Lending, like all other areas of financial services, is being disrupted by digital transformation, emerging competition, and rising customer expectations. Traditional financial institutions run the risk of losing to the competition, if they don’t catch up with the digital age.
But archaic paper-based processes, legacy underwriting systems, and questionable customer experience management practices mean that traditional lenders lag behind in terms of onboarding new customers. Moreover, they are reluctant to lend to small businesses and consumers with limited credit history.
By contrast, new-age lenders, fintech companies, and alternate financial institutions offer seamless customer experience along with impressive speed and convenience in their lending journey. Traditional lending institutions also have to deal with challenging macroeconomic conditions, complex regulatory norms, and, most importantly, the impatient and demanding customers of the digital world.