In 2023 though, things are set to change with new observations and regulations in place. What does the year have in store for 2023? Let's check out the promising prospects of Fintech-Lending in 2023.
1. RAAS (Rule Engine As A Service) powered by AI:
The majority of loan origination system providers can take loan eligibility only from traditional data (Bureau, Bank Statements). But, the lending environment is rapidly evolving, and we require systems that can access data from a variety of sources, including alternative data (SMS, UPI, Amazon, Flipkart etc.).
Lenders and Fintechs can configure many factors from various sources and make choices with the aid of Rule Engine as a Service. RaaS should be able to pick up new information and develop a pattern or model. The lender won't have to pay for integration costs each time fresh data is required for underwriting because RaaS will assist us in finding a solution to this issue.
2. Embedded Finance for Lending:
Now, embedded finance has become more relevant, and lenders have developed the concept of easy financing. With an incorporated finance and lending system, a non-financial platform is able to offer lucrative loan services.
By 2023, the majority of companies with a small customer base will enter the lending industry, and this sector will boom. White-labeled embedded financial products are necessary now more than ever because brand customers don't want to visit another portal to choose the Buy Now Pay Later option.
3. Co-lending as a Service:
More opportunities for co-lending with banks are being explored by smaller NBFC operators. The likelihood of extending credit to various economic sectors has increased as a result of the trend. To align both the systems (their system and the banks' systems), small lenders must make significant investments in technology.
We anticipate that co-lending will increase in 2023, and the market will undoubtedly demand this Co-lending as a service that serves as a link between smaller lenders and banks' technological infrastructure.
4. Lending infrastructure as a Service:
A lender should pull data from at least 20 distinct APIs in order to go digital, which begins with digital onboarding, data collection from various sources, and instantly sanctioning, disbursing, and collections.
There are 20 distinct providers for each API. Lending is becoming a time-consuming and tech-heavy industry. As a result, the market requires Lending Infra companies to provide a one-stop solution for all of their lending needs.
5. Compliance as a Service:
It is no secret that frequent change in regulations and framework plays a defining part for a bank or an NBFC. Keeping the concept in mind, Compliance as a Service or CaaS emphasizes mitigating the risks of adaptation because of new regulations and risks.
That being said, CaaS allows companies to arrange for regular assessments and review the performance as per compliance. The future of Fintech and NBFCs lending would depend on how better adaptability the company has enforced concerning CaaS.
The fintech world is hoping for a resurgence after a quiet 2022. With these methods picking up in the coming months, it's unsurprising to see newer concepts emerging.
6. Peer-to-Peer Lending:
Peer-to-peer lending (P2P lending) has been around for a while, but it's expected to grow in popularity in 2023. P2P lending platforms connect borrowers directly with lenders, cutting out traditional banks and financial institutions. As more people become familiar with P2P lending, we can expect to see more borrowers and lenders using these platforms.
7. Blockchain-based Lending:
Blockchain technology has the potential to revolutionize lending by enabling secure and transparent transactions. In 2023, we can expect to see more lending platforms built on blockchain technology. These platforms will offer benefits such as faster transactions, lower fees, and greater transparency.
8. Micro-Lending:
Micro-lending involves providing small loans to individuals or small businesses that may not qualify for traditional loans. Micro-lending has already gained popularity in some parts of the world, and it's expected to become more common in 2023. With the rise of embedded finance and digital banking, micro-lending platforms will be able to offer loans more easily and efficiently.
9. Green Financing:
As the world becomes more environmentally conscious, green financing will become increasingly important. Green financing refers to loans and investments that support environmentally sustainable projects. In 2023, we can expect to see more fintech-lending platforms offering green financing options to their customers.
10. Automated Loan Servicing:
Loan servicing refers to the administrative tasks involved in managing a loan after it's been issued. In 2023, we can expect to see more fintech-lending platforms using automation to handle loan servicing tasks. Automated loan servicing will improve efficiency and reduce the risk of errors, resulting in better customer experiences.
