Giving credit its due: a key tool in building better financial outcomes

by Colin Walsh and Roger Van Duinen

Today our company, Varo Money, announced its first lending product, Varo Flexible credit. http://ow.ly/GixV308a6KD

We understand many companies offer lending products to consumers and what Varo is providing may feel, to some, like more of the same.

However, we believe it’s different. Varo was founded to help people achieve better financial outcomes: greater resiliency, less anxiety, more options. We see credit as an extremely important tool to achieving those ends.

Unlike many other digital lenders, Varo is starting with a relationship approach. We aim to earn our customers’ trusted primary banking relationship first. Through that, we will be able to provide access to the many financial products needed to achieve better outcomes more easily; flexible credit is just the first of those.

If that sounds a lot like banking to you, you are right.

However, we believe that today the traditional banking industry only serves those with lots of money well. Expensive, complex products pushed through aggressive “sales” channels (thank you Wells Fargo) and an almost complete lack of financial coaching or guidance is the norm. These practices make big banks among the most disconnected and distrusted brands in this country.

Varo’s human-centered design is all about making it simple and intuitive for everyone to make better financial choices and access their money real-time, whether that’s basic banking and payments, savings or credit.

At Varo, we have reached out to hundreds of consumers whose experiences have shaped our thinking about our product. Everyday we hear stories from them about their basic money challenges. Let us share with you one such story.

Sam, a customer relations agent at a big tech company, was living and working in San Francisco, one of the tougher cities in which to make ends meet. Like many, Sam had a roommate to make living costs more affordable. Unfortunately for him, his roommate broke their lease, leaving him on the hook for both shares of the rent until he found a new roommate. Covering his own end of the rent while paying off student loans was already difficult enough. Ultimately, Sam had to scramble at the last minute to borrow money to cover his roommate’s share.

Of course, Sam is not alone. From trips to the emergency vet, to anything-but-routine car repairs, to unplanned trips home, life has a way of surprising even the most diligent of savers. Helping people deal with both the cash shortfalls and the accompanying anxiety is what inspired us to create Varo Flexible credit.

It takes as little as $400 in unplanned expense to disrupt the financial stability of nearly half of all U.S. adults. Varo is here to help.

If you’d like to learn more, Roger and I invite you to visit us at varomoney.com.