The Future of Payday Lending

The Future of Payday Lending and Its Main Tech Trends

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The future of fintech is expected to revolutionize payday lending. Companies will enhance their products, reduce their operational cost, and work faster and better. Due to AI technologies, reporting agencies will collect and share information at least three times more quickly. Within the next several years, this information will be available to consumers instantly. Faster service will allow payday lenders to shorten turnaround times and provide instant loans.

Underwriting technology is expected to become more efficient because artificial intelligence algorithms that detect connections between different data sets for underwriting purposes will automate credit risk analysis. For example, instead of deciding based on just one credit score and recent payment history, lenders armed with new software can mine much larger quantities of data to make decisions about how likely borrowers are to repay their loans. Combined with other technologies such as advanced machine learning, algorithms, and virtual reality tools, able to show potential borrowers what their future financial lives would look like in different scenarios.

The main directions for development include, but are not restricted to:

  • Monitoring loans. Robots are expected to monitor a borrower’s finances and warn the lender in case new risks arise. The solution is thought to decrease the number of unpaid loans and diminish the risk of lending.
  • Blockchain will be part of the financial world.
  • More availability. Small-dollar loans will become more available for potential borrowers.
  • Real-time payments. We are looking at payments that hit a borrower’s account in a few seconds instead of one business day.
  • Digital wallets are expected to revolutionize the lending industry.
  • Lending marketplaces are to become more global.
  • AI will be an active part of financial services, significantly improving the consumer experience.
  • More apps will allow making payments in a few seconds.

Payday lending is evolving at a rapid pace. The future has many upgrades in store, which is why companies have already started to invest in technology, prioritizing security issues. Veridian Credit Union is testing full verification done by artificial intelligence. You can apply online to a wide range of loans and manage your account via a personal computer, laptop, or smartphone. Learn more about us and how we can help your business fight financial crime.