An ode to Wonga… Nearly a beautiful thing. Nearly. It was the work of an artist to begin with.
First published January … worth a repeat.
Wonga, the payday loan company launched in 2007, died in 2018, could have been a very different story and a beautiful thing. I did a spot of research and the founding CTO, Chief Technology Officer Jonty Hurwitz, is a truly extraordinary artist, a sculptor. Amazing but true. Google him.
It was in 2007 when Jonty became a co founder of the ill fated Wonga.com, where his data visualisation genius was translated into the now familiar ‘slider’ interface. This enabled customers to see how much a loan would cost over a given time period, in a simple and highly engaging user experience. This feature has now become commonplace, entirely normal, yet at the time it was a true and ground-breaking innovation, providing a level of comprehension and transparency previously unseen in any financial services. As visual communication of data it was simple and elegant. Their second major innovation, again, credited to Jonty, was the risk engine, the computational system whereby credit data was drawn from multiple sources enabling Wonga to provide lending decisions in real time, again, a first in the digital lending space. These two innovations, one front end, one back end, made Wonga one of the first and initially most successful of the emerging fintech companies. It even received glowing commendations from The Guardian. It was a Unicorn in the making.
The brilliance of the design, both client facing and from a data perspective, should have made Wonga a shining star of British financial technology. Unfortunately the marketing of the enterprise revealed a different level of conduct. The use of puppets, portraying expensive lending as some sort of fun activity, which also appealed to the pester power of children, and sold the process as a sort of harmless jolly pastime, soon drew criticism. Intelligence was layered with a cynical skin of enticement, and transparency of pricing was only partial, failure to repay loans on time led to a spiralling cycle of debt, many customers were taking out loans to repay previous ones, and the compounded APR was over 5000%.
Jonty left Wonga in 2011, he was the inventor of the technology, but seemingly didn’t have the means to influence the attitude or ethics of Wonga. He created an interesting artwork at this point, a sculpture called Vanquished Co Founder, which perhaps hints at some of the battles fought, and lost, for the soul of the company.
Wonga was heading in the wrong direction, fast. It influenced people to get into unmanageable debt, and used fake legal letters to enforce it, inflicting worry and fear upon millions of customers. It was described as ‘morally wrong’ by the archbishop of Canterbury, and the FCA seemed to agree, finding it guilty of unfair and misleading debt collection practices, and fining it £2.6M. Its advertising was also censured, and soon the laws were changed to cap the interest rates that could be charged. Wonga’s short term lending was mirrored in its own short term attitude, and it created for itself a backlash that ultimately destroyed it. Towards the end customer claims for misselling spiralled, tens of thousands of them driven by professional claims companies, and now Wonga was on the receiving end of demands for payments and charges incurred in collecting them. The tables were fully turned. Wonga reaped the very seeds it had sown. With interest. What began as a highly innovative company with brilliant technology has now become a case study in greed, exploitation, short term thinking and commercial failure. Wonga, had it had a different attitude, could have become exceptional. They had a huge head start, six years before Revolut and eight before Monzo, they could have built the primary challenger bank, with millions of customer fans. Alas. Their own greed ate them.
Their vanquished co-founder artist, the brilliance behind the technology, will be unsurprised, but probably a little disappointed at what could have been. A little applied ethics would have made a lot of difference to a lot of people. The rip off WONGA is now just RIP. Everything comes back round.