The fintech sector has been beset with some spectacular failures over the last few years. Once promising firms that raised billions in capital and promised to revolutionize the banking industry have crashed and burned, annihilated by their own hubris. Many of these fintech companies seemed to be led by executives who were apparently high on their own supply of nonsensical utopian jargon and catchphrases. Concepts like microlending, community sustainability and NINJA loans, which were once staples of the cutting-edge fintech community have turned out to be, to paraphrase Warren Buffet, weapons of financial mass destruction.
A wiseman among fools
But not everyone in the fintech industry has been swept away by mass delusions and the madness of the cloud crowd. David Zalik ranks among the more sober practitioners in an industry overrun with pretension and megalomania. Zalik is the founder and CEO of GreenSky Credit, a company that has been revolutionary in its absolute refusal to follow any of the crazy trends that have consumed fintech over the lasts 10 years.
Rather than attempting to burn the lending industry to the ground to pave the way for completely new institutions to rise from the ashes, Zalik recognized that the best way to make money within the millennia-old lending business was to use technology to allow more of what has been proven to work all along. And that is exactly what GreenSky Credit has done.
The company uses one of the most frictionless apps ever devised for lending to allow point-of-sale retail customers to get truly instant loans for amounts up to the low six figures. While this is far from a revolutionary concept, the real genius in GreenSky’s business model lies in the fact that Zalik has found situations where these loans are creating tremendous value. In particular, GreenSky helps homeowners who otherwise could not complete their big-ticket remodeling projects to do so.
Most of these customers will see large gains in their home’s value above the cost of the projects themselves. And this built-in value creation means that almost 100 percent of GreenSky loans have been paid back in full, making the company’s lending partners trip over each other to get GreenSky business.