For a very long time, traditional banks and lenders were only concerned about their money-making and profits. But the scenario is changing now due to the evolution of technologies.
The traditional lending industry is facing many challenges due to the rise in FinTech companies. Leaders across the industry are trying to come up with development plans to protect their business from these emerging companies.
Customers are not happy with limited options and exorbitant fees charged by conventional lenders and other financial institutions to avail of any types of loans. Due to this reason, they end up losing their customers to FinTech companies.
FinTech companies have a wide range of loan products such as short-term loans, personal loans, no guarantor loans, and installment loans for bad credit from direct lenders only, etc. With multiple options, they are becoming very famous and popular among borrowers. Even those borrowers, who were struggling to get loans due to bad credit score, can now avail loans from online lending companies.
Latest Technologies Used By Lending Agencies
Blockchain: It is expected to change the lending industry in many ways. Currently, most of the lending processes are done manually which is time-consuming and costly. The rise of blockchain will result in a boom in the lending industry. It will provide equal opportunity to all people who were left out of financial benefits due to some reasons. Further, it has resulted in the invention of several other financial services that could change the way people think about lending.
Artificial Intelligence: One of the most innovating and fascinating trends in technology in recent times has been Artificial Intelligence. It has been perceived by experts that AI-based lending is going to be the next revolution in the financial market. Since lending is a data-driven industry, the role and impact of AI cannot be ignored. It enhances interaction with clients. With the help of AI-powered chatbots, better customer service can be given to customers. Also, any probable fraud can be detected early with the help of AI.
Big Data: It is playing a vital role across industries and the financial sector is not left behind. For any business to survive and run successfully the accuracy and predictability of data play an important role. There are various usages of data such as borrowers’ activity, when lenders can expect repayment, to check profit or loss, etc. It also helps in better risk assessment and avoids potential loss and fraud. Thus, using big data can be of great help for lenders.
Cloud: Lately, the cloud has gained a lot of interest from the finance and banking industry. It has the potential to completely change the way lending industries work. As cloud technology is evolving, its role in the finance sector is increasing. Banks and other lending institutions are moving towards cloud-based solutions. Along with it, they are also making use of the Internet of Things.
Robotics: The use of chatbots and robots is on the rise in the finance sector. It not only provides better customer experience but also improves the processes. Earlier due to manual work, it used to take a lot of time for loan processing but with the help of these technologies, all redundant and boring stuff has been automated which resulted in faster loan processing. All the back-office work such as filling, documentation, etc have been automated to fasten the process.
Role of Mobile Apps In Lending
With the rise in internet and mobile devices, it has become a lot easier for people to avail of financial services through a mobile app. Apart from websites; lenders are reachable through mobile apps as well. It has become an efficient and user-friendly way of availing services. It is very safe and secure with high-level security provided by app developers. Hence, the increased use of mobile apps will boost the performance of lenders.
As a result of advancements in technology and automation, many organizations have started investing heavily in cutting edge technologies. With online applications and platforms, it has become very easy and simple for people to access financial services. Seeing this, even conventional lenders started adopting these technologies to stay afloat in the market. The lending industry is expected to evolve tremendously due to these technologies.