What changed in this filing

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Item 1. Business

2024-03-15 compared with 2023-03-14 · 97 added, 161 removed, 115 unchanged (69% of the section changed)

Company Overview

We are a digital banking platform that puts our members’ financial goals within reach.

With intelligent borrowing, savings, budgeting, and spending capabilities, we empower members with the confidence to build a better financial future.

By intentionally designing our products to help solve the financial health challenges facing a majority of people in the U.S., we believe our business is well positioned for long-term growth.

With intelligent borrowing, savings, and budgeting capabilities, Oportun empowers its members with the confidence to build a better financial future.

We design our products to holistically address two of the most fundamental challenges to financial health and resilience - access to responsible and affordable credit, and adequate savings.

Financial Health in America

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Trends Report.

In addition, our research shows that while 90% of U.S.

consumers believe financial health is important, 57% of those consumers do not want to think about money.

Our digital banking platform is designed to address these societal issues with a comprehensive set of financial services that help people, even those who are not well served by mainstream financial institutions, access credit and automatically budget, save, and invest, without impacting their ability to meet daily spending needs.

By applying artificial intelligence ("A.I.") to automate their financial health, we believe we have a compelling suite of products and services that addresses the very real needs of the vast majority of people living in the U.S.

When presented with an unexpected expense they cannot postpone, like a car that won’t start when one needs to get to work, or a broken tooth that refuses to be ignored, most people lack adequate savings and will typically require access to credit in order to cover their immediate need.

Serving our Members' Financial Needs

Our members are among the hundreds of millions of hardworking Americans who are not well served by mainstream financial products.

We take a holistic approach to serving our members and view it as our purpose to responsibly meet their current capital needs, help grow our members’ financial profiles, increase their financial awareness and put them on a path to a financially healthy life.

We believe our strong Net Promoter® Score ("NPS"), 81, up from 79 in 2021 for our personal loans demonstrates our success in providing our members with effective and easy to use solutions.

Our members access our products primarily through our website, our mobile application, as well as through our partners.

Credit Products— Since our founding in 2005, we have extended more than $15.5 billion in responsible credit through more than 6.3 million loans and credit cards, and helping over 1.1 million people who came to Oportun without a FICO® score to begin establishing a credit history .

Oportun recognizes that while most everyone will face an unplanned expense or bill of one kind of another, there are more than a hundred million adults in the United States who Oportun estimates would struggle further because they lack access to responsible and affordable credit when they need it.

Many of these people are likely to be declined for any kind of loan or credit card from a mainstream financial services provider, like a bank or credit union.

Without access to credit, an unplanned bill of $1,000 or more has the potential to become a life-changing crisis for millions of people.

For many of our members, being unable to afford a car repair can lead to them not being able to get to work, which causes loss of income, and perhaps even significant financial insecurity for a family that will now struggle to make the most basic of ends meet.

This occurs daily across the country.

Our members are among the millions of hardworking Americans who are not well served by mainstream financial products.

We believe our strong Net Promoter® Score ("NPS") of 79 for our personal loans demonstrates our success in providing our members with effective and easy to use solutions.

For Oportun, serving our members means building their financial resiliency and ensuring that trustworthy and hardworking people always have access to responsible and affordable credit that fits their needs.

Our intelligent lending and savings platform is designed to help people, even those who are not well served by mainstream financial institutions, access credit and automate their savings without impacting their ability to meet daily spending needs.

By applying artificial intelligence ("A.I.") to automate their financial health through adequate savings and credit when they need it, we believe we can address the very real daily financial needs of millions of people living in the U.S.

Product Overview

Our financial products allow us to meet our members where they are and assist them with their overall financial health.

Consumers can become members and access our products through the Oportun Mobile App, the Oportun.com website, our telesales team, and through our retail locations.

Collectively these are our primary channels for onboarding and serving members.

Through these channels, we help potential and current members become aware of our product offerings, in addition to our brand marketing (including online and broadcast media and outdoor advertising, including the physical presence of our 129 physical retail locations in some of the communities we serve) and direct marketing (including SMS/text, email, mail and offers made available through our Oportun Mobile App).

Credit Products— Since our founding in 2005, we have extended more than $17.8 billion in responsible credit through more than 6.9 million loans and credit cards, and helped over 1.1 million people who came to Oportun without a FICO® score to begin establishing a credit history .

According to a study commissioned by us on the credit options available to people with little or no credit history, the Financial Health Network found that Oportun loans are, on average, 7 times less expensive than other options and up to 16 times less expensive as compared to online-only installment products.

