With a distinguished career in banking and finance, Priya Jaiswal has become a leading voice in market analysis and international business trends, offering sharp insights into the complex world of corporate governance and fintech strategy. In this interview, she dissects the recent leadership shake-up at Oportun, exploring the intense dynamics between activist investors and long-tenured CEOs, the common pitfalls of fintech acquisitions, and the difficult choices boards face when a company’s legacy clashes with its recent performance.
When an activist investor blames a CEO for a stock price drop from nearly $28 to $3, what is the board’s calculus in navigating between the CEO’s vision and the investor’s demands? Please share the typical steps they might take to resolve such a conflict.
In a situation like that, the boardroom becomes an incredibly high-pressure environment. The first thing a board does is move beyond the public letters and scrutinize the data. They can’t ignore a stock collapse from nearly $28 to $3; that’s a catastrophic loss of shareholder value. The calculus isn’t just about the CEO’s vision versus the investor’s demands; it’s about fiduciary duty. They typically form a special committee, often with independent directors, to conduct an objective review of the activist’s claims, especially around “costly, unforced errors.” The next step is engagement—opening a direct, and often tense, line of communication with the investor to understand their core demands, which can range from board seats to a full strategic overhaul. It’s a delicate dance of validating the CEO’s long-term strategy while acknowledging the very real, very painful short-term results.
Oportun’s 2021 acquisition of the neobank Digit was followed by a significant stock decline. Based on similar situations, what are the common pitfalls in fintech M&A, and what metrics should a board scrutinize to assess if such a deal is a strategic misstep?
This is a classic case of what can go wrong in fintech M&A. The biggest pitfall is often a “vision mismatch,” where a company acquires another for a capability, like a neobank platform, that doesn’t cleanly integrate with its core business, which here was non-prime lending. This often leads to a bloated cost structure and a confused market identity. A board should be obsessively scrutinizing post-acquisition metrics beyond just top-line revenue. They need to look at the combined entity’s customer acquisition cost, the rate of product adoption from the acquired company, and, most importantly, the tangible impact on the bottom line. When an acquisition is followed by a stock plummet and public criticism from a major shareholder about “disastrous acquisitions,” the board has to ask the hard question: did we buy a growth engine or an anchor?
In early 2023, Oportun cut 185 jobs, discontinued products, and sold its credit-card portfolio. Walk me through the decision-making process for a leadership team when implementing such drastic turnaround measures. How do they prioritize which assets to divest or which divisions to downsize?
When a company is forced into such a dramatic pivot, the leadership team enters a survival mode focused on one thing: shoring up the core business. The decision-making process becomes a form of triage. They lay out every business line, every product, and ask two brutal questions: “Is it profitable?” and “Is it essential to our primary mission?” In this case, investment and retirement products were likely cash-draining and far from their core mission of providing credit. The credit-card portfolio, while related, might have been a capital-intensive operation they could sell to generate immediate cash and reduce risk. These decisions are gut-wrenching because they impact real people, with 185 jobs lost, but they are driven by a need to stabilize the ship and prove to the market they can get their cost structure under control and refocus on what made them successful in the first place.
A CEO can grow a company’s revenue from $30 million to over $955 million in a decade, yet still be forced to step down over recent performance. How should a board weigh a leader’s entire legacy against more recent strategic errors? What signals typically indicate it’s time for a change?
This is one of the most difficult challenges a board faces. Weighing a decade of incredible growth, from $30 million to nearly a billion dollars in revenue, against a recent, severe downturn is agonizing. A leader’s legacy earns them a significant amount of latitude, but it’s not a blank check. The key signal that it’s time for a change is a loss of confidence—not just from one activist investor, but from the broader market. When strategic missteps like a questionable acquisition are compounded by a collapsing stock price and an inability to articulate a clear path back to profitability, the board’s patience wears thin. The legacy shows what the CEO was capable of, but the recent performance suggests they may not be the right leader for the company’s next phase, which requires a different skill set focused on operational discipline and value creation at scale.
Before its shareholder dispute, Oportun withdrew a national bank charter application amid a CFPB probe into its collection practices. How might past regulatory and reputational challenges like these influence a board’s current strategy and their criteria for selecting a new chief executive?
Those past challenges cast a very long shadow. Withdrawing a bank charter application under the cloud of a CFPB probe is a significant setback that goes to the heart of a lender’s reputation, especially one built on a mission of serving underbanked communities. This history absolutely influences the board’s current thinking. It heightens the need for a new CEO who not only has a track record of driving profitable growth but also possesses an unimpeachable record on compliance and risk management. The board will be laser-focused on candidates who can navigate complex regulatory environments and rebuild trust with both regulators and the public. They are not just looking for a growth driver; they are looking for a steady hand who can ensure the company’s practices are as responsible as its mission claims to be.
What is your forecast for the subprime lending fintech sector?
The forecast for the subprime lending fintech sector is one of cautious navigation through a complex economic landscape. On one hand, persistent inflation and economic uncertainty mean there will be sustained, and likely growing, demand for credit from consumers who are not served by traditional banks. This creates a significant market opportunity. On the other hand, the sector faces intense regulatory scrutiny, particularly around collection practices and interest rates, as we saw with Oportun. The winning firms will be those that can master the delicate balance of leveraging technology for efficient underwriting and servicing while maintaining the highest standards of transparency and regulatory compliance. Consolidation is also likely, as smaller players may struggle with the rising cost of capital and compliance, making scale a critical factor for long-term survival and profitability.
