Wednesday, May 22, 2024

Top 5 Lending Technology Trends to Watch

Competition in FinTech is fierce. With new startups entering the stage each year, finding investors and pushing technological limits, its added value that counts. Read about the most popular lending technology trends to get inspired. You can incorporate these into your product and get ahead.

Trends and their implications

1.              More accurate credit scoring. Digital ecosystems created large data pools, full of personal information about users. Their monthly income, spending habits, in-app behaviour, the need for specific loan products and services and much more, drive the opportunity for a more personalized experience and services (more on that in a minute). The first step, however, is the need to make sense of this data.

To offer better and more affordable products, lending companies have to understand their users. Accurate credit scoring is an absolute must. With personal data like name, age, bank credit score, information about cash flows and financial statements, FinTech firms can minimize the risk of offering unpayable loans.

2.              Big Data-driven personalization of lending and marketing offers. We have already touched on the subject a little but let’s explore this more. With all this data mentioned before, business operations can grow and get even more optimized than before. The problem is that the real challenge and opportunity come not with internal but external usage. The data should not only help minimize risks but also drive customer experience.

Tailored services, pricing and even UI options (like dark mode, bigger font, etc.) should be used to enhance app browsing. The more clients feel at home, the more they are willing to use your product.

3.              Increased availability of smaller value loans. “Buy now pay later” loans storm the market. For a good reason – they serve especially Millennials, who don’t have credit history and borrow from family and friends. Their savings are humble but their needs are not. Classic financial institutions don’t give these kinds of loans because of even more humble profit margins.

This is an opportunity. The smaller loans you give, the more you can have in the end. Not everyone is credible but almost everyone needs small cash from time to time.

4.              Even closer cooperation with small and medium-sized businesses. Small businesses operate faster than large ones. Trivial statement but many companies tend to forget about it. The needs of small organizations are mostly digital. From merchant services to quick loans for end-of-the-month survival, these organizations need flexibility and out-of-the-box thinking.

Loaning money to massive companies or many, previously mentioned, individuals is something the market already has seen. Addressing the needs of a true economic engine that are SMEs, is harder. It demands flexibility and tailored offering but the market goes in that direction.

5.              The rising role of strategic partnerships. Third-party partners can really make your product stand out. FinTech companies are now interested in more substantial cooperation. You take a loan; you get a decreased bill for electricity. You take a loan; you get a discount in your favourite restaurant chain. Affiliations are very popular in marketing, now the concept enters the FinTech market.

Address real pain points

Big Data enables companies to understand their customers better than ever. With structured data, you can pull any information you want and draw more accurate conclusions. Use it.

Don’t offer inaccurate or badly priced services. Help individuals and companies alike with their daily struggles. Address real, not imaginary issues. The key to success in FinTech comes from staying close to the customer. Achieve that with a technological advantage.

Suit up to be a FinTech hero

That comes in many forms. Applications need seasoned experts. Quality lending software development is not something that is stumbled upon on the way to work. There are many companies that can be your provider but not many of them can be your real partner.

The ability to listen to your specific needs is a must. Incorporating solutions into performing FinTech products is something some vendors struggle with. It’s one thing to write code, it’s another to create a product that follows trends and surpasses them. If you want your application to last, partner up with seasoned FinTech software developers.

Sam Allcock
Sam Allcock
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

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