If you missed the CFA’s Fintech Innovation Forum in New York here are some key takeaways discussed by the panelists on innovations that will shape the industry in the next 3 to 5 years.
• New Underwriting Technology to improve funding decisions. Lenders recognize that underwriting needs major improvement. Virtually every panelist and lender we spoke to said underwriting efficiency is a big problem and is looking for ways to improve. Many traditional lenders are still using mostly manual methods, spreadsheets and the like to analyze deals, which slow them down and don’t help in responding to business owners quickly. New underwriting technology is making waves and can cut underwriting time by as much as 80%!!
• Digital Methods to elevate the Customer Experience. The customer experience is dominating minds. Many lenders stated that that they have to go beyond business as usual in order to better compete. Making the application and onboarding process smoother and faster for borrowers makes a big difference. Adaptive lending technology will make inroads in elevating the borrower experience.
• Artificial Intelligence to make waves. Both traditional and Fintech lenders are looking at ways to incorporate AI into the lending process. It’s already making headway in biometrics, reducing the potential for fraud right from the start of the application process. Over the next few years, AI will be assisting lenders in many exciting ways.
• Technology Partnerships on the rise. Traditional lenders are recognizing that they will need to partner with SaaS technology providers more and more rather than try to build their own, saving time and money, and allowing them to focus on their core business.
• Fintech no longer seen as big threat. Traditional lenders are seeing that there is an opportunity to use the same technology Fintechs use to their advantage to substantially reduce manual methods, improve loan decision and response time, and provide a superior experience for borrowers.
Innovative technology will transform the industry over the next 3-5 years and traditional lenders that improve underwriting methods and focus on elevating the borrower experience will dominate.