The microfinance market has become one of the leading places to develop some modern technologies. Since the demand for loans is intensely growing, artificial intelligence helps many microfinance companies reach their customers even more than banks. That is why fintech innovations are widely used in such organizations.
Interestingly, the moderate loan portion in Europe is nearly eight times more down than in the United States and Asia. Despite moderately increased development rates, the European microfinance market has space to expand. The availability of loans for locals and small enterprises leans rather laboriously on the financial understanding of the people. Usually, a possible lender is not aware of his abilities, which completely excludes their performance.
Microfinance organizations are an essential connection in the process of raising the economic accessibility of benefits for individuals and legal entities. With the expansion of Internet technologies, the outcomes of micro-financial establishments have come closer. The main movement now is the development of online loans. Recently, microfinance institutions have redirected their principle from extending their component networks to enhancing lender inspection technology and their own IT architecture. Virtually, all large retail microfinance organizations in Europe have made considerable investments in software. The introduction of the latest technologies in the field of company processes and risk control permits institutions to decrease the duration expended on application processing, loan processing, and technical support.
Banks and lending companies are going online
The competition in the online part is increased for numerous banks and lending companies – the period needed to examine an application and define the results of loan application processing is essential. The faster, the better.
Many people want to do their research and find the best fitting lending company before applying for a loan. That’s why a lot of platforms where anyone can compare the lending companies and their services started appearing on the market. There people are able to find the best suitable option. smslansnabb.se is one of the websites allowing people to compare lending companies and look for an organization that can provide their requested loans. Comparing many lending companies, such as Klara lan, or Thorn, people can see all of the details and specifications for each company and choose the one they prefer the most.
Since there is a great chance for the lending market to go even higher in the upcoming years, microfinance organizations started to support powerful economic and human resources in the development of automatic borrower risk inspection systems. Typically, when creating and executing consumer credit rating strategies, market parties employ logistic deterioration, but at the same time, there are thriving chances of executing credit networks. This risk estimation method is presently the most developed. Microfinance institutions were the first in the financial sector to take full benefit of it.
A separate area of use of artificial intelligence in the fight against fraud and money laundering, as well as the financing of terrorism. These techniques can quickly investigate new strategies of deception, questionable trades, and other indicators, minimizing the human factor.
The European market already holds thriving procedures for assessing small and medium firms using Big Data. This approach is more formed when operating with individuals. In the decision-making system, microfinance providers try to incorporate at least 3 to 4 separate databases. An added source of data about the borrower, particularly in the online sphere, details a person’s behavior when filling out a questionnaire and the user’s action on the Internet, which, as a rule, normally, is investigated by the profile of the borrower in social channels, the records of visits to the website, and etc.
Final thoughts
Recently, most microfinance institutions have assimilated into fintech companies. Indeed, the majority of advanced technologies, including those evaluated by borrowers, are the first to be introduced by players in the microfinance market. Traditional banking organizations have switched to new technologies for too long in an attempt to retain their customers. Recently, however, the convenience factor of services, especially remotely, has played a significant role in the choice of financial services. In the financial market, customers are increasingly demanding and lenders must keep pace. That is why the micro financial market is highly predicted to become one of the leading markets in the forthcoming years.