Recent work by Currencycloud has suggested that the gap in differences between traditional lending and payments is narrowing.
What is driving this gap to narrow? Currencycloud noted a number of factors, including the fact that most of those who require lending will â€“ at some level â€“ be processing and collecting payments in some form.
Due to a transition to more online and digital services and online marketplaces, companies are now suddenly able to reach more customers and purchase from further afield to access better prices and new products. Furthermore, the growth of open banking means that lenders have greater access to accurate payments data for credit and risk assessment purposes.
Lenders also are starting to expand their offerings to deliver more of what borrowers need in one place to access and use their funds.
Driving a big part of this revolution is LendTechs. Many of these firms are fast evolving and are using more specific data than ever and offering a wider and better service choice to their customers â€“ with one key part of this being payments.
Currencycloud noted that the ability to â€˜ownâ€™ the customerâ€™s transactional data allows for a huge increase in reliability and visibility when it comes to making decisions. This has been seen with the launch of open banking and more API-led integrations to payment gateways.
According to the firm, these solutions are helping to close the gap between the two sectors and are in turn creating huge strides forward in LendTech, both internally and for the end user.
Lenders are securing much more visibility and access to real time data, better reporting functions and are delivering the ability to create new revenue streams, but at the same time, it can mean a whole new host of functionality such as easier access to funds and bolstered possibilities on how they utilise those funds effectively.
Currencycloud concluded, â€œLenders and payments providers will continue to work together more and more effectively in the coming years and weâ€™ll continue to see an evolution in how LendTechs work with their borrowers. The bringing together of two fast-growing and innovative sectors will only result in more efficiency and better customer experiences right at the point customers are beginning to trust â€˜alternativeâ€™ and digital solutions more and more themselves.â€
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