In a world that never stops changing, and with customer expectations always on the rise, it’s time to harness the innovative power of technology to deliver modern lending platforms across lending types. Leveraging the entire life cycle of lending data – and adapting your business culture accordingly – is the foundation of long-term lending success. In this blog we’ll focus on the technology aspects of this type of transformation.

Major organizations all over the world have been collecting and storing data points across every aspect of their customer relationships. Whether it’s tracking lending information or monitoring loan performance, companies across the globe have access to a tremendous amount of data. Becoming the organizations of the future is all about relying on smarter technology solutions to analyze and amplify your data to add value, gain insights, and make better decisions.

Technology pushes the evolution of decisioning

Decisioning, the measurement of risk when it comes to lending, is the foundational aspect of lending. Today’s evolved decisioning is about so much more than the traditional idea of underwriting a loan. Modern decisioning creates a complex network from the interconnected data streams of the entire customer life cycle. How is technology making a difference? The influx of solutions and tools driven by artificial intelligence (AI) and machine learning (ML) technologies creates vast new opportunities for everything from marketing to future-proofing and business growth.

Customers go all-in on digital

Today’s customers are looking to do more online, especially with their mobile devices. Whether it’s banking from a smartphone or getting a new car loan from their tablet, the powerful combination of immediacy and convenience are elevating customer engagement and creating a banquet of innovations from digitalized banks and fintechs. One prescient example is the surge of Buy Now Pay Later (BNPL) options for everything from exercise equipment to new appliances and beyond – the use cases are ever growing.

Not only does this shift to fully digital channels mean a better customer experience, but it also represents access to even more customers’ buying and behavioral data. Finding, collecting, analyzing and forecasting on that data will set modern financial institutions (FIs) apart from slower competitors who still rely on legacy technology to get the job done.

Direct-to-consumer lending

Offering loans direct to the consumer, especially in a digital format, could easily be passed off as a relic of an earlier time. Except that even here, technology has created a renewed interest in direct consumer lending, and it’s being run by some of the largest FIs in the industry. Online lenders are a great example of organizations that have pioneered the use of data, not only to provide better customer experiences but also to create opportunities for their own growth. Real data-driven success will come from organizations that are focused on data as the backbone of a better direct-to-consumer business for partners and their customers.

The power of small business

While enhancements and innovation in the world of lending have a big impact on the average consumer, the effect on small and medium enterprise (SME) businesses could be even greater. To give this some context, SMEs account for three-fifths of employment in the U.K.; in the United States 51% of workers are employed by a small business and 49% of the country’s Gross Domestic Product (GDP) flows from small businesses. In the wake of the pandemic small businesses around the world have taken serious financial hits. Government stimulus programs have helped, but many SMEs are having an increasingly hard time securing loans to make continued business operations possible. Better access to actionable multi-dimensional data can and will improve the lending and decisioning processes, in a way that directly benefits businesses and leads to better economic recovery and growth … and that’s welcome news for us all.