The modern world runs on data analysis. Everything from stocks and finance trading to marketing and advertising runs on a foundation of solid data that helps direct decisions and focus attention on how a company’s actions impact its business offering.
Whilst not as data-derivative as, say, stockbroking, the lending world is no different in this regard. Over the years, data has become more and more a part of day-to-date life for lenders and brokers. A rise in new, tech-heavy lenders and digitally-driven lending methods such as Peer to Peer means you would now be hard-pressed to find a bank or a broker that didn’t do some form of data analysis.
But what has this meant for the average business looking for a loan? Well, the most obvious effect of the rise of data is that lenders now offer more tailored options for finance. Instead of having to guess what’s popular, a lender can look at historical data and develop an offering that’s suited to what the market is likely to be looking for. It’s a win for both the business and the lender. The lender gets more loans, and the business gets finance that may work better for them.
However, despite all the benefits data can bring, we aren’t suggesting that the lending world should leave all its decisions to computers. Relying too heavily on data points is a path to cookie-cutter loans and applications. Lending is a people-driven business, and like people no two loans are the same. Having the data helping you to make a properly informed decision is definitely a good thing, but algorithms aren’t everything. Ultimately, getting the right loan for a client requires a broker to use their own common sense and personal experience, not put blind faith in the data.