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While many of the people who come to us are not well served by mainstream financial institutions due to limited credit history, we use A.I.

and billions of proprietary data points to score 100% of our loan applicants and offer our members responsibly designed and affordable credit products that are often otherwise unavailable to them, including personal loans and credit cards.

Digital Banking Products— With our acquisition of Digit on December 22, 2021, we believe we now have a strong competitive advantage over other fintechs and neobanks.

As a combined company, we can now offer access to a comprehensive suite of digital banking products, offered either directly or through partners, including savings and investing powered by A.I.

and tailored to each member's goals to make achieving financial health automated.

Digit began with a savings product with the intent to apply A.I.

to make financial health effortless for everyone.

Following the success of the initial savings product, Digit expanded its products and services to include bank account and investment products, available through partners.

Since 2015, our members have saved over $8.9 billion towards their rainy day fund and other savings goals.

Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 6, Acquisition , in the accompanying Notes to the Consolidated Financial Statements for further discussion of the Digit acquisition.

Lending as a Service— In addition to reaching members through direct marketing channels, we leverage our proprietary credit scoring and underwriting model to enable us to serve consumers by partnering with other brands.

Our first strategic partner for this Lending as a Service model was DolEx Dollar Express, Inc.

In this partnership, DolEx markets loans and enters borrower applications into Oportun’s system, and Oportun underwrites, originates and services the loans.

In October 2021, we launched another Lending as a Service partnership with Barri Financial Group in select locations.

In January of 2022, we announced our first all-digital Lending as a Service partnership with Sezzle, a leading provider of Buy Now Pay Later ("BNPL") financing options which launched in the first quarter of 2023.

Oportun is now available as a checkout option, through Sezzle, for larger purchases which we believe will allow us to reach more new members.

We believe we will be able to offer Lending as a Service to additional partners, and expand our membership base.

Providing our Members with a Seamless Experience

We recently launched a mobile application that integrates our credit and digital banking products into a seamless user experience (“Oportun Mobile App”) that further positions us as a leading fintech with one of the most comprehensive offerings.

We believe that by offering our members an integrated experience through the Oportun Mobile App, we can boost member engagement and retention, as well as multi-product adoption.

Our Digital Banking Platform

Consistent with our mission of financial inclusion, we have designed our integrated digital banking platform to provide products and services

that are financially responsible and lower cost compared to market alternatives.

Our application of A.I., specifically machine learning, is designed to address the shortcomings of the modern banking system.

Since our inception, we have utilized alternative data sets to rapidly build, test and develop our underwriting, pricing, marketing, fraud and servicing models, and with the acquisition of Digit, we now offer machine learning capabilities that help members identify the right amount of money to put towards savings and investments each day.

We believe this gives us a strong competitive advantage and an unparalleled suite of digital banking products, which allow us to offer a lower cost option to millions of people in the U.S.

Through the development and utilization of our sophisticated underwriting models, we are able to assess credit risk more effectively compared to other companies and traditional scoring models.

We ingest over 9.2 billion data points into our risk model development using traditional (e.g., credit bureau data) and alternative (e.g., transactional information, public records) data.

and billions of proprietary data points to score 100% of our loan applicants and offer our members responsibly designed and affordable credit products that are often otherwise unavailable to them.

Savings Product —Since 2015, our recently rebranded Set & Save™ product has allowed our members to set aside more than $10.2 billion for rainy days and other purposes, including an average of $1,800 in individual savings per member per year.

Oportun uses algorithms that learn the financial habits of our members like when their paychecks are deposited and for how much, the timing and cost of their recurring monthly expenses like rent and digital subscriptions, along with all the other small and large payments and deposits that are not regularly recurring.

Through machine learning, Oportun gets a comprehensive and personalized profile of our members’ cash flow and very quickly learns how much a member can afford to set aside today, without impacting their ongoing obligations and daily spending needs.

For our members, saving money quickly becomes effortless and their financial resiliency improves every day, as Oportun does all the hard math, budgeting, and money transferring that present the sort of daily

obstacles that inhibit many people from having adequate savings when they most need it.

In 2023, Set & Save was ranked the #1 Savings App by Bankrate.

To strategically realign our resources to focus on other products, on November 6, 2023, we announced the sunsetting of our embedded finance partnership with Sezzle, a provider of Buy Now Pay Later financing options, which launched in the first quarter of 2023.

In addition, on the same day, Oportun announced that it was exploring strategic options for our credit card portfolio.

Use of Artificial Intelligence

Consistent with our mission of financial inclusion, our application of A.I., specifically machine learning, is designed to address the shortcomings of the modern banking system.

