SAN FRANCISCO, Sept. 11, 2017 /PRNewswire/ -- LendUp, a socially responsible financial services firm for the emerging middle class, was selected as a finalist in the Social Good category of Fast Company's 6th annual Innovation by Design Awards. The program honors the most innovative and disruptive design solutions created to resolve today's most challenging issues. Finalists were selected from a record number of more than 2,500 international submissions across 13 categories. Other honorees include Airbnb, Ikea, Levi's, Mattel, Spotify, Target and other powerful brands; IDEO and other leading edge design firms; and disruptive institutions and companies like Away, Facebook, Google, Harvard, MIT and Watson.
"We believe there are two types of financial products: chutes and ladders. Ladders help you up, chutes push you down. We've used design to create loan and credit card 'ladder' products for the more than half of Americans who've traditionally been shut out of mainstream banking due to poor credit or income volatility," said Sasha Orloff, co-founder and CEO of LendUp.
According to Fast Company, the award—one of the most sought-after in the design industry—is based on seven core factors of innovation: functionality, originality, beauty, sustainability, depth of user insight, cultural impact and business impact.
Studies have shown that 56 percent of Americans don't have access to traditional financial services due to low credit scores or thin credit files1, and nearly half of U.S. families don't have enough savings to cover a $400 emergency expense2. As workplace trends shift from careers to jobs to the gig economy, 40 percent of Americans blame irregular work schedules for volatile monthly incomes, with paychecks sometimes varying by more than 30 percent3. But while income isn't guaranteed and steady, monthly rent, car payments, phone bills and groceries are a constant factor. And the average bank overdraft fee has an APR of 5000 percent, costing Americans billions each year4. Overall, having poor credit can cost a person more than $250,000 over their lives in extra fees and expenses5. So far, LendUp has saved borrowers $130 million and helped them improve their credit scores by hundreds of thousands of points.
The LendUp Ladder is a system designed in-house—just like all of LendUp's technology—that aims to help customers improve their financial health. As borrowers take financial education courses and pay their loans on time, in eligible states, the LendUp Ladder gives borrowers the chance to:
- Lower their APRs over time.
- Increase their credit limit.
- Increase their credit score: 90 percent of active two-year LendUp customers take credit-reporting loans, and have a 62 percent likelihood of a 50-point Vantage score increase.
- Save money: LendUp has saved customers $130 million in interest and fees.
- Improve their financial literacy: more than 1.6 million courses have been taken on our website.
Given that 98 percent of LendUp customers access the company via mobile, design is central to the success of the LendUp Ladder. A user-centered approach—including hands-on research with borrowers and partnerships with world-class behavioral science organizations—allows the company to identify first-of-their-kind opportunities to improve borrowers' financial health.
For example, LendUp's design approach—a rigorous process involving hours of direct communication with users and the incorporation of core principles of behavior economics—informed one of the company's most popular features: a flexible payment system allowing customers to shift the payment date of their loans by a handful of days to accommodate other expenses. This saves LendUp customers thousands of dollars in overdraft fees annually, while furthering the company's mission of providing more Americans with the financial products they deserve. The company has also carefully embedded educational tools, to make it seamless to take courses and earn points toward more credit with LendUp, essentially gamifying the process for borrowers of improving their financial health.
"We're jazzed to have made this distinguished list of companies whose design is considered among the best in the world, and we're proud to be honored for the impact our product is making on Americans through design," said Shane Berry, Head of Design at LendUp. "As a company whose mission is to provide anyone with a path to better financial health, we understand first-hand how important design is to user adoption, and we've seen the impact ours has had on countless borrowers' lives."
LendUp is a socially responsible online lender on a mission to redefine financial services for the emerging middle class—the 56% of Americans shut out of mainstream banking due to poor credit or income volatility. It builds technology, credit products and educational experiences that haven't existed before for this consumer segment, which includes more than 131 million Americans.
1) Prosperity Now (formerly the CFED)
2) Federal Reserve
3) The Aspen Institute
4) Pew Trusts
5) Credit Builder's Alliance