Coined in the wake of the booming cryptocurrency sector, decentralized consumer lending has become effective because it is built on the blockchain technology.
Ever since the world witnessed the rise of cryptocurrencies, the term “decentralize” seems to be all-pervasive. Decentralization is being adopted by many industries to make transactions safer, simpler, and heightened transparency. One industry that has shown great potential regarding the application of decentralization is the consumer lending industry.
Now, many of you might have started to question the existence of banks in the future. You might also think if at all we need a centralized body to approve our loans. As it turns out, maybe we don’t.
Coined in the wake of the booming cryptocurrency sector, decentralized consumer lending has become effective because it is built on the blockchain technology. Decentralized lending platforms offer loans in much the same way as regular banks. But, the absence of intermediaries in distributed lending makes all the difference and casts aside the traditional form of lending. Blockchain technology here is a real game-changer as it makes it possible to transfer asset ownership from one person to another in a secure way. The trust here is not established by a financial institution or governments but by smart contracts, collaboration, consensus protocols, and cryptography.
Built on a private blockchain network, Skeps is a decentralized loan marketplace where lenders can collaborate with its partner network to fund more loans. In this blog, we are going to help you with the four distinctive features of Skeps that makes it a compelling product for every lender.
Currently, it takes weeks for lenders to scrutinize, process, and approve a loan, due to which only a handful of applications are approved and loan disbursement is meager. Because the process is long-winded, the lenders need to bear huge operational costs. With Skeps’ blockchain-based product, lenders have access to a large pool of credit-qualified applications, which makes way for higher approval rates, faster processing, and augmented loan disbursements.
Findings* show that 47 percent of consumers like an instant financing option, while 40 percent would spend more money on a purchase if they had the option of instant financing. Having pre-approved financing options available enhances the customer experience as it allows them to access the things they need when they don’t have immediately available funds. Skeps’ product helps consumer lenders provide their underwriting model to an extensive network of merchants, thereby offering greater purchasing power to their customers and reducing drop-offs.
An American financial services firm is attacked a billion** times per year to make a leakage in the data. In such a concerning scenario, what every lender strives for is, data security. With Skeps, you can be certain of data privacy! When lenders partner with Skeps, their customer data, and the underwriting model remains within their firewalls and they get to choose partners on the network. Since lenders have full control over the platform/dashboard, they can easily customize their underwriting model on a real-time basis and rest assured it is secure and private.
Since intermediaries are not involved and paperwork is eliminated with Skeps’ product, the acquisition & operating costs go drastically down, augmenting efficiency. On top of this, because lenders get credit-qualified customers, the take rates tend to be higher and they pay only against successful funding. Also, there is a possibility of lenders selling their rejected applications, thereby generating revenue and offsetting the customer acquisition cost.
With blockchain technology transforming the lending industry, Skeps becomes indispensable. Lenders can quickly start disbursing funds and grow their business without having to deal with the hassle of maintaining and investing much in customer experience & acquisition, and data privacy. Read “Hi! We are Skeps”, to know more. In case you want a demo, request today!