Local Consumer Lender In Australia Now Competes Effectively Against Big Banks
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Background/Opportunity
Cash Direct is an Australian online lending operation that connects investors seeking high cash returns (in a low interest rate environment), with underserved consumer lending segments. It’s two main products are smaller consumer loans up to $2,000 for lower-income populations, and medium consumer loans up to $10,000 for new working migrants to support the start-up costs of their new life in Australia.
Generally, these people have thin or no credit history and find it difficult and often impossible to attain a credit card or borrow from mainstream lenders like the Australian banks.
Cash Direct identified these underserved niches as a great business opportunity. They understood that when they can help these honest, hardworking people in their time of need, they are committed to paying back their loan and invested in building a lasting relationship with Cash Direct. By supporting their lender club investors in earning attractive returns with less stress, there is always capital available to support the loan needs of their target customers.
Cash Direct saw the potential to offer a compelling value proposition to these consumer segments, underpinned by an easy to use 100% online and paperless experience. Combined with advanced risk segmentation, the proposition drives conversion and retention of higher life time value customers.
Business Problem
The lending space in Australia is extremely competitive. So smaller lenders, like CashDirect, have to go the extra mile to outperform big banks. For several years the company had been using a very basic loan management system. Origination and account servicing processes were predominantly manual. They involved too much human involvement, and resulted in too much human error. They needed to put these time-consuming activities on cruise control, so they could focus on business development. It was clear that they needed robust end-to-end automation, if they were going to grow their business.
Cash Direct requirements for their lending technology solution included:
1. Easy to deploy and easy to use
2. End-to-end automation
3. Automatic bank statement requests based on pre-selected criteria
4. Advanced credit risk metrics and a cybersecure screening environment
5. Streamlined workflows which would allow a small staff to process a larger volume of loans
6. 100% online
7. Customizable credit scorecard
8. Outstanding user experience for prospects and customers
9. A single, comprehensive hub for all their business processes
10. Scalable solution that would accommodate long-term growth
Solution
After a careful selection process that included several competing technology providers, Cash Direct chose the TurnKey Lender Box edition. This platform serves as the foundation for Cash Direct’s lending operation. Then the basic box foundation was enhanced with optional features, including a credit decisioning module, and integrated with their third-party providers and suppliers to create a custom solution.
The custom platform included these features:
1. Customized scorecard within a proprietary credit decisioning engine
2. End-to-end automation of the lending process
3. Integration with a payment provider, a CRM system, a credit bureau, and other third-party suppliers
4 .Fully cloud-based solution accessible anytime from anywhere
5. Ongoing support plus on-demand development and deployment of custom functionality
6. Semi-automatic credit decisioningScalable solution that originates loans in minutes
Results
Cash Direct witnessed significant portfolio growth with improved profitability after implementing the automated lending platform. They were able to build a more efficient conversion funnel, and expand their business at a faster rate. They are issuing more loans without increasing credit risk or bad debt.
Testimonial
We looked at other lending solutions. But TurnKey Lender was just more accessible and…well, turnkey. Now we’re on a level playing field with the bigger guys without the overhead. This, and intelligent credit scoring, helps us provide our borrowers with affordable loans while working at a profit.
Simon Lindsay
Co-Founder, Managing Director