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Competition is growing fast in both the consumer and business lending markets. There are more companies than ever now offering a wider range of lending services to customers looking for additional cash flow.
With the introduction of the Second Payments Services Directive (PSD2), banking data is no longer trapped behind an impenetrable wall, and this has driven transformation throughout the financial sector.
Ushering in a new age of Open Banking, FinTech companies are now rivalling traditional financial institutions by offering alternative finance solutions.
This has made the sector much more competitive and forced market leaders into action to enhance and evolve their lending propositions. These improvements have mostly focused on revolutionising the lending experience and increasing the convenience of lending wherever possible.
Before legislation unlocked the opportunities presented by Open Banking, the traditional customer experience in lending was rigid. There was little variation between providers as the majority operated in the same way, evaluating each customer’s financial position using the traditional credit score to determine their eligibility and rates.
Now, companies use their customer’s bank account data to get a much more accurate financial picture in a much shorter space of time. This means they can offer loans faster which more effectively reflect the individual’s affordability circumstances.