How can Stori balance the need for stricter credit checks to reduce risk with the goal of providing financial access to underserved populations?

Introduction

Balancing stricter credit checks with financial inclusion is a critical challenge for Stori. This trade-off involves weighing risk mitigation against expanding access to underserved populations. I'll analyze this problem through multiple lenses, considering stakeholder impacts, metrics, and potential solutions.

Step 1

Clarifying Questions (3 minutes)

• Business Context: I'm thinking Stori's revenue model likely relies on interest and fees from credit products. Could you confirm if this is the case, and if there are any other significant revenue streams?

Why it matters: Helps understand the financial implications of stricter credit checks Expected answer: Primarily interest and fees, with some additional services Impact on approach: Would influence the balance between risk and growth

• User Impact: Based on Stori's mission, I assume the underserved population includes those with limited credit history. Can you provide more details on the specific segments we're targeting?

Why it matters: Defines the user groups most affected by this trade-off Expected answer: Primarily young adults, gig workers, and recent immigrants Impact on approach: Would shape credit assessment methods and product offerings

• Technical Feasibility: I'm curious about Stori's current credit assessment capabilities. Do we have access to alternative data sources or AI/ML models for risk evaluation?

Why it matters: Determines the potential for innovative credit checking solutions Expected answer: Some alternative data used, basic ML models in place Impact on approach: Would influence the complexity of proposed solutions

• Resource Constraints: Considering the potential changes, I'm wondering about our team's capacity. Do we have dedicated resources for credit risk management and product development?

Why it matters: Affects the feasibility and timeline of implementing new strategies Expected answer: Limited dedicated resources, shared with other projects Impact on approach: Would impact the scope and rollout of any new initiatives

• Timeline Pressure: Given the competitive fintech landscape, I'm curious about the urgency of this initiative. Is there a specific timeline or market pressure we're responding to?

Why it matters: Helps prioritize short-term vs. long-term solutions Expected answer: Increasing competition, aiming for implementation within 6 months Impact on approach: Would influence the balance between quick wins and comprehensive changes