Technology is playing a significant role in every aspect of life as well as in business irrespective of its types.
Therefore, it is no surprise that that it will also be used in the finance market as well for lending money to the people.
- In fact, if you look into it deeply you will see that it is technology that is blurring the lines that distinguished the old money lender from the new age lenders.
- The ultimate result of using technology is also making it much easier for people to lend and borrow money anytime anywhere with ease and to evaluate the associated risks involved in it more accurately.
However, it was not very long ago when people had a lot of difficulty in securing a loan, especially a business loan. The scenario was such:
- One typically had to beat the pavementsand make the best efforts to pitch their interests to numerous banks and several other types of lending institutions.
- Add to that the application process was long, tedious, complicated and cumbersome. Usually, in most of the cases it was disconnected by miles from the ground realities that the businesses usually faced.
- It typically helped a great deal for a borrower to get the money only if someone was willing to put in a good word for him or her to the powers that be at the banks and other lending institutions.
The end result of all these was no guarantee that the loan application will be approved, and if it at all it gets approved it will hardly be on time to serve the purpose of the business and its pressing needs.
With technology, in came different online lending sources such as LibertyLending.com and other fintech companies that eventually is changing all of it now.
In fact, the money lending landscape is now driven by modern technology that is a mark of innovations and creativity which has eventually resulted in the money lending market witnessing a paradigm shift.
Impact Of Technology
Technology is in fact changing almost every aspect of the finance market including:
- How people go about applying for a loan
- To whom and where they apply
- Know whether or not their loan application is approved or not and
- The amount it is approved for.
In the present finance market, it is not the different banks and NBFC’s who are the only ones lend money to people and businesses.
With technology in the support, there are several new age players are driven by it and are entering the finance market every day with a bang.
And are challenging the “status quo” of the existing traditional sources of money and even the entire sector.
Therefore, in order to stay in business, the different lending institutions, banks, non-banks and loan marketplaces now have to leverage their advancements in all other aspects such as:
- Digital marketing
- Artificial Intelligence
- Machine Learning
- Voice Recognitionand
- Cloud technologies.
These are the technologies that will help them to transform and ground upevery aspect of the money lending business.
Shift From Manual to Virtual
In this modern world, people want everything fast.
That means there is no scope for any manual process that usually takes a long time to complete and with high chances of errors in it that needs a double check.
This adds to the time factor, which is once again not desired by the modern-day borrowers.
Therefore, the lenders now have to make the best use of the availability of high-speed Internet.
They will also add significantly in the growth of their business and volume if they make the use of the smart mobile and computing devices.
In fact, the modern money lenders are excessively encouraged by these and are now increasingly engaging potential applicants as well as their influencers using the web or mobile apps.
- It is this shift from manual to virtual that is empowering both the money lenders as well as the borrowers alike.
- It is also helping the money lenders to disburse larger quantum of credit in larger volumes much quickly, more efficiently and with the minimum amount of risks involved in it.
That means, for the money lenders, adoption of technology as well as tech-enabled risk modelling techniques is paramount.
This will help them in ways more than one that includes:
- Removing limitations that are typically associated with manual credit assessment
- Translate to speedier disbursement of credit directly to the qualifying applicants
- Enhancing the internal processes of loaning
- Target the potential applicants based on the analytical report and Internet search of their social media behavior patterns and
- Expanding their sales pipelines to reach out to beyond target markets.
One of the most extensively used and popular technology is the ‘payasyouuse’.
It enables the new age fintech vendors to help greatly in leveling the playing field for them against the existing and well-established larger players in the market.
In addition to that, the arrival of other useful and effective tech-enabled alternative financing platforms such as the ‘Peer to Peer’ and ‘New to Credit’ lending has also helped the borrowers by providing them with wider and better options to choose from when they want to borrow money for their specific needs, business or personal.
Typically, in the olden times borrowers had to rely on the whims and fancies of the traditional banks and financial institutions when it came to lending money.
But now with technology coming into play, everything has changed.
In this era of technology, borrowing money is more like buying groceries from a large number of shops available, online and offline.
Therefore, they now have the liberty to pick and choose a loan product rather than accept whatever is being offered to them as a loan, or more precisely as a ‘favor’ from the lender.
The end result of this is that the lenders are compelled to make their services as well as products even better than before.
Therefore, inclusion of technology in financing has proved to be beneficial for the borrowers more than the lender, who are not deprived of their due as well.