20 May, 2019
PR’s Popular sharpens digital focus

The digital lending arm of Puerto Rico’s biggest bank says focusing on just one high-potential market and fine tuning the customer experience has fueled growth

By Katie Llanos-Small


Optimizing customer journeys and simplifying risk criteria has helped a Puerto Rican digital lender to grow its portfolio of personal loans.

Eloan, which styles itself as the fintech arm of Banco Popular de Puerto Rico, relaunched last year after extensive market research and a tech stack overhaul.

Now it receives around 80,000 loan applications each month. Eloan boasts an all-digital credit process, but aims to maintain a human touch, offering phone assistance to the approximately 40% of customers that need it. 

“Not all of them need our help through the whole process, some of them just have a specific question,” said Mariel Arraiza, managing director of Eloan.

Perhaps surprisingly, the digital lender’s main customer base is not millennials. Arraiza says that by focusing heavily on the customer experience on its website, the lender has been able to attract a wide range of clients.

“The average age of our clients is above 40, and we have clients in their 90s. We’re very proud of that, it shows that we have made our online processes truly simple.”

In a bid to further streamline the loan application process, Eloan is studying its credit risk criteria, with the aim of understanding what indicators are most successful in predicting defaults.

“We’re analyzing historical data and looking at what might have happened. We’re looking at different attributes to work out which elements are the best indicators,” said Arraiza.

Digital marketing efforts and user experience research have been critical to growing the loan portfolio, she says.

“Business intelligence isn’t just credit risk criteria, but also what it is that makes a client apply for a credit, how they navigate our website.”

See also: Brazil’s C6 Bank preps for commercial launch


Digital original

Eloan is one of the US’s original digital lenders, having started business in the late 1990s. Banco Popular de Puerto Rico acquired it in 2005 and expanded its portfolio of auto loans and mortgages. Ten years later – with the fintech market having evolved dramatically – the bank decided it was time to rethink its strategy for Eloan.

“We weren’t even sure if we’d offer credit cards or personal loans,” said Arraiza. “We spent a long time speaking to customers, understanding our audience, niche and products.”

The team chose to focus the relaunched bank on personal loans, seeing it as a segment that offered the biggest room for growth. Just 7% of the clients surveyed had personal loans, compared to 63% with credit cards and 30% with auto loans.

Eloan uses Amount, a banking software platform developed by US tech company Avant. While Avant also offers personal loans, that company’s focus on “near prime” borrowers means it is not a direct competitor to Eloan, said Arraiza.

“They target a credit profile that’s lower than ours,” she said. “So that means that the loans that we decline, we are able to refer to Avant – and we gain a referral commission as part of that.”

Eloan is considering expanding beyond personal lending. However, it is taking a cautious approach given economic conditions.

“We are quite advanced with new products, especially credit cards and checking accounts. But we want to be cautious as we’re possibly entering a recession. We’re cautious on the US economy.”

Mariel Arraiza is speaking at the Fintech Americas annual conference in Miami on May 30 and 31. iupana readers are eligible for a 10% discount on tickets by using code IUPANAGUEST. Click here for more information and to register.

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