Over the past few years, numerous giants like Amazon and Tencent have stepped into the lending market, infusing billions of dollars. Such a huge amount of money in the market has boosted the speed of innovation and made technology more accessible.
Digital lending is proving to be a potent force in transforming financial services for people who haven’t been able to obtain due to various reasons. With digital lending, small and business enterprises (SMEs) can now obtain a loan in a matter of hours, avoiding the long and cumbersome bank procedures.
Today, going digital for lenders and borrowers has also become easier. And the business value of this shift is more than real. As per the report by Foundation Capital, “Marketplace lending will be a trillion-dollar market by 2025.”
Distinct markets, changing regulatory environments, and rising consumer needs have led to a wide variety of online lending solutions that are each tackling financial inclusion in different ways.
P2p or peer to peer lending is amongst the most popular model of alternative finance that enables an individual to obtain a loan directly from another individual cutting out intermediaries. P2p lending platforms connect investors and borrowers, set the interest rates, and enable transactions.
Crowdfunding is a method of raising funds a large pool of individuals—primarily online via social media and crowdfunding platforms. Click on the link here to know more about crowdfunding.
Invoice trading is a model of alternative finance specifically for businesses and small enterprises auction their invoices online, as a way to gain quick access to money.
Real business value rather buzzwords
The rapid expansion of Fintech has completely revolutionized how businesses and individuals borrow or invest money. Lending platforms sustaining in the market are leveraging advanced technologies to identify consumer requirements and offer services based on the analysis. Technologies like artificial intelligence, machine learning, blockchain, and big data are actually being implemented on the platform to assist:
- Online fund transfer
- Identification and authentication
- Calculating credit score
- Loan and investment management
- Personalized assistance to customers and more.
Technologies have proven to bring the most value to the lending businesses rather being just a buzzword. Thanks to the technology companies that help lending businesses in their digitalization process.
LaaS platforms on the rise
Considering the rising popularity of digital lending, there has been a constant increase in the number of online lending platforms. These platforms act as mediators for investors and owners while offering numerous benefits facilitating fund transfer. However, building a lending platform in-house might include various challenges
- Immense expenses (building, testing, and designing).
- Lack of sufficient knowledge and expertise.
- Might take months to develop a platform from scratch.
These are some of the major problems faced by lending businesses in their digitalization process. To cope with it, numerous IT companies have developed frameworks to foster the development of lending platforms. These frameworks come with modular architecture and pre-built features so that businesses don’t need to build everything from scratch.
Akeo Lending is one such solution containing most of the essential features required to build a p2p lending platform. The framework comes with modular back-and-front-end architecture that gives businesses a pedestal to build customized P2P lending platform quickly. In simpler terms, the framework can be easily customized to make the platform personalized with the required functionalities.
The digital lending landscape is constantly changing. Low-interest rates, better consumer support, rapid approvals, and intuitive platform interface, all of these lead to increased competition. Adding to the complexities of the digital lending ecosystem is its ever-changing nature, which makes it even tougher for lending businesses.
Innovation and market expectations will continue to alter and refine the digital lending landscape. Key players must continue to be progressive and adaptive to the changes. Moreover, they must constantly test, refine, and evolve their business models and value propositions based on consumer requirements and market forces.