Since our inception, we have utilized alternative data sets to rapidly build, test and develop our underwriting, pricing, marketing, fraud and servicing models;

and with Set & Save, we now offer machine learning capabilities that help members identify the right amount of money to put towards savings each day.

We believe this gives us a strong competitive advantage, which along with our lending products, provides us the opportunity to holistically address the two fundamental obstacles to financial resilience;

access to responsible and affordable credit when needed and adequate savings.

Through the development and utilization of our sophisticated underwriting models, we can assess credit risk more effectively compared to other companies and traditional scoring models.

We ingest billions of data points into our risk model development using traditional (e.g., credit bureau data) and alternative (e.g., transactional information, public records) data.

This helps us to score 100% of the applicants who come to us seeking to borrow money, enabling us to serve more people while minimizing risk.

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Our fully centralized and automated digital underwriting platform powers our ability to successfully preapprove borrowers in seconds.

As a result, our credit products, including unsecured personal loans, credit cards, and secured personal loans, are a significant differentiator from other lenders and other digital banking companies.

Most fintech platforms are focused on borrowers with more established credit histories and higher incomes and are not able to match our ability to effectively manage credit risk among people who may face challenges with aspects of their financial health.

The evolution of our proprietary risk model enables us to underwrite more applicants and make more credit available to new and returning borrowers, while maintaining consistent credit quality.

The continuous development and rapid deployment of our credit models enabled by machine learning creates a virtuous cycle that increases our member base and our alternative data set, improving our underwriting tools and ability to grow profitably.

As a result, our credit products, including unsecured personal loans and secured personal loans, are a significant differentiator from other lenders.

In addition to the challenge of capital access, millions of people in the U.S.

have a difficult time trying to save and manage money.

Through our digital banking products, we help our members reach their financial goals and improve their financial health by automating away the guess-work and stress of money management.

We meet our members where they are, connecting directly to their checking account to analyze spending and income patterns, regardless of whether their bank account is through Digit's partner bank or another bank.

We apply algorithms to this data, along with generalized principles of responsible finance and behavioral psychology, to make personalized money allocation decisions on a daily basis for each of our members.

The algorithms behind our digital banking products intelligently utilize the nuances in transaction data to classify income and expenses with up to 95% accuracy.

have a difficult time saving and managing money.

Through our Set & Save product, we help our members reach their financial goals and improve their financial health by automating away the guesswork and stress of money management.

We meet our members where they are, connecting directly to their checking account to analyze spending and income patterns, regardless of where they bank.

We apply algorithms to this data, along with generalized principles of responsible finance and behavioral psychology, to make personalized money allocation decisions daily for our members.

The algorithms behind our Set & Save product intelligently utilize the nuances in transaction data to classify income and expenses with up to 95% accuracy.

We classify financial obligations, credit, bills, and paychecks based on historical data to forecast a future financial picture for each member.

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engine with a long track record of making financial health effortless for our members.

This serves as a major competitive advantage in delivering new types of personalized but scalable financial services.

This serves as a major competitive advantage in delivering new types of personalized and scalable financial services.

Our technology, member-centric culture and effective use of data and analytics enable us to efficient ly help our members overcome financial challenges.

We seek to expand our financial services to help a growing number of responsible, hardworking members to borrow, save, bank and invest through our digital banking platform and thus make financial health effortless for them.

Our specific objectives are to (1) grow our members, including by organic acquisition, (2) increase the number of products that our members use and drive higher engagement of multi-product relationships, and (3) enhance our platform capabilities across all core functions to better serve our members.

Our strategy to achieve these objectives is to (a) invest in our member acquisition channels, especially digital and partner channels, (b) enhance our credit and digital banking products, and (c) provide these complementary product categories with a unified and integrated mobile-first experience powered by A.I.

through our Oportun Mobile App.

Our ability to comprehensively address our members' most pressing financial needs effortlessly and at attractive pricing will lead to increased lifetime value as members take advantage of our multiple product offerings.

Invest in member acquisition channels – To expand our member base, we plan to invest in scaling our marketing capabilities for our credit products and digital banking services.

For example, via brand marketing (including online and broadcast media) and direct marketing (including paid and organic online advertising and social media as well as offers made through our Oportun Mobile App).

In addition, our origination partnerships with WebBank for credit cards and Pathward, N.A.

(formerly known as "MetaBank, N.A.) for personal loans allow us to reach new members across the nation, mainly through our digital marketing capabilities.

We have significant opportunity to gain market share as we increase awareness of Oportun’s superior value proposition to members in markets we entered through these partnerships.

In addition to our direct-to-consumer channels, we reach incremental members through our Lending as a Service product offering.

