Retail Banks Lose Out!

We asked Paul about Best Egg’s position in the personal loan market and to what he attributes their success:

“I think objectively we are among the leaders in the fintech consumer lending space as measured by profitability, credit performance, and positive customer outcomes. Over the last 10 years we have developed the ingredients necessary to succeed in credit and marketing analytics, operations, capital markets, risk management, and technology – capabilities necessary to deliver our products.”  

Best Egg’s Management Style

“We all work together as a team being focused on the core product and not trying to do too many things at once. A practice that we’ve had from the beginning is that every quarter as a team we go through and determine what’s the most important things for us to do as a company and make sure everybody’s on the same page with what we’re trying to work towards.”

Best Egg’s Market Segment

“We think about our core customers as people with limited savings that have generally good credit scores and good incomes but use credit to live the life that they want to live. As a result, they may not have much savings, making them consumers that deposit-focused banks might not target.”

Competing with Larger Retail Banks

“We talk a lot about focus on our personal loan product, whereas retail banks have large product sets and target the consumer that has a lot of deposit products, mortgages, and credit card spending. We know our consumers and focus on what they need. Having debt in several different places, at different rates, can feel overwhelming, and we work to help them manage their debt better or get access to funds if the water heater breaks or the car breaks down. We then help guide them to a better spot with our financial health tools and help them build a level of financial confidence that they didn’t have when they first started working with us.

The pace of change in technology is another area where we have an advantage over larger banks. We are in a better position to change because we’re smaller, more focused, and more nimble.”

What Advice Would You Give to a Younger Paul Ricci?

“I got pretty lucky in landing in some good positions early in my career, but looking back on that experience would tell me it’s really important to work with a good team. Culture means a lot and the people that you work with mean everything. Working in a place where people get things done without a lot of bureaucracy and politics is a huge asset. It is up to a young person starting their career to take control over their career and not to expect someone else to come to you with these opportunities – you really have to look for them yourself.”