Speed is addictive and smoothness is enticing. In credit processes in particular. There is a general perception that speed automatically means poor quality, but is that true?
Applying for and deciding on a loan is one of the processes that has been rapidly digitized during the recent years. At the same time payment defaults have continued to increase. Many believe that a rapid process produces bad and irresponsible credit decisions and at the same time causing consumers to become over-indebted. However, the quality – and the responsibility or irresponsibility of the credit decisions – is based on the actual information used, not on how quickly the information is collected and processed.
The EUs second payment service directive, PSD2, is a reform that has already improved the lending process in many ways. At the same time, it enables speed, ease, quality and responsibility. The consumer acts as a captain in the process and determines the use of his/her data with his/her own consent. Automatically retrieved and analyzed data from bank account transactions in the credit granting process helps to calculate the applicant’s actual payment funds in real time. The applicant gets a quick decision and the lender can be sure of the quality of the decision. Society, as a whole, benefits from the fact that decisions are increasingly based on comprehensive data and no credit is granted to a person whose means of payment are insufficient to handle it.
In the future, PSD2 will also benefit the corporate customer, who can skip many manual steps in the loan application process by allowing the lender to access to the company’s bank account information. It may be that, for example, the preparation of interim financial statements for the purpose of applying for a loan becomes unnecessary when the company’s real-time turnover and cash flow can be calculated from the account transactions.
Are you interested to talk more about PSD2 and the possibilities we see, get in touch!