By entering Lending as a Service partnerships with other companies, we create new proprietary channels through which to offer our lending products and financial services and acquire new members, multiplying our membership growth potential.

We plan to add additional Lending as a Service partners in the future, both with retail origination capabilities, similar to DolEx and Barri Financial, and fully digital platforms such as Sezzle, a leader in the BNPL space.

We will also seek to market our digital banking products to former Oportun borrowers who successfully repaid their loans and intend to market our credit products to former Digit members.

Enhance our credit and digital banking products – We leverage machine learning to rapidly build and test strategies across the member lifecycle, including through targeted digital marketing, underwriting, pricing, fraud and member servicing.

We believe that as we scale our suite of digital banking products and services, we will further improve member loyalty and increase member lifetime value.

We also expect to continue to

derive actionable insights to further drive growth of our secured personal loan and credit card products that are still early in their market adoption lifecycle.

Additionally, we will continue to invest significantly in our artificial intelligence capabilities to expand the functionality and efficiency of our products.

Provide a unified and integrated mobile experience – We recently launched our Oportun Mobile App, which brings together all of our products into a seamless user experience.

Our Oportun Mobile App will ensure our members and potential members are made aware of and have access to our full range of products, which furthers our vision to make financial health effortless for our members.

In addition, we believe this single acquisition funnel will increase member conversion and decrease cost of member acquisition.

This affords the broadest possible opportunity to sustain long-term relationships with our members and will enable us to engage with our members more frequently.

We plan to invest in increased content and functionality to further increase our members’ engagement.

This will strengthen our relationships with our members and enable us to become their preferred provider of credit and digital banking products.

We believe this will result in higher member lifetime value as members extend their relationships with us and utilize more of our products.

We will continue to invest in further enhancements to serve more of our members’ needs, continue to build lasting and durable relationships with them and improve their financial health.

Our financial products allow us to meet our members where they are and assist them with their overall financial health, resulting in opportunities to present multiple relevant products to our members.

Our credit products include personal loans, secured personal loans and credit cards.

Our digital banking products include, automated savings, as well as a digital bank account and long-term investing and retirement savings available through partners.

Consumers are able to become members and access our products through our mobile application, the Oportun Mobile App and the Oportun.com website, which are our primary channels for onboarding and serving members.

Our personal loan products are also available over the phone or through our retail and Lending as a Service partner locations.

We help potential and current members become aware of our product offerings through brand marketing (including online and broadcast media and outdoor advertising, including the physical presence of retail locations in some of the communities we serve) and direct marketing (including SMS/text, email, mail and offers made available through our Oportun Mobile App).

Credit Products

Personal Loans - Personal loans allow our consumers a fast and convenient way to address pressing financial needs (for example an unplanned car repair) as well as planned purchases and personal growth opportunities (such as a deposit on a home rental).

Our competitive differentiation in personal loans comes from our segment focus, our technology, data, and A.I.-driven approach to delivering personal loans, and the way we tailor our product designs and borrowers experience to meet and exceed the expectations of our target members.

This product is currently the majority of our revenue and profitability, and continues to have significant opportunity for growth, benefiting from category growth as well as growth in our brand awareness outside of our historical regional operating footprint (leveraging our partnership with Pathward, N.A.).

Our personal loan is a simple-to-understand, affordable, unsecured, fully amortizing installment loan with fixed payments throughout the life of the loan.

Our strategy should be thought of in two parts, (1) short-term focus and (2) long-term focus.

Short-term focus— our immediate priorities are to:

(a) improve the efficiency of our business to boost profitability, this includes cost-cutting actions taken last year that are anticipated to deliver $105 million in annual savings in 2024;

and (b) improving the quality of credit we are extending, as our members are impacted by continuing economic uncertainty, including a significant increase in inflation and interest rates.

Long-term focus— As the macro environment stabilizes, we believe we have several significant growth opportunities.

First, we believe we can more deeply penetrate the 30 states that comprise approximately 40% of our total addressable market by actively marketing to new members.

We believe we can also increase the percentage of our lending that is on a secured basis, via our Secured Personal Loan product, where we see more than 300 basis points lower credit losses.

Currently, our Secured Personal Loans are available in California;

however, in November of 2023, we announced that through our partnership with Pathward, N.A., we now have the opportunity to expand the coverage of our Secured Personal Loans up to approximately an additional 40 states.

In addition, we plan to continue developing more cross-buying opportunities between our Set & Save savings product and our credit products, primarily through timely and relevant marketing to existing members via our mobile app.

