Why are app-based digital lenders picking up? What's the future?
Read on to know everything about digital lending apps and what the future prospects are.
What is Digital Lending?
Before diving right into what is the future of digital lending and why is it picking up in India, let’s discuss what is digital lending. As the name suggests, digital lending is a lending procedure where the borrower and lender use technology to complete the lending process end-to-end using digital mediums. These days, lending has become easier and quicker with the introduction of mobile applications. The borrower usually downloads an app on his/ her smart phone and applies for an instant personal loan or loan of their choice to get the loan amount in their bank account within minutes after quick verification and approval.
Reasons why app-based digital lenders are getting popular
There are various reasons that app-based digital lenders have gained popularity over the last few years. Owing to technology, there are many upgrades and easier processes for consumers. Here is a list of few reasons:
1.
Quick decision making
We might not realize but lending process has become much easier and convenient these days. With digital lending apps, the consumer has the power to make decisions quickly anywhere, anytime and get loan approval instantly. Earlier the loan approval used to be a tedious task with a lot of to and from with banking facilities and officials. Due to automation of most of the processes these days the loan origination speed has improved drastically.
The digital lending apps are completely tech-based. From automated calls to cloud-based services, and data sources lenders have a clear picture to judge applicant’s financial strength.
With machine learning in the picture, loan processes are smoother and secure. Lenders use fraud analytics to identify applicants and their authenticity. Loan approvals and contracts are just fingertips away with facilities such as e-signatures.
It is a common misconception that digital lending apps do not follow rules and regulations set the supreme banking authorities. However, digital lending apps are absolutely safe and comply with all the rules and regulations set by the Government of India and the RBI. From seeking data to authenticating loan processes, everything falls well under compliance.
Unlike the traditional lending processes and lenders, the digital lending market is organized and strives to improve their product and services for customers. Digital lenders monitor their apps on a regular basis (weekly, monthly, and quarterly) as and when required.
The digital lending companies rely on consistency to bring best of their services to the customers. They launch many offers for new as well as existing members. They work towards boosting relationship with the customers by providing personalized services as well.
People of Generation Z and Generation Y do not have much experience with the banks and physical operations in the financial institutions. They rely on technology and digitization to fulfill their financial needs irrespective of loan needs or other banking services. Digital lenders empower them and attract these people to meet their loan needs easily and quickly at their own convenience.
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