How technology makes lending easier and more secure
There is hardly a single aspect of our lives that has not been transformed by technological progress, at least to some extent, and money lending is no exception.
With the help of technologies, banks and other financial institutions can make lending faster and more secure.
Companies like Get Cash use technologies to connect lenders and borrowers and make the process of getting a loan much easier than it used to be. All you need to do to take out a loan is fill in a secure online application. Then you get connected with vetted lenders and get approved for a loan within one business day.
Now, how exactly does technological progress help in lending? Let’s take a closer look.
Easy access
While one still can go to a physical bank, fill in a loan application, and wait for up to a few weeks for it to be approved, digital lending platforms squeeze the whole process into several minutes.
Now, a borrower can sign up to such platforms online, upload all the necessary documents, and press one button to send their application without leaving their house and turning on their computer since a smartphone is enough.
There is no need to wait; in most cases, an online application can be processed and approved within one or two business days.
Data driven decision making
Artificial intelligence and automated machine learning have entirely changed the decision making process in the lending industry. Now, the lenders don’t need to look for information about the potential borrower manually, as all the necessary data can be retrieved automatically.
Another perk is that AI and automated machine learning speed up the approval procedure and leave no space for inaccuracies.
While it’s good for the borrowers, the lenders are the ones who benefit the most as proper risk assessment, credit scoring, and predictive analysis minimize the chance of a mistake.
Inclusive lending
In the traditional lending system, one’s credit score is a deciding factor. Those without a good score or collateral are virtually invisible to the lenders. In the worst case scenario, there should at least be collateral to have a chance to get a loan.
FinTech companies like Revolut (if you’re not familiar with that company, check out a Revolut review here) aim to diversify their profile of borrowers and address those without credit history or even those with bad credit scores, providing it’s a personal loan and not a mortgage.
Enhanced security
New technologies like blockchain and AI make the process more secure both for lenders and borrowers. While lenders can get easy access to regularly updated information about borrowers, borrowers, in their turn, can expect transparency and robust data security from their lenders.
It certainly feels much safer now when your paperwork is not stored on someone’s desk anymore.
Blockchain also makes it easier to adhere to the modern security standards and thus helps the lenders with the compliance issues known to be a headache.
Marketing boost
Thanks to technologies and the amount of data available for access, lenders can now get a deeper insight into the potential borrowers’ needs and wants and thus offer them more targeted and personalised services.
Cost effective operation
That is the point that borrowers don’t care about, but the lenders appreciate it.
With a significant share of work done with the help of technologies, from hiring to everyday office tasks, human resources can be allocated more effectively, both cost and result wise.
Conclusion
Saved money can then be spent on even more digitalisation and development.
It seems at times like the only way for a lending company to survive and succeed in the rapidly digitising world — especially now when the Covid-19 pandemic made person-to-person interactions a lot more risky and less wanted than in the past.
And if the traditional banks and financial institutions want to stay afloat, introducing technologies into their lending processes is inevitable.
About the author:
John Brown is a financial analyst but also a man of various interests.
He enjoys writing about money and giving financial tips, but he can also dive into relationships, sports, gaming, and other topics. He lives in New York with his wife and a cat.
