PAYMENT SOLUTIONS
and disruption too , needing access to capital so they could keep their doors open .”
With so many businesses applying for Coronavirus Business Interruption Loans ( CBILs ), traditional lenders couldn ’ t keep up . Alternative lenders stepped up to meet demand and turned the industry on its head , points out Johnson . “ By offering businesses smart loans based on real-time data and seamless online experiences , credit provided by alternative lenders has skyrocketed , kickstarting the lending revolution ,” he says .
On the consumer side , the uncertainty of COVID-19 drew customers to digitalfirst credit options . BNPL firms like Klarna have boomed , offering instant credit for purchases at the point of sale . Responsible credit card providers like Tymit offer flexible lending options , letting customers choose which purchases carry interest and select their own instalment-based payment plans .
“ By doing away with revolving balances and minimum payments , online lending providers are giving consumers better transparency over what they owe , which is vital in these uncertain times ,” says Johnson . However , the growing popularity of online lenders is also forcing incumbents to address the shortfall in their services . A
recent study found that , as banks ramp up their innovation plans , 91 % say they need to improve their use of data analytics to gain insights into customers that will allow them to make lending decisions in real-time .
Furthermore , says Johnson , 90 % of banks believe they need to implement technology and processes that enable them to control what loans are spent on . With greater visibility and control , lenders can offer personalised lending options that will meet customer expectations , assess loan applications accurately , and
reduce delinquency rates through bespoke spending restrictions .
He adds that in order to keep up with the swiftly evolving space , incumbents must embrace new technology and innovations fast . “ To succeed , banks need to be supported with modern core banking and payment platforms , using an API-driven approach to help them develop and launch new digital products and services at pace . Time is of the essence , as those who can move quickly and double down on digital may be well placed to take advantage in a confusing , complex market .”
Financial well-being Helander takes a different approach . She believes more than ever that incumbent banks must set the tone and focus on their customers ’ financial well-being . To put
78 June 2021