7 Cool Facts You Should Know About Online Lending
Financial sector is changing - check out how!
Market-Inspector presents you with 7 cool facts you should know about online lending. If you are unsure of what exactly financial technology start-ups are, and what it means to get your business loan online - take a look!
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FinTechs In The Financial Sector
Today’s financial sector is facing a challenge from so-called financial technology start-ups (FinTechs). FinTechs provide digital platforms through which individuals and business pay, borrow or invest money. Experts debate which financial domain will be disrupted the most, but research shows that payments and lending are taking the lead. Although far from undermining the position of banks, FinTechs change the way we do business today.
The sea of opportunities within the FinTech world is growing every day. If we take a closer look at the area of lending, we notice the reoccurring concept of Peer-to-Peer lending (P2P). P2P is based on establishing direct connection between lenders and borrowers, in most cases without any interference from banks. The world’s leaders in P2P are United Kingdom, the USA and China. All countries became a hub for investments in innovation.
Use of Technology
One could say that some FinTechs are challenging the positions of incumbent banks. They create newer and more innovative ways of paying, borrowing or managing money.
P2P lending is often cheaper and faster than lending through traditional means. Why? This technology is based on algorithms, predictive modelling, and data aggregation that quickly calculates your “worthiness” as a potential receiver of a loan. Moreover, online lenders often are required to look beyond your credit score, and consider things such as your background, education or goals in life, to be decisive in getting the loan.
Experts predict that in the near future online lending could benefit from the use of blockchain technology. This means that lending process will be based on the usage of distributed database, where information is constantly updated and accessible to anyone. This in turn will make lending money even easier and faster.
FinTechs like to present their mission as the one that will reshape people’s lives. It certainly cannot go as unnoticed that their services are accessible to people who would not be able to borrow money otherwise. Especially in underprivileged countries where people do not even have bank accounts.