The lending industry has changed a lot in the past decades due to the advancements of technology.
It’s been long since we’ve had to be physically present to obtain a loan, and nowadays this is done on the Internet. But was this change in approach made to it more convenient to the user?
Yes and no. Online lending was born because of a financial crisis where obtaining a loan was very difficult. Banks would require you to have a squeaky clean credit and be in good financial health for you to obtain a loan.
This made it difficult for a lot of individuals to obtain any kind of loan, whether that’s a personal or business loan. The fact that financial institutions were also subjected to tough regulations didn’t help the matter, and it only made it easier for online lenders to step in when necessary.
A very different kind of lending was born because of it. It gave birth to a type of lending that didn’t require you to have perfect credit or be in perfect financial health. It gave us the option to obtain a loan with only a few clicks straight from our smartphone or computer. And it was all made possible thanks to technological advancements.
The best thing about it is that it forced the banks’ hands in changing the way they do business. These establishments were so successful in the way they did business that it forced people away from banks.
Naturally, banks had to find a way to cope with it, and they did by offering the same.
In this article, we are going to tell you how technology has changed the lending industry.
1. The Internet
The internet with all of its services has become more and more accessible to the common people. It wasn’t long since we only had 30 GB of internet per month.
Nowadays, most providers offer unlimited GB because it has become so popular. The internet is a virtual space where a business can live, operate, and thrive.
This is precisely what it offers the lending industry. Without needing to wait long lines to obtain your loan, and risk being rejected because of your bad credit, the internet has made it convenient for both the lenders and borrowers to go about their business.
All a borrower has to do to burrow a loan is simply go the lender’s website and apply for it. This approach is precisely what makes these financial institutions so highly sought-after. Having the option of skipping long lines is precisely what they offer to each and every borrower and it’s all thanks to the Internet.
2. Modernization Compared to Outdated Dinosaurs
A very popular quote from Bill Gates has recently resurfaced calling the banking industry an “outdated dinosaur”, and this statement is precisely why the lending industry has grown so much in recent times.
Way back in 2014, the top 14 lending companies in the U.S. registered $15.2 billion in loans. Those numbers are worth taking into account when discussing the potential of online lenders.
Partly to do with this is the fact that lenders have twigged their businesses to accommodate the people. With a fresh and modernistic approach to lending money, they’ve managed to steal a large portion of the banks’ business.
When obtaining a loan with a bank, you have to go through a very hectic process of inspections and signings. And at the end of the day, you might well be rejected because you haven’t paid off your credit.
This is a very outdated approach that puts the industry in more danger of becoming obsolete.
If we take into account online lenders such as BellwetherCap where obtaining a loan is only a few clicks away, then we can see why some of the greatest minds on our time think like that in regards to banks.
3. Innovation Through Technology
Innovation is what drives our world forward. Without it, we’d be stuck in time and register no progress what so ever. But our world is filled with people that are eager to solve some of the core issues society faces.
As it stood way back, banking was an issue that needing solving fast. Through innovation and expert integration, we were able to bring the banking world to its knees by utilizing technology.
There are a number of ways how the lending industry has changed through innovation, and we will talk about that in a minute.
We talked about how convenient it is for you to obtain a loan nowadays without needing to go to the bank. But let’s do a quick recap and touch on a couple of other things.
For starters, you don’t need to be physically present and all you need to obtain a loan is your laptop, desktop PC, a tablet, and of course, a smartphone to do it.
Access to the internet is also required, but we’re banking on the idea that you’ve got that covered already.
· Speed of Transaction
A very big deal for any small business is having your loan approved fast and successfully. In addition to being rejected by your bank, there are also extremely long waiting for queues before being approved of your loan.
On average, it takes around 26 hours for a bank to approve a loan for a small business. That’s 26 hours that might do you more harm than good. Furthermore, it will take an additional two to three days before you could actually have the money to spend.
With online lenders, the application is completed in just fewer than 30 minutes. In addition to that, you won’t have any fears of rejection and the cash will be in your hands in the next 24 hours.
The speed of transactions is a highly praised functionality that online lenders make possible through innovation and technology. There are many other ways how technology has changed the lending industry for the good, and these are some of the most important ones.