No credit scoring model will be able to tell you with a 100% certainty whether a borrower will return the funds or not. But for the lack of a better system, lenders rely on the existing models, use alternative ones, a combination of the two or develop their own, proprietary algorithms. The reliability and accuracy of the credit scoring model is the gatekeeper of your lending business. It’s what determines how much business you’ll get and how profitable it’ll be.
Your primary goal as an alternative lender is to maximize portfolio profits, and the first critical step in the process is onboarding. It’s like a first date. It sets the stage for the entire relationship. You can use automation software to gain process efficiencies, but it takes enthusiasm and creativity to truly engage the new borrower. Finance industry analysts say it’s an investment that pays back in spades.
The global digitalization is defined by the all-consuming drive to agility and quick solutions’ delivery. Companies recognize the need for wholesome automation for them to stay on the market, yet there’s still no definitive answer on whether it’s better to use monolithic or microservices architecture for a project. And the fact is that it depends.
Lenders are on a constant lookout for new demographics and audiences to convert into customers. And millennials aren’t just tech-savvy kids anymore. These are the people born between 1981 and 1996. So now they are somewhere between 22 and 38 years old and most of them are already operating on the lending market.
Since entering the lending automation space in 2014, TurnKey Lender managed to become the industry standard by which the depth and quality of automation of a lending business can be measured. Some of the biggest benefits company’s clients boast include a significant portfolio growth, an increase in operational efficiency, and improvements in the clients’ lifetime value. And for the people who are still undecided as to which lending automation platform to choose, we’ve decided to take a closer look at the benefits businesses powered by TurnKey Lender reap.
The alternative lending industry has enjoyed continuous, double-digit growth over the past several years. When will this upward trend plateau? When big banks approve more loans than they decline. In other words – we don’t see the dark at the end of this well-lit tunnel. Even though savvy lenders have already carved out their niche, new players will find plenty of unclaimed opportunity.
The world of investing and borrowing hasn’t been immune to change. And peer-to-peer lending is one of the fastest growing trends in the world of finances right now. As more and more people start to question the reliability of traditional banks, many of them turn to alternative ways to make money. And whereas before the rise of FinTech, p2p was only possible within a rather small community, with the modern lending platforms the concept can finally scale.
Like it or not, lending is one of the vehicles of progress. Thanks to lending, people get funding for their ideas, their entrepreneurial dreams, and business expansions, families get their first homes and a teenager gets their first car. And like all the other financial products and services, lending is evolving.
Direct lenders are well positioned to capitalize on the growing demand for non-bank loans. Consumer and SME borrowers are turning away from big banks because traditional lenders are declining more loans than they approve. Direct lenders who understand the dynamics of non-traditional funding can earn superior returns on their portfolio, without taking on undue risk.
Innovation is easy for no one. But staying in the comfort zone of outdated interfaces and technologies isn’t an option. With new players entering the lending arena and technology becoming more advanced and accessible, the speed of innovation has to grow as well.