Open Finance Solution to Solve Fintech Lending’s Core Problems
Digital lending platform brings benefits for lenders in gaining capital access easier. The digital lending scene is separated into two major players, banks and fintechs. Market demands encouraged fintech lending to keep improving their products by becoming the alternative from the conventional bank lending scheme.
Digital lending may have flourished, but this practice still has its core problems that need to be addressed. Acquisition, loan underwriting, and money management are the building block of creating remarkable digital lending products. Oftentimes, lack of extensive data hinder fintechs to provide immersive services for their customers.
These obstacles can be overcome with the rise of open finance, an extension of open banking which levels the playing field in the financial industry. It allows all entities to participate in the ecosystem offering products and services. Greater scale of data will benefit digital lending platforms to better decision making and build the right product.
For example, in regards to users acquisition, open finance ability to connect users data to third-party platforms allow the automation of KYC to be performed, increasing conversions for lending platforms.
Read more about the solution on this e-book by Brick.
