How are Financial Technology Companies Different by Earnest PM
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Main takeaways: - Financial technology companies are very different from other software companies - There are unique aspects of financial technology markets, organizations, and products, we’ll discuss the differences at each level, - Followed by an Ask Me Anything session about Product Management in general
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How are Financial Technology Companies Different by Earnest PM
- 1. www.productschool.com How are Financial Technology Companies Different by Earnest PM
- 2. FREE INVITE Join 35,000+ Product Managers on
- 3. COURSES Product Management Learn the skills you need to land a product manager job
- 4. COURSES Coding for Managers Build a website and gain the technical knowledge to lead software engineers
- 5. COURSES Data Analytics for Managers Learn the skills to understand web analytics, SQL and machine learning concepts
- 6. COURSES Digital Marketing for Managers Learn how to acquire more users and convert them into clients
- 7. COURSES UX Design for Managers Gain a deeper understanding of your users and deliver an exceptional end-to-end experience
- 8. COURSES Product Leadership for Managers For experienced Product Managers looking to gain strategic skills needed for top leadership roles
- 9. COURSES Corporate Training Level up your team’s product management skills
- 11. Product Management at a Fintech Company
- 12. Topics for Today My Journey to Product Management What is Earnest? Financial Industry Financial Company Financial Product Time for Questions
- 14. Childhood
- 15. Adolescence
- 16. College
- 17. College
- 20. What is Earnest? Online lending company No fees, ever Custom payment plans Consolidate multiple loans Modern, mobile-first design
- 21. What is Earnest?
- 24. Market
- 25. Market
- 28. Company Many Stakeholders Finance Owns Key Levers Tension Between “Fin” and “Tech” Huge Capital Requirements
- 30. Product Really Make a Difference Must Scale Carefully Different Set of Metrics Product Changes Are Delicate “Faking It” Can Be Tricky
- 31. Summary ● Huge opportunity to make big difference in people’s lives ● Creativity required to differentiate a commoditized product ● Even more cross-functional role than being PM in other industries ● Regulatory oversight offers opportunities and challenges ● Very severe downside to manage when scaling
- 32. www.productschool.com Part-time Product Management, Coding, Data Analytics, Digital Marketing, UX Design and Product Leadership courses in San Francisco, Silicon Valley, New York, Santa Monica, Los Angeles, Austin, Boston, Boulder, Chicago, Denver, Orange County, Seattle, Bellevue, Washington DC, Toronto, London and Online
Hinweis der Redaktion
- Product leader for over 10 years Led product teams for 12 person Series A startups to publicly traded companies Primarily focused on high-engagement consumer software companies
- HTML as middle school science project Harvard computer lab Websites for friends
- Went to college for business school Continued to learn to code with side projects Began creating websites for businesses
- Online lending company Personal loans and student loans (both refinance and origination) Did over $3B in originations last year Own over 30% of SLR market Fast Company named most innovative companies No fees, ever (origination, extra payment, prepayment) Flexible payment plan (whatever monthly amount you want, ability to skip a payment) Consolidate multiple loans Friendly, modern, mobile-first design
- Earnest looks at: Income FICO score & credit history Education Employment Retirement & investments Saving and Spending Patterns
- “Fintech” is a very broad term that encompasses a LOT Includes everything from real estate to wealth management to crypto to accounting to payments to insurance to payroll to lending 250 companies across 19 categories Doesn’t even include smaller players or larger incumbents This discussion focuses on consumer lending
- This talk will focus on Earnest, or what it’s like to be a PM at a consumer lending company
- Absolutely massive There is $14T outstanding consumer debt in the US Most of that is mortgages, but there is $4T in non-housing consumer debt (student loans, auto loans, personal loans, etc.) Alternative lending (non-bank) did $55B in transactions in 2018 Growing 35% YoY Two sided market Borrowers and capital markets Have to sell innovation on both sides (does cap markets believe our pricing?) Commoditized product Money is epitome of commodity product Have to come up with new ways to compete other than price Because of commoditized product, little differentiation, and thin margins. Scale becomes key. Complicated domain Steep learning curve Opportunity to take master’s class in finance industry
- Huge dependency on many stakeholders Lots of collaboration and hugely cross-functional role (credit ops, treasury ops, portfolio risk, etc.) There’s also a lot for the company to get right to survive (growth, pricing, fraud, risk, capital markets) Finance controls key levers Pricing in lending company, portfolio composition in robo-advisors Product can be as amazing as possible, but if financials are wrong, no one uses Cultural tension between “fin” and “tech” Finance side of company often wants high predictability, very conservative Tech side of company wants to be loose and agile, greater appetite for risk Huge capital requirements In addition to equity financing for business, debt financing for balance sheet This is made harder because you’re also competing with large incumbent banks who have access to much more, cheaper capital
- Really make a difference in people’s lives Save clients $30k on average NPS in high 70’s Must scale carefully Typical software model is huge up-front cost, then negligible incremental cost As lending products scale you have real downside - risk, fraud, money loss Therefore, must be more conservative in approach to scaling Different set of metrics Less focus on engagement and retention (when you have 4bps of defaults) Fewer, bigger clients, you can watch each one individually (Fullstory) but experimentation may take longer Product changes can be delicate Highly regulated industry, close scrutiny by legal Very sensitive personal information Careful about what data is being sent where, what teams have access to data, “Faking” things can be tricky Hard to dogfood a product, test on production, and perform competitive research