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How One Lender Uses Argyle’s Two-Step Process to Fortify Underwriting & Increase Conversions

Measurable Successes: With Argyle, the lender’s application conversion rate has grown to 85%.

The Background

Niche Loans for a Niche Group

As a benefit of their service to the government, U.S. federal employees are eligible for special low-cost, fixed-rate personal loans. These loans are especially attractive to federal employees with low credit scores, who would otherwise have trouble accessing a loan with favorable terms. They are a sound, convenient option for federal employees facing unforeseen financial hardships such as car or home repairs.
One lender specializing in federal employee loans stands apart from the competition by offering its users, including United States Postal Service workers and military personnel, always reasonable, worry-free repayment plans, total discretion to spend the loans as they choose, and not requiring a credit check. The lender also bills itself as having a particularly fast and easy online application, approval, and disbursement process, including same-day funding—a promise that was difficult to live up to at first.

The Problem

Friction All-Around:  In short, inefficiencies were high and conversions were low.

In reality, the process was slow and cumbersome. 
To qualify users for a loan, the lender needs to determine:
  • If they are actively employed by the federal government
  • How much they make
  • If they are who they say they are
Historically, that meant requiring users to fill out a lengthy digital form and upload a recent pay stub, which the lender would use to verify their employment and income data and personal identity. 
The workflow was clunky, time-consuming, and full of friction for users, resulting in high application abandonment rates. The lender’s operations team was also burdened, as they had to: 
  • Manually review the pay stubs, 
  • Re-engage users via email when the verification process was complete. 
  • Or, ask users to fill out all of the necessary employment and income information themselves (data that would be unverifiable—a risk the lender was not willing to take).

What they needed was trusted information plus a seamless user experience to improve conversion.

The Solution

A Continuous Data Gateway

To remedy their conversion problem and ensure the fidelity of their data, the lender partnered with Argyle. Now, users grant the lender practically instantaneous access to the robust, real-time employment data stored in their online federal payroll accounts, enabling: 
1. Income Verification: Users simply select their employer from Argyle’s comprehensive database and enter their login credentials like they would at work. With the connection made, Argyle acts as a data transfer agent on the user’s behalf, transmitting the employment and income information the user consented to sharing.
2. Payment Distribution: Argyle also enables the lender to offer automatic pay allotment setup. Previously, before the lender could disburse funds to an approved user, they had to ask the user to route an agreed-upon portion of their upcoming paychecks to the lender as repayment and then send proof of the allotment in the form of a screenshot—a cumbersome ordeal rife with clicks and toggling. Now, with Argyle’s ability to automate direct deposit updates, the user can consent to the allotment with one click, saving both parties time and hassle, and making it easier for the lender to fulfill their same-day funding promise.

The Results

Climbing Conversions

Argyle reduces overall workflow friction, making it easier for users to complete their loan application. For the lender, that has translated to an 85% conversion rate—a significant improvement from their pay stub days.

Trusted, More In-Depth Data

Argyle connects directly to the employment data source, providing consent-based access to up to 120 rich data fields. As a result, the lender is now able to view and consider a trove of user information they weren’t privy to when pay stubs formed the backbone of their verification process, including:
  • Real-time employment status (active or terminated)
  • Hire date and tenure
  • Payout information
  • Gross and net income
  • Name, birthdate, and address (anti-fraud protocol)
  • Bank account and routing numbers (know-your-customer check)
With a more comprehensive understanding of their users’ employment data and income level, the lender is empowered to make faster, better, more confident lending decisions. That means fewer qualified users are turned away and fewer users are approved for loans they can’t afford, lowering their risk of default. 

Less Time to Decisioning

By making the user experience more seamless, and eliminating the need to perform pay stub verifications, Argyle also increases speed to approval and funding. In turn, Argyle is creating efficiencies that will help the lender underwrite more applications and scale over time.

The Future

Looking to New Specialized Markets

Argyle is also opening up opportunities for expansion. Because Argyle’s coverage extends far beyond federal employers, the lender is considering branching out to serve other niche communities like gig economy workers—a group whose employment data has historically been challenging to verify. By leveraging the power of Argyle, which covers 95% and counting of the U.S. gig economy, the lender is exploring an expansion of their target audience, a move that could create more potential for growth.

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