The global pandemic ravaged the financial industry.
Many banks naturally feared the prospect of losing money to costly and unreliable loans, so they retracted financial aid which led to businesses and individuals who needed it most to also take a hit.
Some banks, like Customers Bank, however, leveraged their hybrid banking model and partnerships with fintechs to expand consumer lending, while intelligently managing risk throughout the crisis.
With continued growth and becoming one of the top Paycheck Protection Program (PPP) lenders, Customers Bank is safe to say that not only did they survive during the pandemic, they thrived.
On this episode of Leaders in Lending, Customers Bank’s Vice Chairman and Chief Operating Officer, Sam Sidhu enlightens us with the bank’s vision and strategy that lead to their enormous success in the market.
Focus on FinTech Partnerships
Banks and FinTechs have a mutually beneficial relationship. With strong financial backing affiliations, FinTechs can more easily support their partners by innovating their systems to excel in a digital industrial environment.
Customers Bank invested in this relationship early which made it easier for them to step into the digital personal loan business—a world that became essential in a digitally-reliant, financially-fraught, post-pandemic culture.
Make data-driven decisions
When Customers Bank partnered with Upstart, they were looking for a company that would help them gather and analyze data to better predict risk.
This became an integral part of the bank’s growth during the pandemic.
Upstart’s predictive models empowered Customers Bank’s decision to provide over 400,000 small loans to their customer base, skyrocketing them to the top of industry performance.
Show up for consumers during tough times
Customers Bank saw an opportunity to support consumers and small businesses when legacy banks began limiting access to necessary loans.
During this time, according to Sidhu, the bank began giving out a multitude of small loans which radically expanded their customer base and loyalty.
While traditional banks failed their customers, startups like Customers Bank took a leap of faith and provided fundamental services at a desperate time.
Approach investments with bravery
Like Warren Buffet famously stated, be “fearful when others are greedy, and greedy when others are fearful”.
Sidhu claims that Customers Bank’s success was due in part to their courage to lead with strong FinTech partnerships and direct consumer lending.
They identified a gap in their market, took a calculated risk, and leapt. Customers Bank’s success story is one that reminds us to provide and innovate during times of crisis.
