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Welcome to the eighth edition of Accrued: After Hours 🎙️! This weekly newsletter will provide you a short recap and the main takeaways of each episode from LoanPro’s Accrued podcast series on Fintech Confidential.

Hosted by Tedd Huff and LoanPro’s CMO, Colton Pond , Accrued explores fintech through the lens of lending with insightful conversations from experts and leaders across the industry.

Listen to the Accrued episodes on the following platforms:

Today’s newsletter will cover season 1, episode 8: Unlock the Power of Personal Loans with Happy Money’s Expertise w/ Joseph Heck .

In this episode, Tedd and Colton talk with Joe Heck, CEO of Happy Money, about how Happy Money uses technology to make personal lending and debt consolidation more human-centric.

Here’s what went down

A human-centric, digitally native approach to underwriting

Happy Money’s mission is “to develop and deliver affordable, accessible financial tools and services that empower people to use money as a tool for their happiness.”

Joe explains that one of the exciting ways that Happy Money is creating a “happier way of lending” is the “behavioral science” approach to evaluating consumers for financing.

“I used to be an underwriter at a credit union forever ago. The whole credit union mantra of like people helping people showed up primarily in the underwriting process and how that showed up was when a consumer came in, sat at your desk and told you about the situation and what they’re trying to do. As the underwriter, we’re meant to help figure out the right way to solve their financial problem. Mapping that digitally was really an interesting endeavor, and it was something that I think Happy Money got a really good jump on.”

Joe Heck

Happy Money’s team seeks to understand the ability and intent to pay by using real-time cash flow and other alternative data. Joe describes this human-centric approach being built into the company’s DNA, which helps them avoid adding a ton of friction to the application process and de-emphasize FICO, which often does not reflect a customer’s changing circumstances.

Understanding the connection between cash flow and a person’s stress levels, Joe emphasizes how Happy Money is designed to empower people to make informed financial decisions, which in turn helps to alleviate their stress.

“If we could help people drive more financially savvy decisions and help them understand their cash flow position, then they would ultimately have better outcomes and hopefully return and reduce their levels of stress, which also reduces risk on the loan asset as well.”

Joe Heck

Achieving market differentiation through strategic partners and product innovation

Building on the foundation of Happy Money’s human-centric approach, another distinct advantage, according to Joe, is their collaboration with ethos-aligned lending partners, credit unions. Joes explains that partnering with credit unions bolsters their ability to stay true to their mission, providing the necessary flexibility to prioritize individual needs.

Another way that Happy Money sets itself apart from other fintechs is through their proactive approach to product innovation. Joe provides a compelling example: a collaboration with TruStage to develop a product that assumes payments for customers during periods of instability.

Linking back to the profound effects of financial stress, Joe emphasizes that such circumstances drive their continued commitment to innovate.

“We’re now implementing a feature within our product that will reduce stress and arguably one of the most stressful events anybody could occur, like loss of job or loss of income. We’re bridging them for a period of time. It also pulls down the risk with our partners. So it’s a win for the consumer, it’s a win for us at Happy Money, and it’s a win for our credit union partners.”

Joe Heck

The future of fintech and consumer engagement

As Happy Money uses alternative credit models for underwriting, Joe highlights the unique value derived from how they gather information directly from customers. He emphasizes the importance of actively engaging consumers in the information-gathering process, illustrating the mutual benefits: customers gain a clear understanding of what they get in return for their data, ultimately building trust and cooperation.

When asked about the role of AI in fintech, Joe envisions it as a powerful tool for achieving personalization at scale. As Happy Money continues to grow, he views AI and other new technologies as enhancements to their already existing arsenal, which includes a robust dataset. Joe is excited to see how these tools will impact scale and efficiency, working synergistically with their established systems.

Looking ahead, Joe describes a vision for Happy Money that involves expanding services and support through strategic credit union partnerships. Central to their strategy is the continual question, “How do we engage the consumer and solve their problems?” Joe foresees the persistently investing in innovation and product development while maintaining their agility to adapt to swiftly changing market demands.

Key takeaways

Human-centric approach to lending. Happy Money prioritizes understanding the individual’s ability and intent to pay through real-time cash flow and alternative data, rather than relying solely on traditional credit scores like FICO. Having a deep understanding of a borrower’s circumstances can help spark innovative ideas on how you can reduce financial stress and create better outcomes for both borrowers and partners alike.

Strategic, ethos-aligned partnerships. Happy Money’s partnerships with credit unions play a crucial role in fulfilling their company mission. By finding partners that share similar values and objectives, Happy Money not only ensures accountability but also the flexibility for product innovation.

More consumer engagement. Joe underscores the value in using alternative credit models, highlighting that their true value lies in the relationships built with customers during the information-gathering process. By clearly communicating the benefits customers receive in exchange for their data, Happy Money’s approach fosters trust and cooperation.

Spencer McWilliams

Product Marketing Specialist