Success in financial services requires that we understand the non-prime consumer
There cannot be a more misunderstood group of people in the financial services space.
Half the U.S. adult population have credit scores that fall below 700. They constitute the non-prime population. Below that line there's no guarantee that someone would qualify for the credit that they need. These households have no credit safety net when things go wrong. When they hit a crisis whether it be a job loss, medical bills, or some unforeseen expense, they have very little flexibility in their finances to absorb the shock of that financial event.
It is one thing to live paycheck-to-paycheck, but it is quite another to live paycheck-to-paycheck and have no credit card where you can place the cost of a car repair and pay it off over several months. There is a unique form of fragility that exists in the finances of households who have so little resilience.
There cannot be a more misunderstood group of people in the financial services space. People assume they are irresponsible, ill-informed, careless, or poor. But a group the size of half the you adult U.S. population cannot be easily stereotyped. There are vast differences amongst this population. There are opportunities for business growth for fintech and traditional financial services. There are those who have a savings and those who are drowning financially.
It's not enough to just understand the kaleidoscopic differences amongst the non-prime population. You can conduct market research against this group, but the questions themselves are often skewed. Often the surveys themselves are laden with assumptions and values that influence the data, which influences the insights…which set companies on a path that leads to operational decisions that rest on a faulty foundation.
After having talked to hundreds of non-prime consumers, conducted scores of focus groups, and poured over the market research of tens of thousands of completed surveys from the non-prime population, I understand what questions to ask, how to ask them, and what pitfalls to avoid. If you are interested in understanding the non-prime population better, would like consultation on how to reach this population effectively in market research, or would like support in creating innovative products for this population, contact me.