Fintech has become a huge threat to traditional banking it is posing a great threat to traditional banking in countless platforms, such as the lending platform, deposit platform, transfers, etc. A major challenge recently faced by small and medium enterprises is capital, this has led numerous enterprises to request loans in banks.
Most banks engage in a loan with their trusted customers. Recently a survey has shown that the traditional banking system is facing a great threat as fintech has taken over the system. Lending is now made easy… customers can easily access cash within 30 minutes of request unlike traditional banking that takes ‘days’ to process.
The ease in accessing loans from banks enabled customers to expand their business fast. fintech has enabled loan requests without collateral or prerequisites, which normally are demands of conventional banks.
Startups are jostling for their place in the market, backed by new technologies known as fintech (financial technology) companies that provide alternative solutions and business models to systems traditional banking are operating on.
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This new trend that is gaining strong attention in the lending sub-sector of the financial industry is also known as peer-to-peer lending (P2P). It allows people to access loans of all sizes efficiently and expeditiously via digital lending technology without recourse to bank processes.
Online loans are essentially approved and disbursed through digital platforms such as phones, mobile apps, websites and so on. It takes away bottlenecks associated with going to the bank to apply for a loan that is not guaranteed as well as reduces the time between application and disbursement.
In Nigeria today, about half a dozen digital lending platforms are jostling for market share to create essential services beyond what traditional banks can provide. Paylater, Opay, Fair Money, Kiakia, Pay Connect, and Kudi Money are major platforms providing digital loans for people.
For banks to move away from their traditional ways of giving loans to their customers, they must admit that technology is the major force needed to drive digital lending platforms to deliver simple, easy and convenient services for prospective customers and clients.
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