The present COVID-19 situation has cleared one vulnerable situation across the financial sectors. Financial organizations or banks that had adopted the blessings of information technology in their operations much before the pandemic began have been proven resilient when the crisis hit. There is a blessing in disguise that banks are holding a few Non-performing loans that they are disbursing during the peak time of crisis. That is called Fintech lending. It has become a new regular now. Probably, this is the one way of accelerating marketing growth. In the era of digitalization, digital lending is transforming financial growth and enhances customer growth.
The Concept of Digital Lending
The upsurge in demand for the fintech loan segment has brought a drastic change in the lending process. Now, there is no particular requirement of paperwork required to approve your loan. The process of loan disbursement is occurring within a short period. The digital lending process has simplified the process as now the paperwork has been replaced by the digital or electronic method. Those who all want a car loan, home loan, education loan, even personal loan- every kind of loan can be processed in this digital credit method. Thanks to digitization, that has made a complicated process much simple. A lending process that is associated with top-class information technology.
How is Digital Credit Simplifying the Entire Process?
We live in the digital era where millennials and Generation Z, so the need for digitization has had to come at a certain point in time. With the help of touch or click can do wonders; just like that, the concept of digitization came and loved by a large chunk of the users.
Let’s navigate the particular technologies that are helping the digital lending segment-
Robotic Process Automation
This cutting-edge technology is gaining momentum in the era of the digital lending process when everything happens within a short period. Documentation automation and enterprise automation are the two most important weapons for people to fetch the customers’ necessary details with top-notch technology.
AI Credit Score
AI credit score enables banks to act as a competent estimator to determine who will repay and how this process will be. In this way, banks can have a proper track record of customers’ loan repayment system in the granular format. The available data will be valuable to figure out the dynamics of the market.
Incorporation of Machine Learning
As mentioned, banks and other financial organizations that lend money to companies prefer to use the AI model for risk assessment. In the past, lenders used to assess the income and the available fico score of the borrower. Thanks to the technical advancements in the deployment of ML, they can assess an individual digitally. It will predict whether the person will be a defaulter in the future or not. This entire procedure is known as the “Alternative Data” collection of them would be a borrower.