Moneylending as a business doesn’t have the best reputation. The sheer volume of paperwork involved as well as the fact that it takes a long time to process your request means that people are often waiting for days and eventually head to businesses that aren’t so legitimate in their dealings. Technology has helped people take loans to the point that you no longer need to go to a bank or any other brick and mortar enterprise.
Financial technology or fintech is one of the biggest paradigm shift in the financial sector recently. Companies like NettiVipit which use technology to give loans are changing the way in which people access debt money.
How does technology help?
Money lending is an old business. Someone in need borrows money from a lender and pays it back in full or in small installments with interest over a small period of time. Until recently, moneylending was all about paperwork and forms and background and credit checks. However, the internet has enabled a more transparent way of borrowing and paying back the money.
Let’s look at how:
- It cuts costs: When a business is run online, it is cost-effective. It saves a lot of money and operational hassles of running multiple branches across multiple locations and also to build a customized IT network. Since all of the logistics are off the table, online money lenders have a more efficient operation on their hands. This effectiveness means one major benefit for their customers – cheaper loans and more extensions as well.
- Data drives company operations – While credit scores are a cornerstone for lending, online lenders have more access to a potential borrower and can do a more thorough background check on their customers. This means that the lending process is more inclusive and takes into account that a credit score isn’t the only thing that limits people from borrowing money.
- It’s faster – Technology has been consistent across sectors. It makes things faster. Financial technology is the same. It makes the lending approval process easier. Operations like underwriting can be automated and borrowers are able to access their loans much faster.
While a lot of people are wary of technology, it has become impossible to operate without technology in your business today.