Think Finance

Think Finance

Formation	2001
Type	Financial Technology
Headquarters	4150 International Plaza, Suite 400, Fort Worth, TX 76109
Products	Cortex
Employees	181 (2016)
Website	http://www.thinkfinance.com

Think Finance is a company that provides technology, analytics, and marketing services to financial businesses in the consumer lending industry.^[1]

History

Founding

Think Finance was founded in 2001 in Fort Worth, Texas^[2] and was headed by Ken Rees who was President and CEO until 2014.^[3] The company is currently headed by Martin J. Wong, who has served as the company’s Chief Executive Officer since May 2014.^[4]

Growth

In 2014, Think Finance restructured its business by spinning off its consumer lending products portfolio into a new independent company, called Elevate. Following the restructuring, Think Finance’s business model changed to being a provider of analytics and technology services to third-party online lenders.^[5]

Products and Services

Think Finance’s main product is Cortex, a suite of technology and services which helps lenders market, originate, service and manage online loans.^[6]

Awards and recognition

In 2013, Think Finance was ranked #2 on the Forbes List of America’s Most Promising Companies. In its ranking, Forbes cited Think Finance’s innovation in "applying new technology to stagnant business models" resulting in growth that outperformed traditional banks.^[7]

From 2010-2015, Think was an Honoree on the Inc. 5000 List of the Fastest Growing Companies. Inc. Magazine noted the company’s 3 year growth rate of 216%, as well as surpassing $687 million in revenue in 2013. Inc. describes Think Finance as a company that “develops next-generation products for under-served consumers using a technology and analytics platform to bridge the gap between payday loans and credit cards.”^[8]

Industry Context

Outlook

Online lending is a rapidly expanding and evolving industry, growing from less than $1 billion in credit issued in the U.S. in 2010, to more than $12 billion in 2014, and an estimated $122 billion in 2020.^[9] While much of the capital used for online lending originally came from individual members of the general public, in recent years small local lenders, hedge funds, and the banking sector itself have added to the supply of money available for online lending, helping drive the expansion of the market at a rate of doubling its size roughly every nine months.^[10]

In May 2016, the U.S. Department of the Treasury issued a white paper focused on the future of the online lending industry. The report’s findings included the acknowledgement of the innovations and risks involved in the use of new data and modeling techniques, as well as the opportunity to expand access to credit to underserved markets.^[11]

The Department’s request for information supporting the white paper focused on the potential for online lenders to provide loans to subprime borrowers, whose access to credit can be limited.^[12] The most recent FDIC household survey found that 90.6 million Americans were unbanked or underbanked.^[13]

Challenges

The Treasury Department’s 2016 white paper noted a number of potential challenges facing online lenders and the fintech providers who partner with them, including the need for greater transparency around credit terms for borrowers and standardized loan-level data for investors, and the importance of credit models being exposed to less-than-favorable credit cycles.^[14] Other experts have also noted that the generally strong overall credit conditions which have thus far contributed to the industry’s success, and the importance of underwriting models being tested in an environment with higher interest rates or during an economic downturn.^[15]

Concern that U.S. regulation isn’t keeping pace with advancements in the financial technology industry has also led to legislative proposals to make it easier for fintech companies to innovate and help allay fears that they will move overseas to countries with more favorable regulatory environments.^[16]

Outdated banking systems have also proven to be a challenge for many lenders looking to offer online credit products using modern digital services; fintech providers have been credited with stepping in to help lenders meet that challenge.^[17]

References