vancity
Our economy relies on access to credit to run smoothly. Personal credit scores determine who can access credit, but these scores do not fairly represent everyone. What reliable, alternative methods work well to provide equitable access to credit?
Case Study Context
Credit scoring is an important function within the financial services industry and has existed for over 100 years. Creditors rely on credit bureaus, like FICO and Equifax, to help them balance risk. The systems used to assess who is ‘worthy’ of credit were built to protect creditors, leaving large market segments underserved by traditional lenders because of their score. Consequentially, these underserved consumers are more likely to get trapped in payday lending cycles, pushing them into unmanageable debt.
This case study provides an overview of the design strategy approach used to address challenges in credit products, programs, and systems.
Work was conducted for Vancity, a member-owned financial co-operative headquartered in Vancouver, British Columbia. Vancity works to improve the financial well-being of its members while at the same time helping to develop healthy communities that are socially, economically and environmentally sustainable.
Design strategy for creative credit
Challenge
“How might we rethink our products and services to provide greater access to credit?”
Traditional credit scoring methods and lending practices are not serving millions of deserving Canadians. Approximately 15% of Canadians are underserved, according to Canada’s Financial Sector Framework Review conducted in 2016.
True to its promise of ‘people before profits,’ the organization tackles systemic challenges within the communities it serves. The rise of consumer household debt and specifically the increased reliance on predatory payday lending services is concerning.
To explore alternative credit scoring methods, practices, and product development, I launched a comprehensive set of programs to develop differentiated credit products and services. With these programs in place, we set out to uncover what possibilities technology, partnerships, and service design could do for the community.
approach
Using a human-centric approach, a series of programs were used to research, design, and test changes to products and services. Stakeholder engagement and program oversight were critical elements to ensuring implementation was fluid across teams within the company and the branch network.
discovery
Research initiatives were launched to gain a deeper understanding of the alternative credit landscape and the customers within this space. Mapping the options and financial implications on the unbanked and underbanked, we uncovered trends impacting the financial wellbeing of recent graduates, entrepreneurs, those in need of credit repair, and immigrants and refugees.
