For a large population within the country, a personal loan is considered the simplest and fastest way to arrange the funds in the case of a need or emergency. Be it meeting medical expenditures, buying a premium electronic gadget, touring to a new place, funding children’s higher education, or something else, getting funds through a personal loan is quite common. There are generally two ways to get a personal loan from an open market which usually comes at a higher interest rate and another one is through an organized financial institution like a bank or an NBFC.
In today’s fast-changing global landscape, taking a loan through a financial organization has become super easy as most lenders allow people to apply for a personal loan right through their smartphone. Yes, particularly after COVID-19, the world has witnessed a sharp increase in money-lending platforms providing instant personal loan approval and disbursal. If you are a person with a good credit score, hundreds of digital lending platforms can help you get money in a jiffy. Even, all the prominent banks have highly user-centric mobile apps available for both Android and iOS mobile platforms.
Let’s look at some of the most prominent technologies that have been driving the growth of digital lending platforms in India effectively and remarkably.
A perfect amalgamation of AI and high-end Machine Learning (ML) algorithms are known to smoothen and upgrade the digital money lending procedure for both lenders and borrowers. For example, it negates the obsolete management chores that are otherwise done by humans which resulted in more time and resource consumption. Let’s take the example of credit score checking and profile creation. Once a borrower enters his PAN details, the system automatically checks the credit score and creates the profile. The basis is that the system decides a pre-approved credit limit for the borrowers. Similarly, both AI and machine learning work together to establish long-term and fruitful customer relationships by shortening the time takes in these processes otherwise. This process is usually handled by AI-powered chatbots.
Moreover, the predictive study done by AI enhances the digital lending process by enabling financial institutions to concentrate on borrower engagement and retention. This technology is also used to detect any possible fraud that may downgrade the user experience of the borrowers.
Cloud computing has been playing a pivotal role when it comes to optimizing the digital lending landscape. For example, it streamlines the lending process by enabling automation related to it. This technique lenders to maintain high levels of competitiveness with the use of advanced technologies like Big Data, Machine Learning, Deep Learning, Artificial Intelligence, etc. Furthermore, by using cloud-based storage, digital lending platforms can stores data at a central place which helps in smoothening the loan documentation process and promoting unprecedented levels of transparency across all stakeholders including investors, borrowers, regulators, and lenders. Contrary to paper-based lending processes, cloud-based data banks provide superior levels of data integrity, scalability, and security to enable a safe and secure ecosystem for borrowers and lenders.
The role of data in the digital lending landscape is crucial as a large volume of data is used to ensure the delivery of high-end loan products and user experience. The data is mainly used for conceptualizing and delivering user-oriented digital lending offerings along with superior value and security. The advanced technology assists digital lenders enable data transformation, regulate and examine data to understand the borrowers’ profiles, and make the loan offerings highly customizable. The inclusion of data science technology in digital lending platforms is unmatched in a nation like India where idealistic and non-metro regions are yet to be discovered for various loan categories.
Today’s people want a smoother and faster loan borrowing process and the one that offers the same is more likely to close the deal. There was a when taking a 1-lac loan from a bank was quite cumbersome due to numerous formalities attached to it like document collection, address verification and others. However, with the emergence of newer technologies like RPA (Robotic Process Automation), things have become amazingly easy. For example, this technology helps in delivering an enhanced loan borrowing experience by automating various processes like loan application submission, profile checking and verification, and loan disbursal, etc. Above all, the combination of RPA with API (Application Programming Interfaces) gives quicker and easier access to digital loans while giving a larger possibility for disruptions, thereby allowing online lenders to access data seamlessly from any place and attract possible borrowers securely.
In a country like India, the underlying growth potential in the digital lending landscape is enormous due to rising per capita income and surging local economies. And, according to experts, this can only be tapped through the deployment of advanced programming technologies like AI. So, whether you want to start a new digital lending business or upgrade an existing program, look at these disruptive technologies that would make online lending seamless and secure for both the borrowers as well as the lenders.