New Loan Scenarios: The synergy between financial institutions and fintech is the key to meeting customer needs

In recent decades, digitalization has radically transformed the world of loans—and beyond. The processes of applying for and granting credit for both operators and end users have progressively become faster, more immediate, and easily accessible from any device and location.

"Technology has enabled a series of innovations that have radically transformed the entire financial sector. From mobile banking to cloud adoption, through the application of artificial intelligence and the rise of cryptocurrencies and investment apps," comments Valentina Cianci, Head of Sales Marketing & Business Development at OCS. "In this scenario, the way users perceive and utilize financial services has also changed, with the rise of disintermediation, the gradual abandonment of branches, and the demand for personalized products. Just as new fintech models have made money management simpler, faster, and more convenient, the synergy between the lendtech segment and traditional operators has profoundly changed the concept of consumer credit."

The main advantages of digital lending

From these ongoing transformations arise some additional complexities, such as the need for financial operators to comply with new and more stringent regulatory requirements aimed at ensuring maximum security and data protection. However, the benefits of digitalization are undoubtedly more numerous. Let’s take a look at a few:

• Quick and immediate user experience: Traditional loans often require long approval times, whereas digital platforms, thanks to process automation, significantly speed up the application, evaluation, and disbursement times. Speed combined with ease of use and immediacy results in a much-improved experience: the applicant can open the application and check its status anytime and anywhere.
• Process optimization and dematerialization: Thanks to automation, credit institutions achieve significant savings by being able to process a larger number of loans in the same time frame. Disintermediation, by eliminating the need for physical branches, further helps reduce costs. Consequently, both traditional and non-traditional financial operators can offer better interest rates and lower fees. Moreover, dematerialization and the abandonment of paper, besides bringing further savings, allow credit institutions to meet the expectations of environmentally conscious customers.
• Greater inclusivity: Technological innovation expands the services offered by banks by enabling the introduction of solutions suitable even for customer segments historically excluded from the traditional credit system. One example is nanolending or microcredit, which can become a true financial inclusion tool. Broadening the scope, we can also mention Buy-Now-Pay-Later and e-commerce financing, integrated finance tools that allow access to credit directly from the platform where a purchase is being made without needing to open additional channels.

Future predictions and the impact of artificial intelligence

Although lendtech is already a reality, the digital loan revolution is still in its early stages: the digital loan market is estimated at $45.332 billion in 2024 but is expected to reach $79.534 billion by 2029 with a CAGR of 11.90%.

Looking to the future, artificial intelligence is poised to play an increasingly prominent role in redefining the banking ecosystem. When applied correctly, AI will simplify daily operations and improve service quality: from personalizing interactions to real-time risk management, AI (both generative and non-generative) promises to enable new and interesting business models.

In the consumer credit market, one of the main impacts of Artificial Intelligence is in the area of credit scoring. AI algorithms allow for a more precise assessment of an individual’s creditworthiness by analyzing a vast range of data from different sources, such as utility bill payments, shopping habits, and even social media activity. This approach enables more accurate and fair decisions, particularly for individuals who, despite having a limited credit history, prove to be financially reliable.

The role of fintech in enabling this transformation

In recent years, the consumer credit market has seen the entry of increasingly specialized fintech players focusing on lendtech. Initially, this apparent competition was a cause of concern for traditional banks, but as the sector has matured, awareness has grown that synergy with fintech can be a valuable ally in better meeting the new needs of consumers, who are increasingly leaning towards immediacy and disintermediation.

In this scenario, OCS's business model stands out as unique: since 1984, the company has been supporting its clients in their digital transformation by providing comprehensive know-how and enabling new technological tools that meet the evolving needs of the market.

“Innovation should not be seen as an end in itself but as one of the means available to better serve an increasingly mobile market and capture new clusters of digital native consumers. To fully embrace the benefits of digitalization, traditional operators need proactive support. Among the many tools available, it is crucial to focus on what can bring real added value: the synergy with technology providers, to be effective, must not only offer tools and solutions but also new methods to anticipate trends and emerging needs in the sector,” comments Valentina Cianci, Head of Sales Marketing & Business Development at OCS.