It is obvious how technology has changed virtually every industry. The popular online retail stores have seen a boom. The media, travel and the hospitality industry among others have all been impacted positively by technology. The financial sector is not left out. We can see this in the innovation of financial technology (FinTech) applications and how cash loans have improved over the years. It is adding some flair and ease to how cash loans process is carried out in this age where information reign supreme.
The Loan Process Years back
If you run small business years ago, the manner and way people source for capital through cash loans cannot be compared to what holds today.
You could follow the parity path and approach investors or you could become creative and search for funding from friends and family when you need cash loans.
But if you decided to receive funding from the conventional financial institution, your best option is to go to your local bank and queue up for cash loans.
You know what to expect if you’ve ever put in for cash loans before. You invest time and effort planning, mailing, and then waiting, a seemingly infinite number of days. And you hear from the bank after weeks or even months that you can?t afford the cash loans. Little wonder why Bill Gates stated that “Retail banks are dinosaurs” when it comes to loan processing. It is an enormous task that may eventually not succeed.
Why is that now so different?
Well, there are several factors which separate today?s cash loans from traditional loans. For most business owners it’s a slow process and difficult one to apply for cash loans in the banks. So if the bank or you decided that the cash loans were not the right move, you still look for way to raise the funds.
In 2007, online lenders entered the lending market for small companies to provide other funding options to business owners when they are not eligible for business cash loans or have no time to wait for one. These new lenders are totally different from what holds 20 years ago while applying for a cash loans.
But technology took small businesses from the dinosaur ages to the current jet age where things go on fast implementation. Technology now rules and here are 5 ways technology has changed how we treat cash loans in this age.
1. Speed and Effectiveness
Online application processes for business loans are automated and more effective and only request answers to a few questions.
Also, you won’t spend hours putting all the documents you need in your loan together. Lenders generally require less documentation for your loan, and most applications can be downloaded directly to your computer. And you won’t have to wait weeks or month for your bank to get the capital you need to take your business to the next level. Lenders will send you an approval in minutes to hours, sometimes in a few days and you receive the money you applied for.
Instead of relying on managers and outdated programs, they can quickly approve your business loan through efficient underwriting algorithms.
In the end, everything comes down to this: with fast technology, the process of applying for cash loans for small businesses is simpler, faster, and easier for businesses.
2. Credit Score Losing Relevance
Why do activities on your mobile phone number and social media account used for some payday loans?
It is getting outdated to get a loan based on your credit score!
In recent years, several technology start-ups have developed ways to finance cash loans that do not rely on traditional methods. Startups now look at the abundance of information on applicants, like activity on their social media profiles, how much they use their mobile phones and if they send text message frequently or not.
The smart business platforms believe that these data make it faster, cheaper and shows more accurately whether the applicant can repay the loan through an analysis of how they live, decide and interact with others. If every data required falls through, the money is passed to consumers just minutes after the loan has been applied for and approved.
3. Digital and Enhanced Customer Service
Perhaps the most important form of financial and banking disruption for FinTech is through customer care. In the past, a customer service department was important to any finance company. Everything involving the handling of cash loans and financial issues required professional staff to help solve problems and assist people.
In a report in 2018 Chatbots became the standard for interaction between customers. It is an AI that evolved and has become an intelligent tool that automates the process.
Though this department still needs the human touch in the entire process, the advent of chatbots has drastically added some uniqueness to the processing.
4. Enhanced Online Banking Tools
Traditionally, banking was something done in a non-virtual world. People would go to their bank to withdraw money, transfer from one location to another, and settle their financial issues. You literarily speak to a friendly worker and interact with humans in a physical retail house. Nevertheless, these are fast becoming obsolete. Online banking is increasingly complex daily, with just the push of a button, we can transfer funds or pay for goods.
We can move between banks to choose products that meet our requirements through sites like finance.co.uk; the list goes. We live in an age of access to the telephones, tablets and laptops to assist our banking system. This is no doubt one of the transformations the banking sector has seen in recent times.
5. Improved Fraud Detection Mechanism
The investigation of fraud is now an equivalent effort by both humans and machines. The system would help track possible current and future fraudulent transactions, but it’d be up to the personnel who have been trained to follow up on the outcomes, to check the information and determine whether or not there was fraudulent business on the account.
AI has gone beyond the capacities of the people who design it, and they are now starting to detect and identify fraud. The machine tracks the history of a victim and then calculates and predicts the probability of fraud judging by past patterns. All this can be done at an even faster speed than human beings.
Generally, these are all just a few areas in which innovation is affecting the way the finance sector and cash loans processing.
For years we have known that technology will go so far as to make it more effective than the people who produced it. And the actual problem is that there is a very strong case for a machine-based world. They are cleverer, faster, less susceptible to mistakes and also much cheaper.