Today’s consumers have more options available to secure credit or a loan. Short term lenders provide a ready source of convenient funds that are generally quicker to secure. The industry has its critics but, working within a framework of responsible lending, has grown rapidly. Not only do the products of short term lenders meet a market need, but through the use of technology and advanced risk analytics their means of delivery meets today’s customers’ demand for speed.
In the UK, the short term lending market has been valued at over £2 billion. In the US, it’s put at over $38 billion. A number of drivers fuel the market. They include difficulties many applicants endure in securing a loan through traditional routes. The so-named unbanked or underbanked may lack a credit history or access to the evidence required to support their application.
For time-poor consumers, readily available online lending services are an attractive option. The length of time and complexity involved in a traditional application can be off-putting, particularly if the amount is comparatively small and the sum is required quickly.
There have been calls for greater scrutiny and tighter regulation of alternative and online lending. The Consumer Financial Protection Bureau recently encouraged borrowers who have experienced problems with online lenders to submit complaints. Significant, because they use these records to influence strategy.
The protection of borrowers, lending institutions and the industry at large is paramount. Responsible lenders take this very seriously with adherence to codes of conduct set by industry associations and the meeting of professional standards.
Short term lending has grown in popularity because it meets a market need and because lenders have been successful in providing simple – and quick – application and approval processes. Online options for applications and account management complement high street accessibility and – crucially – the digital front-end presence is supported by a digital back-end that automates as much of the risk analytics and approvals work flow as possible. Automated access into all available credit reference resources not only streamlines the process in operation at the time, but also provides the flexibility to rapidly add new data sources as they come on-stream.
Innovative short term lenders use cloud-based risk analytics and decisioning to maximize efficiency, speed and flexibility. They began serving customers in the digital age and developed technology-based solutions accordingly. They’re nimble and able to adapt their systems and processes as conditions change. In recognition of its digital success, Oakam won the digital launch of the year award at the recent FStech awards. Oakam has expanded its customer service offering with an increased online presence and a loan management app which gives customers greater control over managing their loan.
We hear all the time of disruption in financial services. The pressure to stay on top of changes in the market is never-ending. Supported by technology solutions for rapid processes, short term lenders have carved out a niche for themselves.
Learn how you can speed up the short term lending process to deliver an exceptional customer experience today!