Invest in member acquisition channels —To expand our member base, we plan to efficiently invest in scaling the marketing capabilities for our credit and savings products, primarily through the use of A.I.

Since 2020, Oportun has been expanding within new geographies, as a result of our partnership with Pathward, N.A., and we now offer our products nationwide.

along with proprietary and third-party data, we are well-positioned to be highly targeted in reaching out to prospective new members, in addition to our existing 2.1 million members, with relevant and timely offers to help them on their path to financial health.

In addition to our direct-to-consumer channels, we reach incremental members through our Lending as a Service lead generation program.

By entering Lending as a Service partnerships with other companies, we create new proprietary channels through which to offer our lending and financial services products, and acquire new members, fortifying our membership growth potential.

We may seek to add additional Lending as a Service partners in the future, similar to our current partnerships with DolEx Dollar Express, Inc.

and Barri Financial Group (now consolidated into a single company “DolFinTech”) where we collect leads from 393 of their retail locations.

Enhance our credit and savings products —We leverage machine learning to rapidly build and test strategies across the member lifecycle, including through targeted digital marketing, underwriting, pricing, fraud and member servicing.

We also expect to continue to derive actionable insights to further drive growth of our products, and we will continue to invest significantly in our A.I.

capabilities to expand the functionality and efficiency of our products.

Personal Loans —Personal loans allow our members a fast and convenient way to address pressing financial needs (for example an unplanned car repair) as well as planned purchases and personal growth opportunities (such as a deposit on a home rental).

Our competitive differentiation in personal loans comes from our segment focus, our technology, data, A.I.-driven approach to delivering them, and the way we tailor our product designs and borrowers’ experience to meet and exceed the expectations of our target members.

Unsecured Personal Loans —Our personal loan is a simple-to-understand, affordable, unsecured, fully amortizing installment loan with fixed payments throughout the life of the loan.

We charge fixed interest rates on our loans, which vary based on the amount disbursed and applicable state law, with a cap of 36% annual percentage rate (“APR”) in all cases.

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Generally, loan payments are structured on a bi-weekly or semi-monthly basis to coincide with our members' receipt of their income.

As part of our underwriting process, we only approve loans that meet our ability-to-pay criteria.

As part of our underwriting process, we verify income for all applicants and only approve loans that meet our ability-to-pay criteria.

As of December 31, 2023, we originate unsecured personal loans in 6 states through state licenses and in 38 states through our partnership with Pathward, N.A.

Secured Personal Loans —In April 2020, we launched a personal installment loan product secured by an automobile, which we refer to as secured personal loans.

This product allows our borrowers to access larger loan sizes than they can with an unsecured loan, which is critical if the need they are facing exceeds our unsecured lending limits for that member.

Our secured personal loans business has significant growth potential as we expand geographic and channel availability and make more of our members aware of the product.

This product allows our members to access larger loan sizes than they can with an unsecured loan, which is critical if the financial need they are addressing exceeds our unsecured lending limits for that member.

Our secured personal loan business has significant growth potential as we expand geographic and channel availability and make more of our members aware of the product.

Our competitive differentiation in secured personal loans comes from leveraging the member base, application flow, and business platform we have already built for unsecured personal loans – we underwrite borrowers seeking a personal loan for both an unsecured and secured loan, allowing them to choose the offer that fits best for them.

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As part of our underwriting process, we evaluate the collateral value of the vehicle, verify income for all applicants and only approve loans that meet our ability-to-pay criteria.

Our secured personal loans are currently offered in California, Texas, Florida, Arizona and New Jersey and we are in the process of considering expansion into other states.

Credit Cards - We lau nched the Oportun® Visa® Credit Card, issued by WebBank, Member FDIC, in December 2019, and offer credit cards in 45 states as of December 31, 2022 .

This product has the advantage of being an “everyday, in your pocket” product, easily usable for small ticket purchases.

Credit lines for our credit cards range in size from $300 to $3,000 with an APR between 24.9% to 29.9%.

The average APR of the outstanding credit card receivables was 29.8% as of December 31, 2022 .

The average credit line for credit cards activated in 2022 was $834.

Digital Banking Products

With the acquisition of Digit on December 22, 2021, a digital financial health platform, we now offer a variety of digital banking products, including personalized and automated savings, investing and banking products.

Members are able to integrate their existing bank accounts into the platform or they can make us their primary banking relationship through our bank partner.

Members set goals for savings or investing through the application or use the application to help manage their debt.

Then, our A.I.

engine analyzes their income and spending patterns to find the optimal amount that can safely be applied towards their goals and automatically transfers the necessary funds over time to achieve those goals.

