth
- After a post-pandemic decline, online search for personal loans trended upward over the past year
- Online traffic to top fintech lenders has similarly rebounded and grown from pre-pandemic levels, with referrals from comparison websites such as Credit Karma, LendingTree, NerdWallet, and Bankrate to those top lenders having grown over 200% since Q1 2020
- Upgrade and Upstart received the largest number of referrals from the sites monitored, with Upgrade and SoFi showing the highest growth since Q1 2020
- Fintechs have been at the forefront of sourcing loans from comparison sites, while most retail banks have yet to cultivate relationships with comparison sites
Consumers Love Visa and Mastercard
- Epic recently surveyed 1,142 consumers regarding their opinions on the major general purpose card networks
- While many attributes of Visa and Mastercard cards are more issuer-specific (e.g., customer service, pricing, and rewards) than those of American Express and Discover, we wanted to gauge consumers’ brand perceptions across these and other criteria
Digital Marketing Soars
- The post-COVID drop in paid digital spend across all consumer financial products recovered in 18 months and, in recent months, has far exceeded pre-pandemic levels
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As noted in prior Epic Reports, post-pandemic mail volume for credit cards has recovered faster than for most products and at a much faster pace than following the previous major industry shock in 2008-2009
- The beginning of the 2020 recovery took just one quarter vs. five quarters in 2008-2009
- While credit card mail volume has never returned to the 7-8 billion annual volume of the early 2000’s, it took only six quarters following the 2020 drop to reach and exceed pre-2020 levels
- Recent positive trends in mail volume have continued, with volumes for card, personal loan, and private student loans having reached or exceeded early 2020 levels
- Education refinance mail volume still lags as lenders wait for the expiration of the Cares Act
- HELOC and home equity loan mail volume is 30% lower than pre-COVID
Quick Takes
- There has been little change in the top Visa / Mastercard issuers in the past year, with the exception of Goldman Sachs’ 92% year-over-year growth
- Goldman jumped from being the 17th largest issuer in 2020 to the 11th spot in 2021
- The primary drivers behind Goldman’s rise were the acquisition of the General Motors cobrand portfolio and aggressive marketing across other products and channels
- “Fill up now. Pay later.”
- Klarna is allowing consumers to pay for gas using its BNPL service
- Despite the increase in gas prices, gas, like groceries, has not typically been an item that has been purchased using installments
- BNPL Watch
- Affirm delayed an asset-backed securities sale to following the withdrawal of a major investor, with those close to the matter citing “general market volatility” as the reason
- BNPL asset quality is under close scrutiny as delinquencies normalize
- Capital One has extended its Kohl’s private label partnership and announced the 2023 launch of a Kohl’s cobrand card – this is the second major retailer deal by Capital One following the January report that BJ’s Wholesale Club would be moving its cobranded cards to Capital One from ADS
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Thank you for reading.
Jim Stewart
www.epicresearch.net
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