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How real-time data has transformed finance

Real-time data or lending 3.0 has been a game changer for the lending industry. It means that lenders can now carry out all their transactions and interactions with customers in real-time.

That, in turn, enables them to make quicker and more accurate decisions that improve both their operational and financial efficiency, but also customer outcomes. It also helps them to remain compliant with the relevant regulatory requirements as well as in the fight against fraud.

Previously, lenders had to process thousands of loan applications containing vast amounts of data manually and then verify it to make sure that it was correct. This was an inefficient process and was open to errors and bottlenecks of applicants waiting for their loans to be approved.

Instant lending decisions

The main benefit real-time data brings is the ability for lenders to make instant lending decisions and give access to funding to those customers that need it the most. Because of the improved speed that real-time data affords, more than 90% of deals can be approved in a matter of seconds after the customer has submitted their loan application.

If done successfully, fast loan approval can result in higher customer satisfaction levels. Because they are happy with the swift and efficient service that they have received, and, more importantly, their loan was approved, they are more likely to trust the lender and remain loyal to them, becoming a repeat customer for other products.

That way, lenders can build up a strong customer base and enhance their reputation, which is essential in retaining their existing clients and winning new business. By building on this, they can expand their reach even further, if they have aspirations to be a national or even global company.

More accurate decision-making

Real-time data also gives lenders an up-to-the-minute or even second view of a borrower’s financial situation. This greater insight enables them to make far more accurate and informed lending decisions, rather than relying on historical data that may not fully reflect the borrower’s current circumstances.

This provides a huge advantage to borrowers who may have previously been turned down for a loan or overlooked because they had an outdated or incomplete credit profile. It also ensures that lenders are making a fair, consistent and transparent decision every time in the approval process, for all borrowers.

Additionally, knowing about a borrower’s specific situation, it enables lenders to tailor their decisions to meet their particular needs. This will help the borrower to meet their financial objectives in the short and long term.

Greater operational efficiency and workflow

By harnessing the power of data analytics, lenders can also streamline their processes, enabling workers to focus on more critical strategic business tasks and saving on labour costs. This can result in significant cost reductions as well as better fraud detection and regulatory compliance.

Through the use of advanced artificial intelligence algorithms and machine learning, lenders can quickly process large amounts of data, identifying key trends and patterns that will shape their lending decisions. It also saves vital time on having to collect and analyse data and assessing a person’s creditworthiness manually.

In terms of regulatory compliance, real-time data allows lenders to better monitor a borrower’s activity and behaviour, and detect any potential risks that may occur. It also enables them to remain compliant with anti-money laundering and know your customer regulations, while providing a level of trust to customers that everything is being done by the book.

Providing better access to capital

Thanks to the advance of real-time data, lenders can now target new markets and a wider customer pool. This is a win-win for both lenders and borrowers.

On the one hand, it allows lenders to diversify their portfolios and, thus, spread their risk. On the other, it gives the borrower access to funding that may not necessarily have been available to them previously, which has traditionally been a barrier for startups and small businesses under the mainstream banking system.

Lending 3.0 is here and it has already made big strides in revolutionising the lending sector. It’s helping lenders reach a wider and more sustainable customer base while enabling borrowers to receive much faster and fairer lending decisions, as well as access to the funds that they need when they need them most.



Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 06 July, 2023, 10:53Be the first to give this comment the thumbs up 0 likes

Interestingly, at a Financial Brand podcast I listened to yesterday, TransUnion folks were saying, current snapshot data provides a very limited perspective to lenders and that trended / historical data provides a better basis for underwriting loans! 

Keen to know what you exactly mean by realtime data: (A) Realtime access to current snapshot data only OR (B) Realtime access to current snapshot and historical data?

Chirag Shah

Chirag Shah

Founder and CEO

Nucleus Commercial Finance

Member since

05 Jun 2023


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