A few days ago, we had it at Newsletter already reported. Under the headline “Joonko now also arranges consumer loans”, it was announced that the financial portal Joonko now also offers consumer loans. Joonko wants to offer customers a fast, fully digital loan agreement without lock-in offers with guaranteed interest rates. Identification is carried out via Videoident, and the payment is made after a few days. The launch will take place with a fully functional product, but initially as an extended, open test phase with three banks: Consors Finanz, Solarisbank and SWK Bank. During the beta phase Joonko wants to generate product feedback, optimize the offer and connect further banks.
Now that the colleagues from FinanceFWD have taken up the news again last week, we have taken this as an opportunity to take another fundamental look at the lending business in Germany. Because: Joonko is not alone with this idea and there are already several providers who compete for the customers’ favour with a comparable, similar or identical offer. Joonko is well known and the Finleap plant can make up for the time lag – not least because of Corona.
A start was made at the beginning of the year with the distribution partnership already concluded with the magazine “Auto Bild”. “From the very first meeting it was clear that we share common values such as absolute customer focus and the desire for transparency,” said Joonko boss Carolin Gabor a few days ago on LinkeIn about cooperation. However, according to information from FinanceFWD, this is slow to materialise because car dealerships and registration offices remained closed. Joonko had to send part of the team on short time.
It remains to be seen how quickly Joonko can actually step on the gas with the new consumer credit product. With the investor Ping An from China and Finleap behind him, the omens for the comparison portal were not bad at the start. But the market for loans is already well occupied with German providers such as Check24 or Verivox. Whether these providers will really be put in fear with Joonko’s current products – as was the case at the launch of the portal? In the end, the customer decides!
And that’s what the team says:
It is generally good for the market that Joonko is positioning itself as an alternative to the heavyweights such as Check24 & Co However, with the first product, motor vehicle insurance, I primarily perceived significantly more startup media filter bubble eigenbuzz than actual product marketing. A brief research among my closer and wider circle of friends and acquaintances revealed a similar finding: hardly anyone knew Joonko as an actual insurance product/comparison product. It is a logical step to make the portal again beyond the peak when changing car insurance once a year. The credit comparison is therefore a supposed “low hanging fruit” and is very obvious. Similar to the insurance comparison, however, the market here is already highly saturated with different providers. It is a classic Red Ocean Market in which Joonko now moves in a new way.
Even 15 years ago, when I was with KarstadtQuelle Bank, a strong and leading player in the German consumer credit business at the time, CPCs/CPOs for online loans were extremely expensive. Since then, the situation has not really eased up in view of the many new portals and powerful intermediaries in the market. It is good for the banks when Joonko positions itself as a (more bank-friendly?) alternative to Check24 & Co and even better for the customer when new ways of credit checking are taken and more customers find access if necessary.
But all this is not possible without leads and thus without attention to the product, portal and a large selection of partners on it. This attention is achieved in the masses, however, precisely through tempting offers and many (expensive) ad campaigns. Exactly what Joonko excludes or where at least my “filter bubble” and I have hardly noticed the portal since its launch. I’m curious if this will change, because the constant marketing pressure of the existing players challenged by Joonko is enormous.
Lending by Fintech companies has increased rapidly all over the world in recent years, albeit to a very different extent from country to country. The reasons for this are the respective level of development of the economy and the structure of the financial markets: the higher the “national income” and the weaker the competition within the banking system, the more extensive Fintechs’ activities in the lending business. Moreover, Fintechs’ lending is higher where banking regulation is less strict. Fintech loans have been an alternative source of financing for companies and consumers for many years and can provide better access to finance for underserved customer segments. They can also increase the efficiency of financial intermediation. However, various bankruptcies and cases of dubious business conduct have shown that Fintech lending also poses some challenges for regulators.
Anyway, Joonko enters a well occupied market. It’s important that they take the right approach, and the car loan should not be the only one. Most consumers are using Fintech loans to restructure or consolidate existing loans, but some are also using Fintech loans for larger purchases, so more needs to be done. As always, it’s all about sophistication. Carolin Gabor, is super savvy, and has a good team. So it could succeed if you do it right. From the point of view, here again an attack on the established, that is bank or existing big Fintech players, like Check24, rather a tiring message.
What can you say? Spontaneously I thought: quite late to come around the corner with the topic, because it was somehow obvious and “low hanging fruits”. To which a) people have been needing money for months and the demand will surely increase and b) the bounty is not without and c) it is a completely standardized process. Does the market need another platform al a Check24 or Smava? Definitely. Whether the offers for the consumer will differ greatly in the end, I don’t think so. Joonko can score points in the customer approach, the UX, and in the end of course with offers, although the latter will be more difficult than the first two points. I think it’s okay if a Fintech like Joonko also offers loans. Does it knock my socks off? Somehow not.
I doubt a little bit if this is the revolutionary approach that makes the customer use Joonko instead of Check24 et al Credits and credit comparisons are commodities – different in detail, but all the same “soup” for the mass of customers. Details in the process like “when is the account view?” the customer anyway only notices when he is already “in the process” – will he come for that? -I think it’s the other way round, you can “lose” the customer in the process by adding unnecessary checks in the wrong place.
The promise of “less annoying SMS” may be good, but time will tell if you do need them to convert the “expensive” leads into a competitive market? I think the competition does not make it out of pure “desire for the annoying SMS”.
Anyhow, competition revitalizes business and the battle for customers becomes hard and expensive – but it has to be fought. Wish Joonko good luck and a long life. and smart ideas :-))