Welcome to The Free Toaster!
Every week, we’re dishing out a free newsletter for marketing pros at banks and lenders. Inspired by the free toasters banks used to hand out to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers—minus the bread crumbs.

The One Takeaway

With MoneyLion’s entry into the hosted model business, they join established and scale players like Credit Karma’s Lightbox and Experian’s Activate, along with players like NerdWallet, Credit Sesame, WalletHub and others. The targeted affiliates category is getting crowded and it’s not clear how these platforms are different from one another. That’s because they don’t share much about their feature sets publicly.

News

(9/17) TransUnion and MoneyLion team up to offer personalized lending products by combining TU’s data with MoneyLion's distribution platform. [TransUnion]

(9/22) Donald Trump is proposing a 10% cap on credit card interest rates, which feels like a policy straight out of Bernie Sanders' playbook. While it might sound like a win for consumers, we all know where this heads. Rate capping limits credit to the most vulnerable segments, like we saw in Illinois when similar caps were imposed. Ironically, Trump, who’s criticized Kamala Harris for price control ideas, seems to be treading down a similar “controlling” path when it comes to credit cards. (WSJ Opinion)

(9/24) The Justice Department is suing Visa for monopolizing the debit market, accusing it of stifling competition through exclusionary practices and excessive fees. Visa, which handles over 60% of U.S. debit transactions, allegedly uses its dominance to block competitors and punish merchants who use alternative networks. This lack of competition leads to higher costs for consumers, and Visa is accused of partnering with would-be rivals to prevent them from innovating. The lawsuit aims to restore competition in the debit market, a vital part of the U.S. economy. [DOJ]
(To learn more, Rex Salisbury shared some good insights on this. Only 15 minutes and worth a listen)

(9/25) Klarna’s CMO, David Sandstrom, revealed that while AI is powering small campaigns, don’t expect AI-produced Super Bowl ads just yet. Klarna uses Generative AI to handle mundane tasks like translations and ideation, freeing up its marketing team for bigger creative work. While campaigns like their Shaquille O'Neal (or "Shaquille O'Deal") ads are human-driven, Klarna is fully embracing AI for cost-effective smaller campaigns like Back to School. [tech.eu]

(9/25) Oportun is selling its credit card portfolio to Continental Finance as part of its strategy to boost profitability by focusing on core products like personal loans and its Set & Save™ savings tool. The sale, expected to close by November 10, 2024, is anticipated to contribute $2 million to Oportun's Adjusted EBITDA in 2024 and $11 million in 2025. [Opportun]

(9/25) Galileo Financial Technologies announced its Secured Credit with Dynamic Funding, a way to help underbanked consumers manage debit and credit in one account. This removes the hassle of moving funds between accounts. It's a win for lenders too, with the credit backed by secured deposits, reducing risk. Galileo's offering is designed to simplify credit building while empowering financial institutions and fintechs to offer more flexible, user-friendly services. [www.galileo-ft.com]

Interviews of Interest

Depending on the week, we’ll either publish our own interviews with industry experts or spotlight other interviews we find interesting.

This week, we recap a chat between Pagaya’s Co-founder and CEO Gal Krubiner and Rahul Jindal from Autonomous on September 13th, 2024.

Pagaya is a fintech company that operates at the intersection of lenders and institutional investors. It provides a white-label solution, working behind the scenes with major lenders like Klarna, SoFi, and U.S. Bank to help them approve loans for customers who might not fit their traditional credit criteria. Using advanced AI and machine learning models, Pagaya analyzes data from these lenders to extend loan offers to borrowers who were previously declined.

Interview Takeaways

• Gal Krubiner is feeling upbeat about the economy.

• He sees healthy demand from institutional investors in Pagaya’s asset backed securities.

  • Spreads are tightening, meaning investors are shelling out more for the same assets. And the buzz isn’t just around top-tier, low-risk tranches—there’s growing interest in the riskier junior ones too.

  • Krubiner notes that Pagaya's latest asset-backed securities (ABS) sale had “the cheapest cost of capital since 2022,” with high demand even for riskier parts of the deal.

  • For Krubiner, the signs are clear: lower delinquencies and strong investor demand paint a much brighter picture of the economy than what many might think.

Counterpoint to consider: TransUnion published their August outlook which highlights “serious delinquency rates increased for all products except mortgage”. Of course the devil is in the details. Make sure you’re comparing apples-to-apples. Products matter, origination vintages matter, etc… With that said, Krubiner seems to have a positive outlook for the future.

Takeaway: Marketers need to collaborate closely with risk teams to build a unified view of the economy and consumer trends.

Quick note from our sponsors

NMG and Fiat Growth are excited to sponsor this newsletter, delivering fintech marketers actionable insights and strategies to drive efficient, cost-effective growth. Together, we’re committed to supporting companies as they navigate data-backed decision-making, strategic partnerships, and marketplace success.

Premium Data

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We're actively developing this feature, and the first 50 subscribers to The Free Toaster will receive lifetime free access to the dataset. 

Our intention is to track the ads the biggest banks and lenders display across customer acquisition channels like Meta, Credit Karma, Google, Experian, and NerdWallet.

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