One proof point of the success of this A.I.-driven approach is the 814 million algorithmic transfers completed in the last 8+ years.

We believe that the mainstream banking industry focuses on serving more affluent borrowers and has not built core deposit products to effectively serve the needs of everyday consumers.

Despite the fact that free savings accounts are available at every corner bank, most underserved people in the U.S.

have not been successful in their savings goals.

We see this market failure as an opening, and our competitive advantage is to leverage A.I.

and mobile to deliver better banking products to everyday consumers, to help them actually succeed with their saving, daily budget management, and spend management goals.

Additionally, our digital banking platform will allow us to have as frequent as daily engagement with our members through the benefit of our budgeting and money management tools.

This will enhance our relationship with our members and allow us to be a preferred provider of other financial services and credit products.

The financial result will be higher revenue as members extend their relationships with us, use more credit products and choose to pay for additional financial services.

We will continue to invest in and evolve our digital banking platform to further improve our ability to serve our members and continue to build lasting and durable relationships with them.

Savings – Our Savings product is designed to understand a member’s cash flows and save a calculated amount on a regular basis to effortlessly achieve savings goals.

Digit's savings product utilizes machine learning to analyze a member’s transaction activity and build forecasts of the member’s future cash flows to make small, frequent savings decisions according to the member’s financial goals in a personalized manner.

According to a January 2023 survey by Bankrate, more than half of all Americans do not have enough savings to cover an unplanned expense of $1,000.

After one year using the automated savings product, our members have been able to increase their liquid savings by approximately 50% on average.

Since 2015 Digit has helped members save over $8.9 billion .

Direct – Our Direct product offers a full checking account, through a bank partner, that intelligently organizes and budgets a member’s money across bills, savings, and spending.

The bank account with a brain ™ , Direct leverages the same A.I.

engine used for our savings product to automatically identify and organize recurring bills and guides spending to ensure members' savings goals are met, and that members know exactly what they can safely spend.

This is on top of what members can expect from a traditional checking account, including a physical and virtual debit card to use for purchases and ATM withdrawals and checks.

Our product allows our busy members to get back to living their lives without stressing about money management.

Investing and Retirement – Our investment and retirement products are a longer-term savings solution via an A.I.-driven portfolio allocation into low-cost investments based upon risk-tolerance.

According to Financial Health Network “Financial Health Pulse:

Trends Report”, 60% of U.S.

consumers are not confident about their long-term financial goals.

Our long-term investment solutions automatically allocate our members' savings into low-cost risk-adjusted portfolios held in brokerage accounts or tax-advantaged IRAs.

Since 2020, Digit members have invested $67 million into long-term goals through low-cost ETF portfolios.

The investment accounts, offered through a broker-dealer partner, include a general investing account and a retirement account for our members’ longer term goals, utilizing smart recommendations to invest savings in risk-adjusted portfolios.

Lending as a Service

Beyond our core direct-to-consumer lending business, we believe that we can leverage our proprietary credit scoring and underwriting model to partner with other consumer brands.

Our first strategic partner for this Lending as a Service model was DolEx.

In this partnership, DolEx markets loans and enters borrower applications into Oportun’s system, and Oportun underwrites, originates and services the loans.

In July 2021, we signed Barri Financial Group as a Lending as a Service partner and we launched in several of their locations in October 2021.

In January of 2022, we announced our first all-digital Lending as a Service partnership with Sezzle, a leading provider of BNPL financing options which launched in the first quarter of 2023.

Oportun is now available as a checkout option, through Sezzle, for larger purchases which we believe will allow us to reach more new members.

We believe we will be able to offer Lending as a Service to additional partners and expand our membership base.

Our secured personal loans are currently offered in California and we are in the process of planning to expand into other states.

Set & Save — Our savings product, Set & Save, is designed to understand a member’s cash flows and save the right amount on a regular basis to effortlessly achieve savings goals.

Our savings product utilizes mac hine learning to analyze a member’s transaction activity and build forecasts of the member’s future cash flows to make small, frequent savings decisions according to the member’s financial goals in a personalized manner.

Members integrate their existing bank accounts into the platform or they can make the Set & Save product their primary banking relationship through a bank partner.

After one year using the automated savings product, members have been able to increase their liquid savings by approximately 50%.

Since 2015 our savings product has helped members save more than $10.2 billion .

Our Competition

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We may also face competition from companies that have not previously competed in the consumer lending market for borrowers with limited credit history.

For example, we are already seeing that the companies commonly referred to as “challenger banks” offering low-cost digital-only deposit accounts are beginning to offer lending products catered to underserved borrowers.

