Top trends driving financial innovation in non-bank lending
The non-bank lending industry is growing and changing rapidly, driven by financial technology.
However, we’re agile and do have the ability to adapt and innovate quickly, especially compared to the more traditional financial institutions.
Some key trends we are seeing influencing the sector include:
A shift in customer expectation of easy, accessible and fast access to money, which has largely propelled new services such as Buy Now Pay Later (BNPL) products.
The convergence of technology and data, influencing the rise of open banking, new payment technologies and legislation for Comprehensive Credit Reporting (CCR), which has already and will continue to change the way we review credit scores.
Implementation of automation technology and Artificial Intelligence (AI), replacing or reducing human interaction with prediction tools like chatbots and credit risk assessment systems.
These trends have increased innovation and competition in the industry; forcing lenders to adjust and adapt, however, for us, it is the change driven by the customer, which truly adds value for improved customer experience, service and efficiencies.
On the back of these influences, Fair Go Finance has shifted our focus and priorities, putting the customer experience first and are investing in new CX technology (Customer Experience) and internal capabilities to improve the overall customer journey.
We’ve been able to employ staff with specific skills in CX/UI, data analytics and frontend online development, enabling us to improve on our first touchpoint with customers, with chatbot AI and Straight Through Processing (STP), improving response times.
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The chatbot has helped remove blockers and complications in the customer application process, assisting over 150% more customers with their enquiries and we’ve seen our response time for customers requesting further assistance improve by 70%.
Growing data sources and assets are critical to be able to better understand who customers are and what they want when accessing credit. Technology has created opportunities for automation in areas like credit risk assessment – meaning faster decisions for customers during their credit applications.
The introduction of Comprehensive Credit Reporting (CCR), providing customer account status and repayment history information (RHI), creates a complete picture of credit history and current creditworthiness.
As the only small lender adopting CCR, this – along with our customer service – ensures good paying customers are being rewarded with a significant increase (e.g. a 25% boost) in their credit score from repaying a loan with us. For someone looking to buy a car or house in the next 12-18 months the benefit of this is massive.
What is most important to us is how these technological innovations are adding benefits to help our customers go forward in a positive way. Quicker processing and outcomes, more accurate predictions to reduce bad debt, risk-based pricing, and sharing of repayment history with credit bureaus, are all tangible ways we are helping customers boosting borrowing power and improving credit scores.
In 2020 we’ve already seen some unprecedented environmental factors impacting the global economy. Now more than ever, it is time to fuel more technological innovation to give people a “fair go”.
By Paul Walshe, CEO, Fair Go Finance
