Galileo Targets Underbanked Consumers With Secured Credit Options

Galileo Financial Technologies introduced a credit offering aimed at underbanked/underserved consumers.

Secured Credit with Dynamic Funding is designed to simplify the secured credit process, making it easier for consumers to manage debit and credit accounts, while also reducing lenders’ risk by backing credit with secured deposits, according to a Wednesday (Sept. 25) press release.

“With more than 45 million Americans either credit unserved or underserved, the need for secured credit is high,” the release said. “Traditional secured models have long been plagued with complexities around where consumers want to use their funds.”

Consumers also face the dilemma of keeping their cash in their demand deposit account (DDA) to be used with their debit card or in a collateral account to use as secured credit, according to the release. Dividing these funds puts consumers at a disadvantage when they try to build credit.

“The Galileo Secured Credit with Dynamic Funding solution resolves those complexities,” the release said. “By automating the movement of funds between accounts, customers are empowered to manage all their money in one single account that powers both debit and credit transactions.”

The solution removes the need for consumers to manually transfer funds between collateral and DDA accounts when they make larger purchases. Instead, they can manage a single “available to spend” balance, per the release.

The PYMNTS Intelligence report “Modular Design: Can Composable Banking Find Favor With FIs?” found that composable banking provides a solution for traditional financial institutions rethinking their strategies as younger consumers value personalized financial services over the one-size-fits-all offerings.

Composable banking, PYMNTS wrote Wednesday (Sept. 25), “emerges as a critical solution, enabling these institutions to mix and match services for a more adaptive and customer-centric approach.”

Many traditional lenders have trouble modernizing because of outdated technology, with 53% of bank executives citing technology debt from insufficient upgrades to core systems. Composable banking promises a path forward, letting traditional banks integrate competitive solutions through an API-driven framework.

This modular approach allows for seamless integration of new services while protecting the integrity of existing systems. Banks can selectively employ innovations tailored to customer preferences, ranging from instant payments to fraud protection.