With the introduction of Artificial Intelligence or AI, a paradigm shift occurred around the world. No matter which industry or market you are in, you must have been sensing the way AI is changing and molding your experience. Now, do you know that using AI for the digital lending marketplace is a current trend?
Currently, in India, the online lending market constitutes 15% to 20% of total personal loan market. In the coming years, this is assumed to grow to 50% of the loan market. This can make one think how the trend can go on with ensuring complete financial prudence? Well, studying the behavior of the potential debtors, their way of reaching out and choosing a service, all of these can be done with the help of AI while also enhancing the customer experience quite a few notches. So, in the following points, we are going to discuss how AI is causing paradigm shift in the digital lending market. Read on to know more.
The traditional system of lending is that you, the borrower, are going to the bank or the financial organization with some predefined documents that will certify whether you can get the loan or not. The office will be responsible to process the request of loan while studying your papers so that your application gets through. Now, this whole system will be replaced with AI. The documents will be not papers anymore but data that can be transferred online. The person who manages your data and processes the loan application will be not a human being but a machine, essentially AI which will make sure that the application gets through even when you are not applying within the traditional working hours.
In the traditional banking process, the decision making part is often a lengthy one as well as complicated. In fact, because of the error of judgment, your application might end up being rejected. However, when AI is getting introduced in the online lending system, it is just taking seconds to scan through the income and credit history of the borrower, the eligibility of the application and the security of the loan. As a result, the process of getting the loan application sanctioned is faster and error-free.
For a lender, it is necessary to know whether the lending decision is right or not. To sustain the business and keep the value high, it is necessary for the lender to understand how secure the money will be if the borrower delays the payment. It is impossible for a human to trace all the documented and undocumented credit history for a potential borrower. On the other hand, the AI will be able to solve the issues within just a few seconds. From tracing the whole digital and credit footprint of the borrower to making sure whether the lending decision is right or not, AI will minimize the risk factor in the online lending industry.
When the digital lending market is evolving with time, it is becoming imperative to introduce new and unconventional credit models that will offer the borrower a new payment tenure and loan model. Now, to determine that, AI can play a vital role by studying the behavior of the borrower and the whole market and come up with a plan or new data to build strategies.
So, now as you know about the ways AI is transforming online lending industry, introduce this technology in your business too. For more insightful articles stay tuned with us.
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