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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

In short: Yes, we can. But not without you. Potential clients, especially in emerging markets, often ask us how well we understand the peculiarities of their market. It’s a good question. A successful model is built for the context in which it will operate: the unique customer dynamics, regulatory constraints, and data ecosystems. Otherwise, while it might look attractive in testing, it’s likely to cause headaches in production. We’ve now worked on most continents (we’re stil

Every credit card application flow will include some sort of bureau data request, often called a credit "pull". There are multiple kinds of credit pulls: "hard" and "soft". What type you use and when may seem like a subtle difference, but, as is a theme in lending, nuances can have outsized impacts. How and when you pull credit will impact your conversion, customer experience, and risk management. First, at a technical level: Soft pulls give you access to a consumer’s credit

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

Do you want to accurately and consistently segment risk, therefore enabling your entire credit strategy? Then yes, you need to monitor your model! We see robust monitoring save our clients real money all the time: A shadow scoring test flagged PSI anomalies arising from a difference in a vendor's data at month-end (a quirk that wasn't visible in the development data set). We were able to make adjustments to the model in production. A live model suddenly received drastically d

Same form factor. Very different infrastructure. They look identical in-hand, but credit and debit cards are very different on the back end. Prepaid cards are stored value products. (The customer is spending their money.) Credit cards are revolving loans. (The customer is spending your money.) From the infrastructure to the required day-to-day management, they're entirely different products. Some vendors blur the lines in their marketing, making it seem as if you can build a

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

"If it ain't broke, don't fix it." Lenders often push back when we suggest exploring a new model build. It's fair—model builds require resources, and it can feel silly to fiddle with an underwriting model that "works," especially if origination volumes are on track and losses seem manageable. But at Ensemblex, we know that "works" often means "leaves money on the table." What Does It Mean for a Model to "Work"? In technical terms, a credit model is effective if it "slopes ris

Launching a credit card (or other lending product) can make you feel like you're spread pretty thin. There's a myriad of vendor, partner, and infrastructure decisions to make, and all of them are consequential. You're juggling a lot: Searching for a sponsor bank. Writing the credit policy that will define how your first loans are made (and how your first returns will look!) Convincing debt providers to take a chance on you. Contracts. So many contracts. Assembling the tech st