By RARZACK OLAEGBE
The amount of information banking consumers can access is unbelievable. But the amount of data each human produces is even more startling. That is why, according to research, in the last two years alone, 90% of the data in the world was generated.
This data is created through searches, social media interactions, communication such as email, texts, etc. In 2020, research shows that every person on earth created 1.7 megabyte of data every second. That is incredible. However, banking consumers and others can also access information within seconds on an increasing array of devices such as tablet, smartphone, desktop, laptop etc. As a result, consumer trends are being influenced by people’s ever-growing relationship with their smartphones and the internet, and the impact these devices and data have on their lives.
Yes, these consumers are aware of this data overload. And the pace of change that has occurred. In response, consumers are looking for ways to sort and consume the inputs (and outputs) that are most likely to impact their daily lives. Lendtech such as Renmoney, Branch, Paylater, Kwikcash, Kiakia and other micro-lending platforms have full understanding of this and have used it to their advantage.
These firms have democratized lending to the extent that an applicant does not need to visit their physical offices before getting a loan. There is no paperwork. There is no collateral. There is no guesswork. Loans are approved in seconds, on the mobile phone, in traffic, in the office, at home, at parties, anywhere.
With the micro-lending platforms, interaction is easy and free, unrestricted and constant. This is not so with the banks.
This is so because they understand the need for speed. Banking consumers have an insatiable need for speed. Artificial Intelligence and machine learning make it possible to process data and deliver solutions in real-time, on the go. The consumer knows these technologies. They understand the capability of the machine. So, they crave an experience. This is what the micro-lenders provide.
Lendtech firms relate with the applicants. The banks do not relate with their customers. Lendtech firms are like a flower garden. The banks are like a garden full of plastic flowers: They are artificial. Your bank account officer may not interact with you, as long as your account does not pose a threat to the wellbeing of the institution.
But the person on your case in a Lendtech firm engages you regularly. The Lendtech firms are always in your face. Not intrusive, engaging; not shouting but offering you a soft loan without collateral in minutes!
The Lendtech firms are using available data to build a 360-degree view of each individual customer. They engage you real-time, all the time. According to media reports, in 2018, Paylater provided over 300,000 loans to Nigerians. The firm has over 90,000 active monthly users.
A friend in the business said that the “absence of a lending infrastructure” is what fuels the plethora of micro-lending platforms. These platforms have customized their services to suit the users and their behaviours.
On the flip side, Lendtech is uncovering the bigger problem of under-banking in Nigeria. The banks will not provide loans to small-time start-ups and one-man-riot-squad-businesses. Maybe they will now after the Central Bank of Nigeria (CBN) has compelled them to do so. Even if the banks do, the banks do not have the skills to make banking relatable because they are eyeing the bottom line.
With the micro-lending platforms, interaction is easy and free, unrestricted and constant. This is not so with the banks. The camel would have gone through the eye of the needle before you got a microloan in a bank. The banks do not have an attractive perception for providing credit. The process is exhausting. The loan is unattractive. But you would get a loan within a twinkle of an eye from a Lendtech without stress.
According to Jim Marous, co-publisher of The Financial Brand and publisher of the Digital Banking Report, a subscription-based publication that provides deep insights into the digitization of banking, the Lendtech firms really understand that the key to “humanizing the customer experience” is authenticity. And using data and advanced analytics to create a customer-focused engagement platform in which all interactions are personalized. The banks need that information. What do you think?