Fintech has been advancing rapidly over the past few years to meet the growing needs of the online consumer base. Fintech hasn’t only made things easier for consumers, though. Fintech backend platforms have been developed to provide a higher level of efficiency, automation, and compliance for lenders.
To help lenders better understand the potential of fintech and banking working in unison, we will cover some of the benefits that fintech can provide for lenders. There are many different functions that can be covered by software platforms, even those that seem consumer-focused.
These include:
Let’s discuss how fintech and banking can work together to achieve goals like these and what that means for the lenders that choose to take advantage of the cutting-edge financial technology landscape.
While consumer financing is obviously geared toward consumers, the ability to offer more convenient financing options to clients means better revenues and higher customer acquisition rates for lenders. It also reduces the cost of acquiring new customers, as POS financing serves as a lead magnet that actually increases profitability.
This means that fintech provides the unique ability for lenders to acquire new customers without actually spending money on marketing. Instead, they are making money and new business relationships with one high-quality service that fintech and banking can provide.
Fintech can handle more than just consumer finance products. There are also software solutions that can perform the following helpful functions:
All of this benefits the speed and cost-effectiveness of a lender’s backend and gives them a better idea of where they could improve. While the term “fintech” is typically used in the context of consumer products, these backend operational platforms also fall under its umbrella, and fintech firms that offer one usually offer at least a few of the key benefits of the other.
Regulatory technology also falls under the fintech umbrella, and it includes several different functions that help lenders keep up with rapidly changing regulations. Banking is one of the country’s most regulated industries, especially after the 2008 financial crisis. The recent consumer financing boom, along with abnormal lending patterns in the real estate and automotive finance industries throughout the COVID-19 pandemic, will likely lead to even more regulation coming in the near future.
Regulatory compliance is a complex issue to tackle, as mistakes can be extremely costly and leave both lenders and consumers in vulnerable positions. To reduce risk, lenders need tools that can help them react to regulation faster and more comprehensively and review their systems frequently to ensure every single process is performed legally and ethically.
As a result, lenders should take advantage of software platforms that can help them put in place new policies and redundancies, automating them to ensure that everything is done to the letter of the law. These platforms also provide a level of modularity that makes it easier to add and remove different processes as regulations change. Once the system is set up, comprehensive and readable analytics allow them to audit their system every so often to keep things above board.
Skeps offers a comprehensive, end-to-end consumer financing platform that helps businesses modernize their entire payment process. Working with an entire network of established lenders, we go above and beyond one-click payment, also offering a one-click application process for several different types of consumer financing, including:
If you’re looking to partner with a forward-thinking fintech company that will get your financial products in front of as many consumers as possible, Skeps is the perfect fit.
Do you have more questions about fintech and banking? Request a demo or contact us at support@skeps.com.