Fintech platforms have disrupted traditional financial service providers with their advanced technology solutions by making them available to the masses. Traditional banking systems are marred with legacy systems devoid of innovation. They lack agility and expertise to develop customer-centric financial products and services catering to the immediate needs of the customers.
Both banking and non-banking financial service companies have not undertaken the importance of making lending processes smooth for the customers. Whenever a borrower approaches a bank or an NBFC for any loan, firstly, the requirement of collateral is a must for accessing credit. Secondly, the higher cost of service for a house renovation loan or travel loan makes it viable only for larger loans like corporate or mortgage. Lastly, taking a loan in a traditional setup requires 10-15 days for approval, which is time-consuming if somebody needs credit urgently.
While access to credit hasn’t been easy for long, digital lending solutions have revolutionized the lending industry. The lenders take less to time underwrite digital loans by using customer’s financial and transactional data over an API-driven approach, hence deliver quick loans. Fintech digital lending platforms are using tools like advanced analytics, machine learning models, and cost-effective digital channels to provide products in the shortest possible time.
With today’s lending solutions, the 4P approach — product, price, place, and promotion — has been bettered by a 4C model — customer-friendly solution, cost-efficiency, convenience, and communication. How has this led to the rise of digital lending?
Inclusive Platforms
The digital lending platforms led by the fintech revolution have made the lending process more inclusive by offering customer-friendly solutions. They have provided the access to a wide range of financial products. The easy access to credit has enabled masses including underserved customers and businesses with better and quicker products and services cost-effectively and engagingly.
Driven by heavy research and development, the new-age fintech providers are driving the innovation. It has enabled underprivileged communities and cash-strapped businesses to access good-quality credit products. One of the factors responsible for easy access to digital lending solutions has been the easily available internet and large-scale penetration of smartphones in Tier 2 and Tier 3 cities.
Easy Underwriting
Furthermore, digital lenders do not require mortgages to underwrite a loan application. Even the repayment of loans has been structured to incorporate methods like real-time payment deduction mechanisms from customer transactions on POS and normal EMI/timely repayments on their apps/websites.
Effective Communication
Apart from the seamless process of providing credit, digital lenders like CashBean emphasize communication with the customer. It is vital to maintain a loyal customer base. The companies are investing in creating a cell for customer services, a dedicated team for managing customer relationships, and much more. The investment might seem much but in the end, the return on investment is worth it.
While hassle-free delivery, minimum documentation, and amount being disbursed directly into the customer’s bank account are the known benefits, companies are thriving to maintain total transparency and make customers aware of every minute detail about fees and other charges to build a certain trust by addressing all their concerns.
The companies are using social media handles to address customer queries, and resolve all issues within 24-48 hours. Even the company websites and user-friendly apps are 24/7 available channels for customers to engage with the platform regarding their doubts.
The digital lending platforms have gained popularity among the masses due to the above-mentioned factors but with the ever-changing technology, the lending ecosystem will continue to add new players that will be ahead in terms of serving the customers. With more players, there will be competition among platforms that will largely benefit the customers.