FinTech Lending leverages data, technology, machine learning, and marketing to better identify, underwrite, and serve customers. The combination was groundbreaking and swept businesses across the industry. The initial group of FinTech lending companies that debuted over 15 years ago included Zopa, Prosper, LendingClub, and PayPal. Companies like Amazon and other familiar names were added to the mix after 2010 to focus on marketplace lending for consumers of small and medium businesses.
In today’s landscape, this is the foundation for all new products in the lending sector. A series of technology-enabled startups have emerged, providing more accessible, affordable, and faster access to credit. Gradually, with the advent of machine learning models, upgraded technology infrastructure, and access to a large amount of data, FinTechs can focus on their value propositions to the customers.
FinTech Lending 2.0 – the new wave of disruption
With more data publicly available, cheaper FinTech infrastructure, open-source AI capabilities, and commoditized marketing strategies, FinTech lenders need to start looking elsewhere to remain relevant.
FinTech lending 2.0 focuses on more than just data, technology, digital marketing, and machine learning models. They focus on finding innovative ways to de-risk the borrower to drive down default rates, resulting in more competitive pricing and broader reach.
Global trends in FinTech Lending
The pandemic made us realize how closely connected the world is. Regional trends may soon start impacting other businesses, and it won’t be long until a significant shift in the global financial landscape. As we move forward, it is important for businesses to look at the current trends globally and what they could mean for the future of lending and the financial landscape beyond 2022.
Barriers to FinTech Lending 2.0
With the rapid strides that digital lending has taken in recent times, there are certain challenges that are yet to be fully addressed, and companies thinking of upgrading should take account of these.
Strategies that will define FinTech Lending 2.0
How traditional banks and financial institutions can grow in this new era?
Traditional banking providers lag behind their more tech savvy FinTech competitors, but there are areas where they hold a distinct advantage with a potential to leverage this transformation trend. Let’s take a quick look at some of these opportunity areas.
How will the lending industry look in 2022 and beyond?
It is predicted that digital transformation will play a significant role in how businesses function in 2022 and beyond. In the wake of the global pandemic, we will see struggling businesses rise from their own ashes, transform their way of working and develop an integrated digital strategy.
For those seeking to access the lending industry or enjoy the benefits it offers, 2022 is the right time to start working towards it. This is an exciting time for the financial services industry with significant potential to access the technology in its formative stages and help build their business.
Business Consultant, Platform and Product Engineering, Brillio
A seasoned Presales and Business Consultant with expertise in handling digital transformation projects with a focus on solving customer problems in collaboration with business and internal stakeholders. Experience in delivering value for clients across Pharma, BFSI, and Retail verticals.
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