For example, we are already seeing that the companies commonly referred to as “challenger banks”, “digital banks”, or “neo-banks” offering low-cost digital-only deposit accounts are beginning to offer lending products catered to underserved borrowers.

In addition, it is possible that, in competitive reaction to the challenger banks, traditional banks may introduce new approaches to small-dollar lending.

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Additionally, new companies are continuing to enter the financial technology space and could deploy innovative solutions that compete for our members.

See “Risk Factors – If we do not compete effectively in our target markets, our results of operations could be harmed” and “Risk Factors – Competition for our highly skilled employees is intense, and we may not be able to attract and retain the employees we need to support the growth of our business.”

In digital banking, we compete with traditional banks, both large and small, as well as other fintech companies offering mobile-centric digital banking propositions.

Currently most consumers continue to bank primarily with traditional banks.

However, in the last several years, Fintech companies with digital banking propositions have grown their member bases significantly, especially with underserved consumers.

We are already seeing some competitive reactions from traditional banks to this potential disruption.

For example a number of larger banks have in the last year introduced more consumer-centric approaches to overdraft, as well as up-to-two-day-early access to payroll deposits.

While the digital banking market is competitive, we observe that so far most of the competitive tactics have centered on intuitive low-friction mobile experiences, and reduction or elimination in overdraft fees.

Our strategy is to differentiate by harnessing AI to enable members to actually achieve better financing outcomes – to succeed in their savings goals, better manage their monthly budgets, and improve their financial health.

See “Risk Factors —If we do not compete effectively in our target markets, our

results of operations could be harmed” and “Risk Factors—Competition for our highly skilled employees is intense, and we may not be able to attract and retain the employees we need to support the growth of our business.”

Management's Discussion and Analysis of Financial Condition and Results of Operations for discussion of Seasonality.

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For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act” ), as well as many state statutes provide a mechanism for state attorneys general to investigate us.

The CFPB has also announced plans to use a dormant provision of the Dodd-Frank Act to expand its supervisory authority over entities it reasonably believes pose risks of consumer harm.

In addition, the Federal Trade Commission (the "FTC") has jurisdiction to investigate aspects of our business.

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In addition, as a result of our bank partnerships, prudential bank regulators with supervisory authority over our partners have the ability to regulate aspects of our business.

We are subject to the USA PATRIOT Act, Office of Foreign Assets Control, Bank Secrecy Act, Anti-Money Laundering laws, and Know-Your-Customer requirements and certain state money transmitter laws.

Either directly or through our bank partnership program requirements, we are subject to the USA PATRIOT Act, Office of Foreign Assets Control, Bank Secrecy Act, Anti-Money Laundering laws, and Know-Your-Customer requirements.

The laws and regulations applicable to us are continuing to evolve through legislative and regulatory action and judicial and regulatory interpretation and we monitor these areas closely.

We regularly review our consumer contracts, consumer-facing content, policies, procedures, and processes to ensure compliance with applicable laws and regulations.

We have built our systems and processes with controls in place in order to ensure compliance with applicable laws.

In addition to ensure proper controls are in place, we have a compliance management system that leverages the five key control components of governance, compliance program risk assessments, policies, procedures and training, member complaint monitoring and internal compliance audits.

We have built our systems and processes with controls in place to ensure compliance with applicable laws.

In addition to ensuring proper controls are in place, we have a compliance management system that leverages the five key control components of governance, compliance program risk assessments, policies, procedures and training, member complaint monitoring and internal compliance audits.

For more information with respect to the regulatory framework affecting our business, see "Risk Factors — Risks Related to our Industry and Regulation."

Our Technology Infrastructure

Our applications, including our proprietary workflow management system that handles loan and credit card application, document verification, loan disbursement and servicing, as well as our systems that handle that our automated savings, investing and banking tools are architected to be highly available, resilient, scalable, and secure.

Our applications, including our proprietary workflow management system that handles loan and credit card application, document verification, loan disbursement and servicing, as well as our systems that handle that our automated savings tools are architected to be highly available, resilient, scalable, and secure.

Critical services in the cloud are deployed across multiple availability zones within a region to ensure that we have the necessary scalability and availability to support our service-level objectives.

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In the event of database restores, we perform data consistency checks to validate the integrity of the data recovery process.

A comprehensive business impact analysis is performed annually detailing the maximum tolerable downtime for all mission critical functions.

A comprehensive business impact

analysis is performed annually detailing the maximum tolerable downtime for all mission critical functions.

Across our infrastructure, a robust and holistic monitoring-and-alerting practice allows for awareness and detection capabilities ensuring faster incident response and resolution time, limiting the risk of unplanned events, such as downtime or security threats.

