Credit FAQs

In many lending businesses, underwriting is seen as the engine of profitability — the place where decisions get made, risk gets priced, and growth is controlled. But as portfolios mature, something interesting happens: underwriting’s impact on long-term value starts to plateau. The real leverage shifts to how you manage the customers you already have. At Ensemblex, we’ve seen this pattern play out repeatedly across fintechs and neobanks. The fastest-growing firms learn to tr

Off-us data has transformed how lenders think about risk, growth, and competition. But like any powerful tool, it’s easy to misuse. In our work with clients, we’ve seen three common pitfalls — and the practices that can help avoid them. Pitfall 1: Misinterpreting Benchmarks Looking at competitor performance is incredibly valuable — but dangerous if not translated correctly. One lender assumed higher rates would automatically mean worse performance. Instead, benchmarking revea

Lenders know their own portfolios inside and out. But when it comes to growth, risk management, and product strategy, the smartest players don’t just look inward — they look outward. “Off-us” data — information about customer behavior and lending performance outside a company’s own book — is becoming a critical lever for success. Here are a few ways we’ve seen lenders use off-us data to sharpen decisions: Benchmarking Performance One lender in Asia used bureau data to compare

For many financial services companies, lending is the next big step. Payments, deposits, and other services create a strong base, but credit creates a large, profitable business. The challenge? Well, it’s credit. Not just another product feature, a mismanaged credit product can sink a business. One solution is to move very slowly, but that has its own costs: wasted runway, time, and opportunity. At Ensemblex, we know that credit and fast growth are compatible under discipline

We get the question almost every week—from Series A founders, Heads of Lending at established fintechs, even board members. They’re usually questioning if they can wait: wait until they’ve raised more capital, collected more data, or even wait to see if they can stem a rising risk crisis themselves. An Executive Risk Advisor (ERA) is an investment, and our clients want to make it judiciously. Well, the answer is straightforward. We’ll get into common hesitations and our advic

Years ago, while running at a subprime lending operation, we used to offer customers the option to receive their credit card via standard mail or pay $25 for expedited delivery. It was meant as a simple revenue boost. Then, when we looked at the default rates for both populations, we saw that customers who chose to pay extra to expedite their card delivery were significantly higher risk. The urgency to receive the card revealed something deeper about their financial situatio

Over the past decade, easy capital, VC expectations, and aggressive customer acquisition targets led many fintechs to pursue scale with a “growth at all costs” mindset. Too often, at the expense of underlying credit performance and profitability. As interest rates have risen and funding tightened, lenders across emerging markets are now facing a stark new reality: growth only matters if it generates durable unit economics. At Ensemblex, we’ve helped several fintech lenders na

Many early-stage lenders hesitate to test new product ideas because of the perceived expense. That's a shame, because great testing doesn’t require massive fixed investments. It's often possible to get the feedback and data that you need without investing in infrastructure. If you're testing brand perception, for example, polished execution does matter, and you'll need to build some infrastructure to get that feedback. But when you're probing interest rates, risk response, o

We recently worked with a fintech trying to increase the profitability of their loan product. The obvious lever: price. Lower the interest rate, increase uptake. Raise the interest rate, increase the interest income, but volume takes a hit. Econ 101. So, this lender ran tests: increasing or decreasing the interest rate 100 bps for different groups. The results were underwhelming, with customers barely responding to the new interest rates. This puts the lender in a frustrating

Running tests has technically never been easier. With highly configurable back-end tech and sophisticated data analysis tools widely available, even early-stage lenders with small teams can run a sophisticated testing program. The ease is a double-edged sword though, as it's also become easy to drown your insights in noise with sloppy testing. To make sure testing brings meaningful results, follow these four principles. 1. You need a learning agenda. And a budget, too. There