Reinventing credit with the power of technology

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In a constantly changing world where customer expectations are always on the rise, it’s time to harness the innovative power of technology to deliver modern lending platforms for all types of lending. Leveraging the entire loan data lifecycle – and adapting your corporate culture accordingly – is the foundation for long-term loan success. In this blog, we will focus on the technological aspects of this type of transformation.

Large organizations around the world collect and store data points in all aspects of their customer relationships. From tracking loan information to monitoring loan performance, businesses around the world have access to a huge amount of data. Becoming the organizations of the future is about leveraging smarter technology solutions to analyze and amplify your data to add value, gain insight, and make better decisions.

Technology is driving the evolution of decision-making

Decision making, the measurement of credit risk, is the fundamental aspect of credit. Today’s advanced decision making goes far beyond the traditional idea of ​​taking out a loan. Modern decision making creates a complex network from the interconnected data flows of the entire customer lifecycle. How does technology make the difference? The influx of solutions and tools driven by artificial intelligence (AI) and machine learning (ML) technologies creates vast new opportunities for everything from marketing to business sustainability and growth.

Customers go digital

Today’s customers are looking to do more online, especially with their mobile devices. Whether it’s banking from a smartphone or getting a new car loan from their tablet, the powerful combination of immediacy and convenience increases customer engagement and creates a banquet of innovations from banks and digital fintechs. A premonitory example is the rise of Buy Now Pay Later (BNPL) options for everything from exercise equipment to new devices and beyond – use cases keep growing.

Not only does this shift to fully digital channels mean a better customer experience, it also represents access to even more purchasing data and customer behavior. Finding, collecting, analyzing and forecasting this data will set modern financial institutions (FIs) apart from slower competitors who still rely on existing technology to get the job done.

Direct loans to consumers

Providing loans directly to consumers, especially in digital form, could easily be seen as a holdover from an earlier era. Except even here, the technology has sparked a resurgence of interest in direct consumer lending, and it’s managed by some of the biggest financial institutions in the industry. Online lenders are a prime example of organizations that have pioneered the use of data, not only to deliver better customer experiences, but also to create opportunities for their own growth. Real data-driven success will come from organizations that focus on data as the backbone of a better direct-to-consumer business for partners and their customers.

The power of small businesses

While improvements and innovation in the credit world have a big impact on the average consumer, the effect on small and medium-sized enterprises (SMEs) could be even greater. To give a bit of context, SMEs account for three fifths of employment in the UK; in the United States, 51% of workers are employed by a small business and 49% of the country’s gross domestic product (GDP) comes from small businesses. As a result of the pandemic, small businesses around the world have suffered serious financial losses. Government stimulus programs have helped, but many SMEs are finding it increasingly difficult to obtain loans to allow continued business activities. Better access to actionable multidimensional data can and will improve lending and decision-making processes, in a way that directly benefits businesses and leads to better economic recovery and growth… and that’s good news for all of us.

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