Peer-to-peer lending took the entire industry by storm after the recession of 2008, mainly because of the fact traditional lenders need to deal with various regulations that would not apply with peer-to-peer. The recession meant that it was hard for people to get a loan. Getting loans bad credit no guarantor was an opportunity but that is not what most wanted. This had to change and thankfully, technology is in to lend a very big helping hand for the entire industry.
As an example, Wells Fargo recently launched the FastFlex loan. Amounts offered go as high as $35,000, with funds being available in the bank accounts of clients in just 1 day, combined with weekly repayment schedule. Interest rates vary between 14% and 23% and are designed for small businesses requiring fast funding.
Other banks are joining the initiative and speed up the loan process. JP Morgan is an example of that, partnering with OnDeck Capital. The partnership combines the digital platform of OnDeck with the lending experience of Chase. Small loans are given to small businesses right now, with funding becoming available in under 24 hours. Traditional lenders basically manage to work with technology companies in order to speed up the entire process.
Technology is also becoming more popular in mortgages, improving the entire loan process. Nowadays, home loan closing is time consuming and is much more costly and difficult than it used to be. Lenders are squeezed on margins and have to deal with highly increasing regulations.
Frustrations and costs directly affect consumers, normally crushing homeownership excitement. Tech companies are now involved and try to add a digital element to the entire process. The mortgage lenders used to have to deal with old systems and processes that relied on a manual approach. Web based loan options are adopted with the purpose of streamlining everything. There are also cloud based businesses that are basically loan centers accessible at any point of night or day. They make it really easy for people to check loan status, electronically sign documents, maintain record systems and upload required documentation.
What is important is to understand that both banks and lenders are adopting brand new technologies right now in order to improve loan offering. It will only be a matter of time before the automated bots will come into play. Bank Of America, as an example, launched a special bot through the Facebook Messenger app. It offers real-time alerts coming from the bank as the company does improve functionality every single year.
One bank is enough to make innovations and set standards before the others quickly follow suit with the purpose of staying competitive. Banks will surely launch such chatbots in the near future because these are the bots that will help streamline the entire lending process. A good chatbot is now able to answer most of the questions borrowers have as they look for a loan. Banks automatically manage to free up time for the loan officer for areas where expertise is actually required.