Where credit is due: Why we are so excited about the changing consumer credit ecosystem
Today, more than ever, Americans need access to credit. Credit is the gateway to broader financial empowerment, enabling individuals to build their financial identity, borrow money, and purchase assets like a home or a car. While the need for credit continues to grow, the majority of existing consumer credit products haven’t changed much in decades. Credit cards and consumer financing solutions look mostly the same today as they did in 2000. Meanwhile, traditional models for credit scoring are pretty limited in assessing true risk — especially for younger and underbanked segments. This has led to a fundamental gap in the market: An increasing number of consumers with insufficient credit to qualify for products that are not well designed for their core needs.
We believe that there is an important opportunity to reimagine the future of credit and the infrastructure that enables it. This includes the way that companies assess and underwrite risk as well as the way consumers build credit through everyday spending…without having to incur more debt. And it means rethinking the basic premise of loyalty, especially in a world where the value of rewards and the nature of affinity are changing rapidly.
These trends have underpinned several of our investments, including Bloom Credit (enabling access to credit data infrastructure), Canopy Servicing (modern loan servicing platform), Bumped (stock-based, card-linked rewards), Grow Credit (build credit through recurring purchases), and HM Bradley (next-gen credit card issuer). Together, these investments represent a broader theme: The need for new capabilities and new experiences that reset how consumers access, monitor and build credit.
New capabilities also make it easier for emerging players to enter the market and provide innovative, credit-based products. These products are no longer limited to banks. As we’ve seen with the explosion of Buy Now Pay Later (as well as the evolution of neo-banks), non-bank entities are increasingly adding accounts (and taking share) in a market historically dominated by traditional financial institutions. For banks, this represents a risk and an opportunity. The risk is obvious, but there is also an opportunity to differentiate by delivering new experiences that leverage an existing customer base and better cost of capital.
Recognizing this rapidly evolving market and our continued focus on emerging payments, we’re excited to announce that Barry Rodrigues has joined as a Senior Advisor to Commerce Ventures. Barry has a long and successful track record as an executive in consumer finance, most recently as CEO of Barclays Cards & Payments and CEO of Barclays Bank NA. In this role, he led Barclays’ US co-brand and digital bank businesses, their UK acquiring, point of sale finance and corporate card businesses as well as their German card and point of sale finance businesses . Prior to Barclays, Barry served as Head of Digital Payments and member of the Executive Management Team of the Global Consumer Bank at Citi. He started his career at American Express, rising to become President of the Global Network Services business. Barry will work closely with our portfolio companies as well as our team to identify new opportunities in payments and credit.