Product Management in FinTech

As a PM at Earnest, one of the questions I’m often asked is how being a PM at a financial technology company differs from Product Management at a traditional software company. While in many ways the PM role at Earnest likens to the PM roles you’ll find at traditional Silicon Valley companies, I’ve also noticed a few key differences.

The Opportunity to Shape an Industry in a Big Way

Many people misconceive FinTech as slow-moving, as a consequence of heavy regulation. Having worked at Earnest, I can confidently say that nothing could be further from the truth. While indeed there exist more regulations in the financial space than in, say, mobile gaming, the industry is in its infancy and is ripe for innovation.

Take lending for example: retail banks are notorious for their atrocious UX and ancient business models. This means that with some thought one can deliver a product that solves real user pain points while innovating on both the client experience and the business model.

The perfect example of this is Earnest’s Precision Pricing — a feature only we offer. Let’s say you are trying to refinance your student loans. A traditional bank may provide 5-, 10-, 15-, and 20-year loan options. However, to a borrower, what matters most is not whether the loan is 15 years long or 20 years long; instead what really matters is the monthly payment (how much can you afford?) and the interest rate. Hence, instead of asking you to select a loan term, at Earnest we ask you to simply select your monthly payment on a slider. As you increase your monthly payment, we decrease the term length and your interest rate accordingly:

Now, you’re no longer restricted to rigid 5-, 10-, 15-, and 20-year options (where how much you pay every month is somewhat obscure). Instead, you can opt to pay exactly as much as you can afford, and we’ll adjust your term and interest rate to match — whether that means providing you with a 5 year loan, or a 7 year and 2 month loan.

A Business Mindset

One of the joys of working in FinTech is that you really understand and help drive all the decisions surrounding how a complete business works. Every product you offer, whether it’s student loans, a cross-border way to transfer money, or a new way for people to file their taxes, is an entire business on its own. As a PM in a traditional software company, some questions you may need to answer include:

• “What use case does my product solve?”
• “Does the user experience make sense?”
• “Can we implement it given our architecture?”

At Earnest, you’ll definitely need to have answers to all those questions, but you’ll also need to know:

• “How will we fund a new loan product?”
• “Are we using the right factors in determining the risk of a borrower?”
• “Can we even price this product competitively in the market?”
• “How should we structure the legal agreement with our clients?”
• “Do our customer service teams have the information they need to quickly respond to client requests?”

As a result, the breadth of business knowledge that you gain at Earnest is incredible.

Far More Stakeholders

In my previous job at Yammer, I worked closely with the Engineering, Design, Analytics, and Marketing teams. At Earnest, I not only work with those teams, but also with Portfolio Risk, Capital Markets, Legal, Credit Operations, Partnerships, Business Operations, Client Happiness, and Financial Operations. With so many stakeholders, the PM role becomes even more critical: after all, it is the PM’s responsibility to deliver a great product, and all these teams are essential to making that happen.

Details Matter

The stakes in FinTech are high: loan and transaction amounts can be large, and clients really care about their money. As a result, even the smallest decisions can have huge implications — time zones may make the difference between charging the correct interest and charging an inaccurate amount, and a policy detail chosen a year ago may determine whether you’re able to offer someone the flexibility to defer their payments the following year. With stakes so high, it really pays to think through the details and get things right.

In Summary

The FinTech industry is still in its infancy. As a PM, this is particularly exciting as there are opportunities to innovate not just in the user experience, but in the business model and the underlying technology (like automated underwriting). The stakes are high, every decision matters, and you learn a ton about wide-ranging aspects of running a business.