What is the future of consumer finance? Such a simple question, and yet impossible to answer in a simple way.

There is an answer, though, and it can be summed up in this basic statement. Consumer finance is changing at warp speed, and in ways, most of us have been unable to even imagine.

And all of that can be summed up in one word—digital. Virtually every aspect of consumer finance is becoming digital, starting with the digital channels companies are using to reach their customers.

Back in the day, direct mail and credit applications filled out in various lending institutions were the best way to turn shoppers into buyers.

Today, these two things are being crushed by digital apps, which can generate leads and convert sales in a fraction of the time that used to be required.

But the move to digital in consumer finance goes way beyond that. Digital solutions are changing the entire process of consumer finance, creating a unique experience to which customers are just beginning to adjust.

This change represents both an opportunity and a challenge. The opportunity part is obvious—the grown potential is exponential, although it is getting harder to maintain customer interest given how fast things are moving.

The challenge is to engage and convert these customers responsibly, and to develop new ways to cross-sell as well. Digital platforms require a variety of solutions that are perceived as exciting and compelling, and credit education must be part of the process.

Without customer education as part of the process, though, the risk becomes obvious. Taking on customers who don’t have the wherewithal or the background to use credit responsibly often ends up in default, and its important to winnow out these people as part of the process.

There are other challenges as well. Covid-19 is changing many of the rules of consumer finance on the fly, and successful companies will be defined to a large degree by their ability to recognize change and find new opportunities. That, too, is a part of the future of consumer finance, and it may end up being the most important element of all.