The major lending process had not been transformed for several years. However, in recent years, the development of tools has accelerated the process. Some companies still rely on paper documents while providing loans to borrowers. But, the in-person transaction is not always feasible. Financial institutions have started adopting contactless transactions. Modern consumers also prefer this approach, and thus, it has resulted in the trend of digital lending. Let us now talk about the emergence of digital lending solutions for borrowers and creditors.  

Digital lending- An evolution from first to third generations- 

In case of first-generation online lending, the focus is on loan origination. Borrowers can avail information from the digital world. Although the automated loan origination process is advantageous, it is not easy to confirm identity. Lenders need to make face-to-face interactions with customers to measure creditworthiness. 

While looking at second-generation digital lending, you can find focus on the customer experience. There is an innovation of self-service workflow and eSignature verification to manage the process. This digitization lets you schedule different post-credit events like digital closings and appraisals. The most remarkable thing is that documentation is manageable remotely. 

Now, third-generation digital lending involves a connection between different aspects of the lending process.   

How is digital lending advantageous? 

Your lending agency can embrace digital technology and implement a digital lending app for customers. 

Streamline the application process- 

In the lending process, customer information consolidation and digitization will result in a better experience for borrowers. Moreover, there will be higher transparency in the process. Customers will not feel frustrated, as the application review process will not be delayed. They can communicate with lenders in a better way. 

The overall loan application process in the digital platform also develops a centralized database. 

 Digitize the information about lending- 

Digitize the information to provide considerable benefits to your team. For instance, loan processors can gather third-party data using an interface. The process minimizes the risk of errors and reduces manual tasks. So, you can make a faster decision with this approach. 

Borrowers’ information is also accessible to lenders from one location. Thus, you can invest in a loan management app for your business.  

Digital lending data- Easy to analyse- 

Banks can digitize the analytics of the lending process. Analysts and lenders make different assessments and estimates. But, a slight discrepancy will lead to mistakes in calculations and inaccurate reports. Thus, banking sites can be integrated into a digital lending platform. As the digital system collects data, banks can use it to identify portfolio risks. 

So, it is all about digital lending platforms and their evolution. You can also implement a field executive app for NBFC to take advantage of digital solutions.