FintekNews is pleased to offer our weekly feature column 3 Questions. Each week, we feature a thought leader within a unique sector of fintech and ask them to answer just 3 questions for our audience in their vernacular. This week, we’d like to introduce you to Arad Levertov, CEO of Sunbit, a financial technology company that leverages data-driven, machine learning algorithms to help create fair, transparent and flexible financing options at the retail point of sale. Sunbit’s technology offers a sub-30-second application and approval process, and serves customers across the credit spectrum.
NAME: Arad Levertov
WEB ADDRESS: https://www.sunbit.com/
What does your firm do/offer within the fintech sector?
We’ve transformed the process of financing a brick and mortar purchase into something that’s simple, fair and painless for both consumers and retailers. While it seems like everyone else is directing their attentions online, we’re focused on innovation at the physical point of sale. Sunbit’s platform enables consumers across the credit spectrum to split their purchases – which can include both goods and services — into 3, 6, or 12 payments.
We knew it was important, for both businesses and their customers, for as many people as possible to be approved. We also knew it needed to be done without a long, cumbersome process. Our machine learning technology drives a straightforward, sub-five-second approval process that can serve 90% of customers — with fair and competitive rates. We don’t market directly to consumers (our brick and mortar retail partners are the ones bringing in the customers), so we don’t have the typical high acquisition costs that other fintechs have. That means that we can pass the savings along to consumers.
Our application process is simple: all you need is a drivers license, email address and phone number. These three things allow us to perform a soft credit check, which doesn’t impact the consumer’s credit score, and help us to determine the maximum amount we can approve the customer to spend with that merchant on that specific day.
The underwriting is driven by our own machine learning based credit model built specifically for short term, small dollar purchase financing — not by FICO scores. This means that we can tailor each offer to the consumer, and provide great options for splitting the purchase into a series of payments.
How do you feel consumers (or if more relevant for your firm – businesses) are adapting to the facet of fintech that your company operates within?
I don’t think consumers actually need to adapt to Sunbit. Americans are used to financing purchases. They finance cars, homes and education, among all sorts of other goods and services. We’re just bringing financing to smaller transactions like car repair, a veterinary visit or even buying a pair of glasses.
Keep in mind that the average American consumer has just over $400 in their bank account. So our solution really fills a need for the consumer facing an unexpected expense.
Our innovation is around leveraging technology while delivering on speed of transaction and ease of use. When you finance a car or a new living room, you might be willing to spend 30 minutes filling out paperwork. But when you’re buying new tires, the speed of the financing transaction is key. We don’t require a time consuming application process where customers have to share sensitive personal information like income or whether they rent or own a home. All we ask for is a drivers license, phone number and email address. This usually takes less than a minute. And because we approve 90% of applicants, the consumer’s risk of embarrassment or humiliation from being declined is nearly eliminated.
What are the biggest problems facing the fintech industry in the future?
Customer acquisition costs are still extremely high, and are a significant hindrance to fintech profitability. Acquiring customers is necessary: no matter how sophisticated a fintech company might be, it still requires customers in order for it be a viable business.
Even with technology-driven marketing analytics and tools, customer acquisition costs can be in the hundreds of dollars, particularly in spaces with stiff competition, like online consumer loans.
We designed our business strategically to eliminate the consumer acquisition costs. We partner directly with merchants, who do the acquiring for us. This produces a win all around: merchants have a great solution with which to offer their customers, who in turn can get what they need when they want it, at a fair rate; we’re able to grow our company with substantially lower capital requirements than many other fintech companies.
A FinTech veteran, Arad leads Sunbit’s Strategy and Operations. Arad was COO of Enova International, where he successfully managed a team of 700 people in the $800M business across Product, Marketing, Strategy, HR and Operations. Prior to Enova, he ran Operations and Systems Development at Intel. He was a Major in the Israeli Navy SEALs, and received an MBA from Duke University.