The world of lending has shifted and changed dramatically over the years. While a huge part of this is down to the creation of the internet and the emergence of online lending, there are many financial technologies that have changed the way we borrow. From the near-instance of emergency loans UK and the faster checks for the likes of phone contracts or car finance, lending has become a much smoother process overall. Here are just a few ways in which financial technology has changed the world of lending.
The Rise Of Online Lending
After the creation of the internet, the innovation of online lending was a natural progression from traditional lending. With more consumers and businesses alike shifting to digital platforms, it only made sense to offer people the ability to securely handle their finances online. This technology offers machine learning to prevent fraudulent activity, blockchain for improved security, and data management tools which offer a private and consumer-controlled environment. While many still favour traditional lending and speaking to a lender in person, online lending has become a large part of the financial industry, and has allowed many independent lenders and brokers to start their businesses.
As we have seen, the rise of online lending brought a whole new world of security to borrowing, but what about speed? One of the many issues with traditional lending was the time that it took for banks to reach their lending decision, and with the rise of a more digital lifestyle, the demand for a quicker pace was high. It is common for traditional lending options to spend over a day on a single application, while it is now possible for online lenders to offer the same application and loan terms with a decision in a couple of hours.
This faster pace means that online lenders are under pressure to offer quick decisions that still adhere to the FCA guidelines and cater to each individual’s needs. Thanks to the introduction of automated checks and machine learning, some applicants can receive an approval in less than a minute, or access to cash within the same day. This has also improved inclusivity, as online lenders are now able to access data on your financial state, with your permission, to determine your credit score and affordability.
The Future Of Financial Technology
While the world of lending has come so far, there is still plenty of room for improvement and the future of financial technology is bright. One of the areas that is already shifting is customer service and building trust. Despite concerns about the lack of ‘human touch’, chatbots and AI technology offer the ability to provide simple answers, forward questions to trained staff members, and give customers a quick solution, rather than having to wait for an email or call back.
Big Data is a phrase that may be unfamiliar to those outside of the technology field, but when Big Data and automation are paired, the possibilities are endless. With the implementation of better machine learning automation and Big Data, lenders will have the ability to make highly informed decision that, while automated, offer a more personalised experience for each prospective borrower.
As the digital world continues to change, so will the financial technologies that shape the world of lending. Whether you are in need of a short term loan, a mortgage, or car finance, you can thank innovative technology for the speed and ease of access that we have today.