Jared Kaplan: I was approached for a CEO job at OppFi. Those don’t come along every day, so I took a closer look. It had been started by a well-known family in Chicago called the Schwartz family. Ted Schwartz had built a successful call center business in the 90s called APAC Customer Services.
His son, Todd Schwartz, had founded OppFi and had this terrific vision. After the great recession, a tremendous amount of capital dried up from the middle American market, and customers with poor or near-prime credit scores, all of the sudden, had fewer options to finance their purchases.
The last resort market was expensive with products that were structured poorly. They couldn’t qualify for prime products. That is why we established OppFi. When he pitched the business, it made sense to me. The backdrop of OppFi is interesting because non-customers don’t understand what the everyday American goes through today.
We like to talk about the status of savings in this country. There are some interesting stats out there. 80% of Americans live from paycheck to paycheck. You have 60% of Americans who have less than $1,000 of savings in their bank account. 60 million Americans lack access to traditional mainstream financial products. They run into an issue and can’t qualify for mainstream credit. These markets of last resort are quite poor.
Our entire platform has been focused on providing fair credit access to those consumers. We do that in partnerships with banks. They originate the loans. We provide all the term keep and end-to-end servicing so that they could fulfill that product.
The product is structured in a way that should rebuild credit. We then work to bring them to mainstream financial products over time. We have grown rapidly over the five years that I’ve been a CEO.
We are quickly morphing it into what would be the digital financial business destination for the everyday American. We want to move beyond the credit product to be a more wholesome banking services platform where they can run about their daily life and get the services and the product they need to rebuild their financial health.
Sramana Mitra: Where you stand today, it sounds like a two-sided marketplace.
Jared Kaplan: Where it stands today, a bank is by far the best medium to originate credit products. Large banks can do this by themselves, but thousands of smaller banks just don’t have the internal knowledge to acquire customers online, to use alternative data, to understand who has the willingness and ability to pay, and to build proprietary technology to make all this work in real-time.
That is where we come into play. We partner with banks and provide this turnkey platform. It allows them to originate with the customer and do what they do best, which is the regulatory and compliance oversight. We can power their model. It creates the best go-to-market product out there.
Customers love us. That is one piece that we love to talk about. It doesn’t matter what I say; it matters what the customers say. We have some of the most fantastic customer service ratings that you have ever seen online. Don’t take my word for it. Go to the Better Business Bureau or Google.