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WAYS DIGITIZATION HELPS IN FINANCE AND MONEY LENDING
Rampant use of technology and digitization has shaped the future of the fiancé market, especially the money lending sector all over the world. Whether it is China or India, US or the UK, there is an extensive use of technology in this field.
The most significant benefit of digitization is that it has helped the financial system to get more and more people to get added to it and enjoy the benefits that it has in store. Yes, money lending can help you in a lot of ways provided you know how to use the fund you receive and put it to the best of use.
Unfortunately, in the past the financial system all over the world favored a handful of the entire populace providing them with an easy access to reliable, best, regulated and safe services. However, this had an adverse effect not only in the finance and economy of the country but also corroborated the age old fact that rich get richer and the poor poorer.
Typically, it is the people who are unbanked that is the most financially active segment making transactions of millions of dollars every hour when taken together. If the financial system can reach out to these huge potential markets then it will surely make a positive impact on the countries’ economy. This is where digitization in the financial system comes into play.
BENEFITS OF DIGITIZATION
Digitization has helped the finance segment a lot in reaching out to the masses more effectively and efficiently. Apart from that it has also helped both the financial systems as well as the commons in ways more than one such as:
- The masses now do not need to depend solely on the whims and fancies of the unregulated and often unreliable private money lenders in the market for their financial needs.
- The availability of several reliable and reputed online sources such as libertylending.com has provided them with far too many options and an increased accessibility to more favorable financial products that they can now have on favorable and affordable terms.
- Making payments or any financial transaction is faster, safer and easier now with digitization. Whether you want to send money back or forth, digitization has helped the financial systems to gain trust of the people.
- As a result of this increased faith of the common populace on the modern financial systems it will also result in a significant increase in saving and investing as well. This will have a significant positive impact on the country’s economy, infrastructure and development on the whole.
- With more and more people getting accustomed to this newer ad better digital financial services and offerings, they will now be more interested in moving on to availing these financial services beyond their usual money transfers for phone airtime recharge or paying for a product purchased online.
- Now that mobile transactions are possible, thanks to the digitization of the financial services and systems, even personal loans will be disbursed using a smartphone. This means even the low income clients can have more and easier access to credit.
- A digital transaction has also enabled the financial systems and the money lenders to save the data and info furnished by the users while using their mobile devices for making a transaction. This helps them to create a larger database that they can use to get more customers.
- With these records for payments money lenders can come to know the ability of a customer to build up savings or make any investments. Regular payments to utility companies or making any e-commerce subscriptionsindicate that the prospective consumer is able to repay loans.
- Household financial security is also increased and reinforced using these advanced and better digital financial services. It will also result in more and better macroeconomic welfare.
Since digitization is mainly based on the online platform, a major part of the owners of small convenience stores that use this platform can take care of their basic cash transfers easily and more effectively. It raises the chances of these store owners to become digital loan brokers.
DEVELOPING THE MONASTERY LENDING PRACTICE
Another significant benefit of digitization is that it can influence product and service development of the country keeping the social values and the unique cultural traditions intact. In most of the countries the monastery lending practice is still extensively prevalent.
- This practice typically brings civic and religious virtues together.
- This raises the chances of it to become the guarantor in the future for those people who are new to the unsecured borrowing category.
- While commencing, all new approaches for assessment of credit is based the telecom payment history.
Now this digitization has enabled the financial system to build a better credit rating that is based on the online behavior of the consumers as well.
However, it needs proper training of the agents so that they can go ahead, promote and encourage people to make responsible borrowing as well as pay their loans back on time. This is because of few specific reasons such as:
- It is not easy to predict for sure how the digitization process will turn out to be and
- It is difficult to determine how effective it will be.
Taking clue from the past experiences of several countries such as China where the advent and penetration of smartphones has encouraged mobile payments, most countries take this as a positive sign.
WRAPPING IT UP
Mobile and digitized financial services are highly likely to grow continually and have a huge potential to take a country ahead with an improved economy. With a complete digitization it is easy for the country to make the best use of the huge potential of the next generation who are highly teachable, encouraging and keen to learn more.
With all of the innovations and new changes prove that the world is now ready to embrace and move towards the modern era of finance and money lending. Therefore, digital disruption can be a boon providing the finance and money lending industry with a host of new opportunities.