The year 2020 was a study in cause and effect. While the coronavirus outbreak became a full-blown pandemic, measures to slow the disease’s spread caught on, in some cases triggering technology upgrades years earlier than planned. Before we zero in on advances in uptake and functionality regarding lending technology, let’s put the year in perspective.
To date this year worldwide, at least 2 million people have died from Covid-19, a contagion that attacks the lungs of mammals, and kills via blood clots, multi-organ failure, and septic shock.
Making matters worse, the long-term health effects on survivors of the disease can only be guessed at, while workplace disruptions, supply shortages, and a litany of distancing measures have slowed economies and strained public-health infrastructure around the globe. Americans can add to their list of 2020 woes a contentious presidential election against a backdrop of civil unrest, and the stingiest per capita stimulus response to the pandemic of any G7 nation.
It’s hard to find a “but on the bright side” rejoinder to any of this. Notable exceptions in the form of kindness, humor, and resilience notwithstanding, 2020 was a desperate, unwholesome, and tragic year, and it’s likely to be remembered in those terms for decades to come.
Technology on the rise
Meanwhile, something extraordinary happened with business technology in 2020. It boomed even as other sectors atrophied. Consider this. It took the tech-heavy Nasdaq Composite Index about 13 years to recover from the one-two impacts of the dot-com meltdown and 9/11, when the index lost about 75% of its value. Year to date through late December, the index has risen 36%, despite global lock-downs and a nose-dive in March and April. Zoom, a video-conferencing provider that took off in popularity as a way to conduct work-from-home meetings, gained about 145% in share-price value this year. Among other lockdown winners on stock exchanges this year were online retailers like Amazon, gaming console makers such as Microsoft, and a slew of lesser-known tech innovators in fields as diverse as online chat, cybersecurity, and biotechnology.
Lending technology enjoyed a significant boost as well, according to Elena Ionenko, co-founder and business-development chief at lending-software maker TurnKey Lender. “In 2020, technology around end-to-end digitization went from something lenders were just starting to think about to something many now see as an immediate must-have,” says Ionenko. “We’ve never had so many inbound queries.”
The reason? “Lenders of all types — from traditional players and retailers to medical practices, auto dealerships, heavy-equipment makers, peer-to-peer lenders, and others — gear up years ahead of schedule because of the pandemic,” explains Ionenko.
In other words, the Covid pandemic has opened the door to big-picture benefits to lenders such as:
- Loan approvals in minutes — and the ability to process millions of loans a day
- Intuitive web and mobile interfaces for unmatched client service
- 40%+ better applicant conversion rates, 200%+ better operational efficiency
- Convenience and flexibility that extends customer lifetime value
Lenders equipped on those fronts know the heavy lifting is getting done automatically, freeing them to focus on business development and other front-office considerations. On the other hand, lenders using legacy technologies to process financing applications, select risk-appropriate terms, make credit decisions, and collect installments may find they’re losing ground to rivals.
Much smarter lending
The advantages of end-to-end loan processing — at root, more repeat business, and lower operational costs — are accentuated by developments in “machine learning,” which allows for faster and more accurate decision-making.
Machine learning is an aspect of artificial intelligence that takes into account aspects of its environment to make predictions based on specific inputs, mimicking human cognition. Machine learning supports other aspects of artificial intelligence using algorithms and statistical models to perform many if-this-then-that type tasks virtually at once, drawing on patterns and inferences rather than explicit case-by-case instructions. In other words, machine learning takes relevant inputs and constructs mathematical models that bring “thinking” to bear on complex processes.
Such improvements matter in a world where technology-enabled financial service is shaking traditionalists to the core. Reflecting this transformation, the global digital-lending platform market is expected to approach $20 billion by 2026 for a compound annual growth rate of 19.6% through the seven years prior.
Besides cost savings, faster decisions, and happier customers, machine-learning supports benefits such as:
- Enhanced accuracy
- Higher systemic processing efficiency
- Large-volume data analysis for advanced marketing insights
- Streamlined compliance
By helping lenders push past old-school loan-application assessment, artificial intelligence and machine learning can help them avoid making subjective or discriminatory decisions without having to put too much stock in third-party credit scoring. Instead, applicant traits like spending habits, social-media comportment, and behavioral “tells” regarding financial obligations form more complete pictures of would-be borrowers.
Accolades for TurnKey Lender
As a pioneer of artificial intelligence in credit assessment and other aspects of lending, TurnKey Lender came in for praise in 2020.
- The 2020 Canadian Lenders Association commended TurnKey Lender for resilience in the face of adversity, and innovation in a time of crisis as the company worked to ensure the success of its clients.
- The financial-service consultancy Aite Group zeroed in on TurnKey Lender’s Unified Lending Management (ULM) Solution for particular praise in the categories of Client Strength and Product Features categories — and top prize as Global Innovator. “Any lender getting established in the consumer loan market should consider TurnKey Lender’s ULM platform,” according to Aite.
- The Financial Technology Report named TurnKey lender CEO and co-founder Dmitry Voronenko one of the top fintech CEOs in the Asian-Pacific marketplace.
- Elena Ionenko was highlighted as one of leading female opinion leaders by Global FinTech Series along with Carla Goshn, Visa’s head of emerging fintech, Peggy Alford, executive v.p. of Global Sales at PayPal, and Diana Biggs, head of innovation for HSBC’s private-banking unit.
Meanwhile, TurnKey Lender continued to innovate in 2020.
- The company rolled out its v7.3, a scheduled release that includes major new functionality enabling fully operational financing out of the box, updates to the existing features, and minor improvements.
- It revamped its mobile app to include face and document recognition as standard features
- Having made the grade for organizational oversight, vendor management, risk management, and regulatory oversight, TurnKey Lender was certified as SOC 2 Type II audit, the American Institute of Certified Public Accountants official seal of approval.
For TurnKey Lender’s Ionenko, the triumphs and milestones of 2020 came second to the company’s work toward re-stabilizing economies in the face of lockdowns, business closures, and other measures taken to contain the coronavirus. “We’re most proud that we were able to support our clients in getting get funding to individuals and enterprises in acute need this year — a support role we’ll continue to play in 2021 and beyond.”