There is no better way to understand the transformation of financial services (FS) than to look at how #lending has - and is still being – redefined.
Juxtapose a traditional mortgage or small business lending flow used to take weeks to decide and months to disburse vs the almost instant time-to-cash via an online platform and you have the epitome of the disruption that lending has gone through. This is where #surebanqa, one of the light years ahead disruptive financial inclusion ecosystem comes in with omnichannel platform like #qikqik+.
The main elements are:
— A complete transformation of the end-to-end customer journey (from paper to digital and from an all-in to no human interaction).
— From a stand-alone, vertical set-up handled exclusively by banks, lending nowadays finds itself at the convergence between platform models and cross-industry verticals managed by a plethora of players that can simultaneously act as both competitors and partners.
— The addition of an entire level onto the front-end bringing non-traditional players into the game via what we call embedded omnichannel #finance: the art of adding FS flows in non-FS customer journeys: QikQik.
— Lending is about risk management and risk management is about #data.
Most of the innovation that has changed lending from the ground up evolves around the (right) handling of data:
1) Real-time, big data analytics
2) Algorithmic trading
3) Customer segmentation
4) Predictive analytics for fraud detection and lately
5) GenAI as a decision-making engine.
At the same time:
a) access to data has been democratized via open banking
b) rich, actionable data has replaced passive data
c) alternative data has redefined credit models.
— The drive for hyper-personalized experiences via social commerce and the influence of algorithms and #ai.
— The re-packaging of existing financing flows into new business models via the help of technology. BNPL(Buy Now, Pay Later) is a primary example.
My highlights include 2 conclusions to draw and 2 opportunities to consider.
Conclusions:
1. As more roles are concentrated under less layers, the dividing lines among lending, payments, e-commerce, social commerce #fintech and banking are becoming less clear.
2. Lending remains at the epicenter of FS even for new players challenging the status quo. It is not by accident that the pivot of challenger banks to a mature 2.0. play goes through lending.
Opportunities:
1. Despite the digitization of the financing value chain, most new processes have been built around existing set-ups replicating models of a value chain that has dramatically changed. There is a significant opportunity in creating digital-native structures that can match new business models.
2. SME lending remains still one of the biggest, untapped opportunities in FS. Various approaches (from revenue-based financing to invoice discounting and to B2B PayLater) from different sides of the market (supply, operations, sales) are facing the same challenge: how to balance the inherent SME complexity with a higher degree of customization.
3. Fractional Real Estates Ownership (FREO) is becoming the best way to access property, thanks to RWAT( Real World Asset Token), people can own a piece or portion of home, with a possibility to sell, transfer it at anytime anywhere.
Source: Panagiotis Kriaris’ LinkedIn Post, my own opinions, Graphic sources: Brankas, Experfy