Loan companies are fighting for a reliable customer
Interest in quick loans is growing all the time. We like to use online financial products and – as research indicates – already every third Pole willingly signs a contract with the lender and obtains the necessary support. Loan companies have to go out to clients with an increasingly better offer, and constantly convince them that they offer much better loans online than competing institutions. This applies to both the available amounts, the possible loan period and the speed of decision making. However, before the lender decides whether to grant additional funds, he is required to carefully verify clients. Only by accepting applications submitted by financially reliable persons can companies protect themselves against non-payment. How to check the creditworthiness of potential borrowers? For example, using new scoring methods. The more so because a loan, e.g. payday loan without BIK, is most often used by young people who are equally eager to use modern technologies.
How to meet the needs of young borrowers?
Who are the borrowers? As we have already mentioned, most often they are young people – as research shows carried out by Nakasa, every sixth client of non-banking institutions is in the age group 18-24. The next 24 percent the borrowers are persons aged 25-34. Young borrowers are more aware of their needs and expectations. They know technological innovations, which is why non-bank institutions eagerly implement modern solutions – thanks to this, the process of applying for additional funds runs smoothly. In addition, companies derive knowledge about customers from sources other than before. Not everyone can boast of a positive credit history, which is why a large part of applications is rejected (in Europe, only 13% of loan applications submitted are verified). Loan companies have decided to gather the necessary information in a wider way to increase the percentage of accepted applications. How can they do that?
Modern scoring tools
The development of the FinTech sector has meant that non-bank institutions can use modern tools to verify customers. We know very well how common among young people (and therefore key non-banking customers) are social media. You are not on the Internet, you do not exist – it is a commonly known truth. Social networks are not only used to share messages and photos. For our potential employer, social media can also be a control tool. Also, loan companies have decided to use social networking sites to obtain the necessary information about the clients submitting their applications. They analyze not only Facebook, but also our online behavior. The condition is our consent. However, do not commit one of the borrower’s basic sins and before we agree to the terms of the lender, carefully check it.
How do modern credit scoring tools work?
Modern tools for credit scoring allow you to easily verify the necessary data about customers who require a payday loan application. Lending companies, by analyzing borrowers’ profiles in social media, carefully look at their decisions, their behavior, events in which they intend to participate and the opinions they make. They build the borrower’s profile, taking into account its strengths and weaknesses. Then they draw conclusions and decide whether they should grant additional funds or not. The whole process literally takes a moment, and it allows you to offer your customer a personalized financial product.
Do modern credit scoring tools bring results?
As it turns out, modern credit scoring tools are delivering the intended results. Loan companies can easily and quickly get the data they need to give an opinion here and now – without checking the customer databases and calculating the score. The loan granting process has accelerated even more and time is one of the most valuable values for us today. We are constantly chasing forward – we do not want to, and many times we can not wait, especially when it comes to money. The number of successful applications also doubled. The collected information allows us to determine whether we will be able to return the loan – if so, the non-banking institution has no reason not to grant it to us. Lenders can propose personalized financial products and the amount of the loan that will meet the needs and expectations of the individual client.
Traditional ways to verify customers
Modern methods do not cross traditional customer verification methods. Loan companies are just learning to use the new tools, and not all clients agree. Most loans are taken by young people, but older people also apply for financial support. They definitely prefer traditional solutions, they also value access to home loans. Direct contact and delivery of money to their own hands is very important to them. Same as traditional verification methods, based on checking the debt register and calculating the score. Loan companies must adapt to the needs of recipients, depending on their age and expectations. As customers, we must rationally use the available offers, guided by the indications of payday loans and installment loan rankings. Thanks to the hints of experts, the loan will bring us the expected financial benefits.