New Wave of Digital Disruption in Unsecured Consumer Loan Industry
In 2019-20, many industries including consumer loan segment are estimated to bring about disruptive technology in their financial space. The American Bankers Association (ABA) report’s how the consumer lenders and their digital-only offerings have drawn sensational growth opportunities in their last year. After bypassing the old lending processes, the on-demand digital technology solutions have much to offer to the smartphone-obsessed loan borrowers. Today an array of the white-labeled digital lending software are heavily marketed for disrupting the American, European, and Asian consumer lending industry that has already indexed growth five-times in the [15-18] financial years.
Here’re the Disruptive Technologies Revolutionizing the Digital Lending Landscape:
Cloud Powered Creative Engineering Solutions
All of the modules & templates of the integrated lending software (credit workflow, credit origination, financial spreading, and risk rating) are integrated to perform quantitative and qualitative risk assessments. The engineering solutions like the design schemes, natural language processing, ML, AR, and VR offer a gamified experience to the credit challenged customers.
Lender Specific Collaboration Workflows
Digitized loan repayments now get easier with this loan servicing software without having to face any unpleasant experience by the customers. The multi-stage workflows execute compliance checks, credit applications checks, fraud detection, support underwriting, and complex approvals. The web-based user interfaces enable the customer to check their credit documents, company reviews, risk, ratings, and deal structure before requesting for a loan.
Artificial Intelligence (AI) & Big Data
Capgemini’s report reveals that AI development will have its cognitive use in digital lending. Advanced technologies like predictive analytics and ML have a central role in cognitive computing and in managing volumes of regulatory data. The algorithm integrations help assess customer’s credit profiles, leverage data and evaluate borrower’s credit risk. Firms often deploy predictive analytics to know when a business entity will require a loan much before the owner realizes it. Big data initiatives determine the borrower’s creditworthiness and their repayment capacity. So, big data is compulsory as it offers data lineage, data virtualization, and data visualization features.
24/7 Web Bots, Chat-Bots, Robotics & Robo Advisors
Internet Bot or Web Bot is designed to predict future events and consumer lending trends. Using the keywords, the intermediaries can type a question and get a reply from digital channels like web chat, face time and others. The AI-powered customer support interface helps the borrowers to make live interaction with the financers. The Digital Support Instant Chatbots blended by a wide range of technologies facilitates up to $10,000,000 in digital lending. They’re built with less cost and sustain longer when compared to the human equivalent. The Robotic Process Automation (RPA) digs the data out of the lender’s system. The human-trained robots are able to greet, say ‘hello’, read numbers, middle and initial name of applicant, house number, answer queries, initialise consumer lending account generation process, etc. The futuristic Robo Advisors accelerates the credit application processes, offer credit scores, set, and execute budgets, perform underwriting or credit control, trace borrower’s spending habits, and give advice on money management. As many as 85% of the online financial advisors are likely to become the first choice of the financiers as they’ll reduce inbound phone calls ratio by 92%.
Three of the best Digital Lending Solution Models of 2019
The digital lending firms have a choice of business models to choose from. They can go with Self Managed Digital Lending Software or hire a reputed IT vendor for this work. If not the two, a referral program is another option in the hands of the financiers. The year 2017-18 saw massive intake of the Private cloud hosted digital lending software. The bank-developed digital lending platform once installed remains grounded on the owner’s IT space saving a lot on the cost of ownership. The software need not be stored in-house rather; it may be moved to a Third Party Partnership Cloud Company. Thus, partnering with the right technology agent or third-party for the software-as-a-service (SaaS) digital lending solutions has become a trend among the leaders in consumer lending. We know how referrals and relationships escalate higher loan originations percentage, fill sales gaps, strengthen customer relations, offer stable funding, and generate new income through a pool of new applicants. Thus, the Referral Model allows you to make referrals to the digital lenders and even to those customers falling outside the lender’s guiding principles.
Adaptive Digital lending Procedures for the Adaptive Borrowers
The digital loan process play-off is simple, responsive, and fast to attain. Illustrated is the step guide for the digital loan borrowers to follow:
- E-Information System
Using internal and external sources, the system intelligently stores applicant’s data in a database. The stored data assets like the fiscal, social, economic, scientific, and technical data become the basis for decisions.
- E-Application Format
E-application is a software program that runs on your device. It uses an online electronic form, online process or online template for applying to the tender, bid, grant, funding requisition, or vital proposals.
- E-Processing Via Multiple Input Channels
The capturing, processing and execution of the complex credit applications takes place using the web-based front-end technology gateway such as online portals. The gateway helps form a secured connection between the financier’s website and the online applicant.
The specialized consumer lending houses provide underwriting guarantee payment while accepting the monetary risk for any liability arising from such a guarantee.
This includes everything right from the reviewing of the borrower’s credit history, credit application filling, releasing loan sanction letter, and final disbursement.
An electronic signature symbolizes an electronic sound, symbol, or a process that is logically associated with a contract and is adopted by a person with an aim to sign on the given agreement.
What you have is the model of digital lending supports vast loan categories like consumer loans, student loans, commercial loans, home improvement loans, mortgage, and auto loans. The idea of digital lending software is to make the borrowers’ lives more convenient and enjoyable. Credit goes to the smartphone generation that lives with a smartwatch, mobile, and tablet added with an Omni channel digital lending software. So, there’s everything for everybody in the digital technology space, all you need is to explore for a better IT vendor like BizAcuity and others.