Payments Industry, Fintech, lending

How lenders can use real-time payments to meet consumer demands

By Modulr on 21 February 2020   •   3 mins read

The modern customer - both consumer and business - lives in a world of instant gratification. When they buy a product or a service, they expect it to work and deliver instantly. This expectation also extends to customers looking for a loan. When a lack of cash flow is creating challenges, these customers want access to funds as soon as possible. 

In the past, this was a difficult expectation to meet, as the customer’s credit history needed reviewing and loans were mostly only available from traditional banks during open hours. This was inconvenient for the customer and limited their choice of lending provider. 

Fortunately, the modern lending market is a whole different world, focused specifically on solving customer problems and delivering the very best lending experience possible. 

There are now significantly more lending providers, loan terms and services available than ever before and so the modern customer is much more selective in their choice of financial support. This again reiterates the importance of being able to deliver on their expectations efficiently and profitably. 

Meeting the need for speed

To meet the customer demand for immediacy, lenders are embracing real-time payments to disburse loans as soon as they are approved. With the approval process taking less time than ever, many customers are receiving their loans within less than an hour of the initial request.

To offer and take full advantage of real-time payments, lenders are integrating the latest digital technology with their lending platforms, allowing for quick and automated approval, disbursement and repayment. 

Moving away from inefficient manual disbursement processes to real-time API-driven loan disbursement is empowering lenders to serve customers quickly, while reducing the risk of manual errors.

This improvement in efficiency, combined with a radically faster disbursement time and an overall better service is helping to deliver a first-class lending experience in an increasingly competitive market. 

Driving profitability with real-time payments 

By delivering a superior financial service and proposition to their customers, lenders are able to charge a premium interest rate and maximise their profitability. 

As Kyle Macdonald, Chief Executive Officer at Financial Cloud, states in our latest research:

‘People will go for convenience over cost. Lenders who are able to do instant pay-outs will be able to charge higher interest rates as a result. People are willing to pay a premium for a slick user experience and customer journey.’ 

By giving customers access to cash flow quickly, lenders are able to enhance the value they deliver, while reducing costs through automation. This all creates fantastic opportunities to service a greater number of customers and drive growth.  

The modern lending economy is set to grow increasingly competitive over the next five years as lenders big and small alike adopt new technologies to deliver a higher quality customer experience. 

As lenders look to reduce their operating costs while improving efficiency and offering a more diverse range of lending services, adopting real-time automated payments, automating loan approval, disbursement and repayment, will all become the standard. 

This will ensure lenders have the critical capabilities to meet customer expectations around speed of payment and convenience,  an essential competitive advantage for those with aspirations of success in the future.

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