Sometimes, keeping things as simple as possible is the best way. Innovation is always alluring. But the old saying goes that when something is not broken, then it shouldn’t be fixed. Nowhere does this hold truer than in the area of finance where novel inventions have been blamed for massive destruction of wealth and usually consist of little more than creative ways of hiding risk.
These things reflect the view that David Zalik, the founder and CEO of GreenSky Credit, took from the very beginning. While Zalik is a technological genius who was able to develop one of the most novel and effective interfaces for the origination of instant point-of-sale loans, the business model of GreenSky itself is surprisingly simple.
The company went completely against the grain of the fintech zeitgeist, choosing to use technology in order to facilitate doing more of what was proven to work. While many of GreenSky Credit’s competitors were trying to reinvent the wheel then stuff it into square holes, Zalik was busy creating a way to instantly connect prime borrowers and willing lenders on deals where everyone gained enormously.
Unlike some of his utopian, starry-eyed peers, David Zalik, at heart, is a dealmaker. With GreenSky, he saw the opportunity to bring high-end borrowers who were in dire need of quick cash together with some of the most trusted lenders in the country, who are always looking to pad out their books with high-quality loans.
One of Zalik’s key insights was to allow these loans to be pitched by its retail partners. GreenSky can train its partners on the use of the lending interface as well as what kinds of customers to look for. This means that the majority of GreenSky customers are fully approved for loan amounts up to six figures, typically within just a couple of minutes.
The ability of these retail partners to offer cash-strapped but creditworthy customers huge instant loans has added billions of dollars in additional sales to these retailers’ numbers. At the same time, the borrowers themselves are typically doing home remodeling and other projects that ultimately add more value than the cost of the projects, allowing everyone involved to win big.