Lending-led players dominate fintech in the future: Ottu Report

Lending-led players dominate fintech in the future: Ottu Report

As the future of Fintech can be seen in a new light it has now found its place in the innovation front - previously financial technology was only a part of the backend system for bankers and traders. Today, the power that fintech holds in its process has been unimaginable. Over the last decade, the investment in Fintech has increased in leaps and bounds, finding its lost place in the innovation economy. Fintech has seen such tremendous growth in the last years that is has become a reality. Financial technologies like payment software's (Ottu), chatbots, blockchain and other digitalization has become the hype of the online? financial systems.

A new age of technology, where taking loans and lending have become an easier process than they had ever been before. Why has the efficiency increased? The answer lies in the innovative creations through FinTech. The mortgage industries have and will eventually benefit from this new technological change in lending. As you can understand that payment is only a small part of the whole process, the loans and their approvals become in scale - far superior and defines the sustainability of a business.

With personalized loans according to the specific needs has made vast changes from the one-size-fits-all scenario that lending featured in the past. Let’s look at how FinTech has changed the way a person’s financial freedom grows.

Future of Fintech

Fintech has become one of the big buzz words in business and technology, it is one of the hottest properties to invest in. You can be sure that Fintech is only going to get bigger and bigger. Whether you are in the dark or you have knowledge about Fintech - we’d shed a bit more light. It has automated the banks to an extensive degree, before bank used to have control over all the processes involving money. FinTech has been a huge blow towards incentivising and innovating newer functionalities for its clientele.

As FinTech grows, they are giving the banks a run for their money. Taking up most of the process that banks might take longer to ascertain - platforms like Ottu have bridged this gap and created a digital presence for all the financial process.?

What is Fintech Lending??

Fintech lenders employ the latest financial technologies to streamline the traditionally out-of-date and non-transparent lending process. Using it, lenders can expedite payment processing and simplify their policies, giving them immense power. Additionally, its leaders are able to provide tailored loan and mortgage experiences based on the needs of each merchant. FinTech surpasses the lending experience and has been greatly beneficial for the new lending industry scenario. Previously, consumers could not apply for a loan anywhere and at any time, but fintech lending allows them to do so. As a result of fintech lending, consumers are able to take charge of their finances through the use of advanced technology.

Reports state that, FinTech findings have jumped through 157 per cent each year, as of January 2022 - $ 1.77 Billions has been invested in FinTech. As we witness a small drop in the funding of FinTech's, the valuation is expected to shift from payments to lending-led fintech's that will maximize wallet share ahead. The Global consultancy BCG states that most of the funding went to payments at USD 2.7 billion and then closely followed by lending at USD 2.6 billion, according to the report.

Due to low margins, the lending sector will lose market share, and the valuations of lending-led fintech's will jump nearly three times to 35 per cent by 2025. The success of digital payments have come a long way and the last financial year recorded the gross value of over Rs. 320 lakh crore for the payment sector. Now going forward, this will change and payment process will be taken over by the lending process. Lending will also become more valuable because of the democratization of data and the valuation profile of fintech's.

Embedded finance is also expected to drive digital payments and credit penetration in the country as the buy-now-pay-later market grows by leaps and bounds - a whopping Rs. 7 lakh crore by 2026.?

Benefits that arise from using digital channels for loans -

Online bank accounts, e-commerce accounts, and mobile wallets are among the digital channels lenders use to disburse loans and collect repayments. Transparency in user history makes these channels more efficient and decreases lending fraud. In addition, they enable fast, nearly instant payouts, giving borrowers immediate access to their money. In order to ensure timely repayment, borrowers often use auto-debit options for repayments.

The ability of the lenders has also widened as they are able to access and use digital data to make more accurate, faster and automated decisions in the digital lending process. Allowing quick evaluations and proficient in making remote credit decisions. Decisions can now be made in a second thereby reducing the turnaround time and also enhancing the customer satisfaction.

Final thoughts

As Innovation Expert and FinTech VC - Arvind Sankharan states that, “We are witnessing the creative destruction of financial services, rearranging itself around the consumer. Who does this in the most relevant, exciting way using data and digital, wins.”

We understand how FinTech will be taking over all the financial processes in the coming future, as it bundles the different financial services that banks have traditionally done uptil now. A growing number of fintech companies are providing alternative financing solutions to replace traditional financial institutions in the loan market. With the help of novel technology, they are revolutionizing the lending process and transforming the conventional landscape. Make sure you don't miss out on the next digital era of lending.