Fintech is the present and future of the financial industry. With technology domination, every industry is encouraged to evolve to cope with the current trend, and finance is not an exemption from these changes.
Fintech has brought many benefits to the financial industry, especially in the lending sector. These benefits heavily focus on the lending process and accessibility of loan services to the borrowers.
Fast Approval And Funding
In some situations, traditional banks take weeks or even months to process loans. Fintech lenders, on the other hand, will only take a maximum of 24 hours for approval of your application and funding of your account.
Traditional banks are now starting to act accordingly to keep up with fintech lenders as per financial experts’ advice. Traditional banks have started to offer online loan applications and online banking to their customers as a part of their automation.
Easy Data Access
Years ago, banks and lenders would need to spend multiple hours or days to gather the necessary data for a loan application. Information such as credit and background checks took up to weeks to complete, but today, this information can be easily acquired online.
Now that the lender can collect this information online, they can analyze and know the applicant’s creditworthiness and calculate the possible risks, deciding if they will approve the loan much more quickly. With so much of your personal information now digitized and available online anytime someone needs it, processing loans has become faster and easier than ever.
Provides Alternative Lending Type
One way fintech has improved the lending process is that they offer various lending types to the public. Suppose a specific application is not qualified for the loan they are applying for. In that case, fintech lenders can suggest other loan options they can get given the applicant’s situation.
As a borrower, you can also easily compare all lending types in just a few clicks of a hand. Fintech lenders also have these comparisons ready through their website if you want to consider other lending options.
Easy Access Of Customer Service
Following up with your loan application has never been this fast and convenient. Fintech lenders make sure their customers will have access to customer service online, 24 hours a day, seven days a week. Customers can contact the lenders online representative through various platforms.
You can contact them through their social media accounts or their website and mobile application. Their line is open any time of the day, even past midnight, and the lender can quickly resolve issues through these means by the help of their chatbot who can answer generic questions and will connect you to a human agent when needed.
Offers Perks And Savings
Borrowing through fintech lenders will have many perks such as cut-down interest rates or processing fees as these lenders have cut down overhead costs as they are operating mostly online. Although traditional lending institutions such as banks have lower overall interest rates, the demand for loans will push their rate up to the roof.
In the case of fintech lenders, no matter how great the demand is, their operation will still be a minimum due to the automation they made to their company. When operating an online lending company, you will only need a small number of people to run the business.
Contactless Transactions
Applying for a loan online means that you will not have direct personal contact with the lender and their employees as the whole process will be carried out online. Even the funding of the loan will be made online. There is no need to meet these people in person.
A contactless lending transaction has become significant during the COVID-19 pandemic, where we are all required to limit contact with other people, especially those outside our household.
Additional Improvement Fintech Provides
Paying your loan can also be done online. Just like how you applied and funded your loan, paying it can also be done online. You can opt for automated loan payments to ensure you pay your loan on time and avoid paying a late repayment fee.
Fintech has become very useful during the pandemic as many people have started using online transactions in their everyday lives. Cashless transactions became a trend worldwide due to the fear of acquiring the COVID-19 virus through cash transactions.
Online banking transactions have also shown significant increases in the last few months since the pandemic started. This trend is expected to increase further as its popularity has spread out in all countries.
Summary
Fintech has given a lot of benefits to the lending sector for both lenders and borrowers. This is just the beginning of the fintech industry, and the future still holds many surprises in terms of technology. There will be more to look forward to in this growing industry of the new generation.