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At Oportun, we are building a community of employees, partners, and members who support each other on the path to new opportunities, because we believe that when we work together, we can make life better.

Our welcoming and inclusive company culture is grounded in our core values - service, excellence, care, innovation, courage, and empowerment – and our people strategies are committed to fostering a culture which encourages and empowers our employees to live our core values every day.

Our welcoming and inclusive company culture is grounded in our core values and our people strategies are committed to fostering a culture which encourages and empowers our employees to live our core values every day.

• Employee Engagement – We conduct an annual engagement survey as a means of measuring employee engagement and satisfaction, as well as a tool for improving our people strategies for the year ahead.

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Survey results are evaluated and shared across the organization, including our Board’s compensation and leadership committee, to identify areas of progress and areas for improvement.

Based on feedback received this year, management

implemented several initiatives to improve the employee experience through rewards and recognition, increased communication transparency, and streamlining processes and collaboration tools.

We have been recognized as a Greater Bay Area’s Top Workplace for the past four years and in 2022 we were named one of Comparably’s Companies with Happiest Employees, which is a list derived from top sentiment ratings anonymously provided by employees.

• Diversity and Inclusion – We b elieve that innovation starts with inclusion.

Based on feedback received this year, management implemented several initiatives to improve the employee experience through rewards and recognition, increased communication transparency, and streamlining processes and collaboration tools.

As a result of our employee engagement efforts, we have been recognized as a Greater Bay Area Top Workplace for the past five years.

• Diversity and Inclusion – We believe that innovation starts with inclusion.

Our focus on diversity and inclusion is reflected throughout our organization, starting at the highest level.

Currently, 88% of our Board identifies as women or members of an underrepresented group and the majority of our leadership team identifies as either women or members of an underrepresented group.

The majority of Oportun employees identify as women or members of an underrepresented group and the majority of Oportun’s leadership team identifies as either women or members of an underrepresented group.

The majority of Oportun employees identify as women or members of an underrepresented group.

We define the leadership team as Directors, Senior Directors, Vice Presidents and above, inclusive of the Board.

We have nine employee resource groups focused on our Asian, Black, Hispanic/Latinx, LGBTQ+, early career individuals, disability/accessibility, South Asian, veteran, and women communities.

We have ten employee resource groups focused on our Asian, Black, Hispanic/Latinx, LGBTQ+, early career individuals, disability/accessibility, South Asian, veteran, environmental enthusiasts, and women communities.

We are committed to fostering a culture of diversity, equity and inclusion;

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We benchmark market practices, and regularly review our compensation against the market to ensure it remains competitive.

In addition to salaries, our benefits programs include annual bonuses, equity awards, a 401(k) plan, healthcare and insurance benefits, flexible spending accounts, paid time off, family leave, paid time off for volunteering, matching gifts, employee assistance programs, family care resources, and tools to promote mental health and wellness.

In addition to salaries, our benefit programs include annual bonuses, equity awards, a 401(k) plan, healthcare and insurance benefits, flexible spending accounts, paid time off, family leave, paid time off for volunteering, matching gifts, employee assistance programs, family care resources, and tools to promote mental health and wellness/fitness.

In 2021, we transitioned to a remote-first policy and we believe that our remote-first culture gives our employees more flexibility to choose where and how to work, while allowing us to engage with a wider pool of talent.

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and data science.

On February 9, 2023, we announced that we were reducing our corporate employees by 10% in the United States, India and Mexico, or approximately 155 employees.

During 2023, we announced a series of personnel and other cost savings measures to reduce expenses and streamline efficiency, including reducing our corporate staff by approximately 40% in the United States, India and Mexico.

Available Information

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These reports are also available free of charge through our website, www.investor.oportun.com, as soon as reasonably practicable after we file them with, or furnish them to, the SEC.

We announce material information to the public through a variety of means, including filings with the SEC, press releases, public conference calls, our websites (www.oportun.com and www.digit.co), the investor relations section of our website (investor.oportun.com), as well as social media, including our LinkedIn pages (https://www.linkedin.com/company/oportun/ and https://www.linkedin.com/company/digit-co/), Twitter accounts (@Oportun and @hellodigit) and Instagram account (@hellodigit).

We announce material information to the public through a variety of means, including filings with the SEC, press releases, public conference calls, our website (www.oportun.com), the investor relations section of our website (investor.oportun.com), as well as social media, including our LinkedIn pages (https://www.linkedin.com/company/oportun/).

The information on our website is not incorporated by reference into this report.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business