Banks have been in the lending business forever, but they’ve been slow to adjust to the fact that customers are no longer only relying on them to secure a loan.
With a rise in both well-planned and impulse purchases, people expect to be able to seamlessly access a loan when and where they want, at the point of sale. While banks are often simply too big to react to this consumer change quickly, more agile fintechs have been much faster to prioritize mobile-first POS financing. And now the banks are falling behind.
But have banks really missed the boat for implementing POS consumer financing? Banks need to recognize that fintech players are friends, not foes, in this new lending environment.
Traditionally, banks still hold the lead when it comes to financing options due to their cash supplies. However, an easy solution to connect their financing options with consumers at the point of sale is to partner with a fintech. In fact, fintech collaborations will help bump banks back on track to achieving successful POS lending solutions.
And in-store POS is important. While it’s mostly fintech companies conquering the online POS space, many customers continue to rely on physical stores and therefore need a consumer lending solution at checkout. In fact, 92 percent of all retail purchases are still made offline. Walmart is setting the benchmark for this consumer lending, in-store shopping experience: The multinational retail corporation recently partnered with Affirm, a fintech startup that provides consumer-friendly payment alternatives to cash and traditional credit. This collaboration allows customers to apply for a loan on their phone and check out as if it’s a regular purchase while still using their phone at the point of sale in any Walmart store.
Banks must adapt to changing times by offering seamless mobile loan applications and payments to ensure they keep their place in a competitive industry. To do so, many banks will have to acknowledge that not all fintechs are out there to challenge banking — but rather to create potential partnerships within POS consumer lending, which will position banks at the forefront of their space in a rapidly changing landscape.
