How technology is revolutionizing the lending process
Perspectives of the Banking CIO | Wednesday, November 24, 2021
Digital lenders use both traditional and alternative data sources, advanced algorithms, and analytics to make secure decisions quickly and remotely.
FrÃ©mont, California: A modern, growing and robust economy rests on the foundations of increasing financial inclusion. It is about providing reliable and responsible providers with access to financial products and services to all individuals and businesses across the social spectrum at an affordable cost, in a timely manner and tailored to their specific needs. Technology has revolutionized industries around the world, including the financial sector, in recent years. Digital lending is seen as an easy solution to a tedious banking process that also ensures close monitoring and in-depth analysis.
The process of providing loans that are requested, disbursed and managed through digital channels, in which lenders use digitized data to inform credit decisions as well as to strengthen intelligent customer engagement. The Covid-19 crisis has opened more than one door. As the world returns to normal, the pandemic has created opportunities for innovation, learning and behavior change.
The technology is used by digital lenders to analyze the history of the loan seeker. Lenders use digital data to make faster, more automated, and more accurate underwriting decisions. Digital lenders use both traditional and alternative data sources, advanced algorithms and analytics to make secure decisions quickly and remotely.
Customers are acquired by digital lenders through a combination of digital marketing tools and digital integration channels, which are complemented by strategically designed touchpoints and physical referrals. Customer identification is an essential part of acquisition. Before lending, digital lenders used technological innovations to access verified government and private sector records.
The digital loan process
Overall, the digitization of the lending process has yielded mixed results, with a strong emphasis on hybrid models, where a mix of technology and affordability offers the most viable and scalable proposals. The digital loan can be divided into five categories. The digital loan process encompasses everything from acquiring and onboarding a customer to appraising, disbursing the loan and receiving payments.