The role of the loan industry is changing rapidly. Today's corporate environment requires new solutions to keep up with the competition and deliver the best financial services. In particular, transformations often need to be applied to three pillars on which all loan cycles are based: datasources, payment gateways, communication channels. Automation and renovation of these areas through integration with existing systems can be a worthy starting point for allowing a number of important new technologies to enter the lending business.
In lending or in any other industry the integration of data, payment gateways and communication channels is carried out through APIs. It means it requires a development team, either in-house or outsourced. This approach will help improve the user experience, develop the brand, and enhance the efficiency of the workflow. However, it also has some drawbacks.
Each service or solution separately can be good. But each lender faces the trouble of integrating all of these components into one working project. The troubles are: high cost of development engineers, low control over terms and deadlines, integrations by themselves do not add value to the company's business, but only eat up resources. No venture will add a million to a company's valuation just for integrating with Plaid or any other system. Therefore, it is important to find a solution whose integration cost will be worth the benefits that it will bring.
Accurate and up-to-date data is the key to success in the loan business. Organized, up-to-date and complete information that is available to company employees with the appropriate authority will give you a 360-degree view of your business and enable you to make real data-driven decisions. This can be achieved by integrating good software to bring together data from different resources in your software stack. Fortunately, there are many such solutions on the market today.
Plaid, a fintech company, offers APIs designed to connect third-party financial applications to banking services. In particular, the company develops innovative solutions for financial data management and storage. Plaid has a strict privacy policy whereby personal financial information cannot be sold or shared with outside companies or individuals. The company also applies high data protection standards. Data protection involves such technologies and measures as Advanced Encryption Standard (AES-256), Transport Layer Security (TLS), multi-factor authentication, as well as regular monitoring and testing of all software components by the security service.
MX offers a complete set of data enhancement APIs to provide rich and validated financial data. MX APIs are fully customizable according to how the clients want their data to be used. And security measures such as OAuth and Direct APIs tokenization will prevent data from being leaked or misused. Users can be sure that their names, passwords, or other sensitive data will not be shared with a third party. In addition, with MX software, companies can monitor the movement of data and how customers manage it, which will help enable personalized experience. MX data connection solutions are used for hassle-free account holder identification (IDV), statement retrieval, transaction history viewing, account aggregation, insights, balance and account verification (IAV), and more.
Argyle's fully integrated payroll connectivity is used by many financial providers to make smarter decisions and automate all loan cycles, from loan origination to payments. Argyle software provides access to information regarding the employment and income of customers. What's more, it has a customizable notification feature to notify in case of a job, salary or position change. Up-to-date data will help to more accurately assess the ability of customers to repay a loan.
As for borrowers, they can also benefit from Argyle by setting up automatic loan repayments from their paycheck. This will save them the trouble of doing it manually and worrying about late payment penalties. Thus, lenders get 2/3 fewer defaults versus traditional ACH debits, and borrowers get a better user experience.
Prism Data has introduced a revolutionary new approach to assessing financial condition and creditworthiness. To make the best credit decision, Prism has developed the proprietary CashScore system, which is based on the analysis of clients' financial transactions, instead of the traditional credit history. With the permission of a client, information about financial transactions is anonymized and uploaded to Prism Data via the API. Then the platform analyzes them and issues a three-digit CashScore with a decoding of the result.
The advantages of this approach are considered to be increased accuracy of decisions, expansion of the target market, powerful fraud checking and detection of problem customers with overestimated credit scores.
Equifax provides access to useful services and information for both consumers and financial institutions. The service aims to develop solutions for better control of credit reports and protection against identity theft and fraud. Equifax's credit score and report features include daily access to a credit score, credit score monitoring, access to a credit report, and credit report monitoring. Identity theft protection features include automatic fraud alerts, credit report lock, blocked inquiry alerts, identity restoration, and identity theft insurance.
Microblink specializes in accurate and easy user identification using innovative technologies, including artificial intelligence. The software will allow users to instantly verify their identity by scanning their face and ID documents. The Microblink platform will simplify onboarding, protect against fraudsters, and guarantee KYC compliance without burdening customers with too complicated checks.
Any business that intends to sell its financial services, be it personal loans, payroll financing, cash advance and others, needs a reliable and up-to-date payment system.
This software solution, commonly used in digital lending, works for money transfers in two directions:
loan funding, when a company issues an approved loan to an applicant;
loan repayment, when a borrower repays a debt to a lender.
The accessibility, speed, security, convenience and price of money transfers depend on the choice of a payment system and its integration. Different payment services have different security features aimed at detecting and protecting against fraud, data encryption standards, and monetization systems for their services. Let's take a look at the most popular payment transaction solutions used by leading financial companies today.
ACHQ is one of the leading suppliers of electronic and ACH processing in the United States. The list of its partners includes such large companies as Microsoft, Samsung, Vimeo and Amazon web services. After ACHQ entered into a partnership with Plaid, ACH payments through the service have become even more secure and convenient. Due to an ACHQ processor_token and Plaid access_token, all payments are securely processed without the need to store confidential banking data. To enjoy the full benefits of payment service integration, customers need to have two accounts, one in ACHQ and the other in Plaid.
Highline is a premier provider of software designed to automate lending and payment processes, thereby reducing missed payment losses and enhancing lending opportunities. The Highline platform supports all forms of recurring payments that can be deducted from the customer’s connected payroll. Of particular interest is a special system for dividing paychecks and flowing loan payments through the client's virtual account. It reduces the risk of overdrafts and overdue payments. Understanding technology and how money flows helped the Highline team ingeniously combine payroll and bill paying into a streamlined process. This method gives creditors much more confidence that debts will be repaid, while borrowers get a better way to repay them.
Another solution for automating accounts payable (AP) and instant funding is the REPAY service, designed to ensure a stable and secure cash flow. Connecting to the Visa and Mastercard global networks allows REPAY to instantly transfer funds to debit and prepaid cards immediately after loans are approved. Among the useful features and services offered by the REPAY platform are: transparent and customizable reports, secure storage of important payment information, vendor setup, single-use virtual cards, and more.
Paylinace offers an all-in-one package for lenders and merchants. The service can be customized in terms of how and when payments are sent. The Paylinace platform's improved compatibility feature allows it to be integrated into your Loan Management Systems (LMS) and Payment Gateways. Moreover, several integration methods are offered, such as batch, API, and sandbox. Paylinace detects and prevents fraud by complying with the Nacha WEB debit bank account verification rule, pre-verifying customer account information, and blocking unauthorized or administrative returns.
LoanPaymentPro is a cutting edge debt repayment platform built by experienced lenders and developers. It is used for immediate funding by processing various types of payments including ACH, bank cards and RCC/Check21 and is beneficial for both merchants and lenders. LoanPaymentPro can be easily integrated with the LMS system via API and Sandbox.
In the lending business, it is very important to have good communication with both existing customers and potential ones. It is in the interests of a lender to make sure that a client can quickly and conveniently receive the necessary information, a reminder of the upcoming write-off or the need to make a payment, and the like. Therefore, it is very important that users have access to the maximum number of communication channels. Let's look at the most popular communication services on the market.
Twilio is a US-based business communications cloud software provider. It provides API integrations for companies to communicate with customers through audio-video calls, text chats, emails and other channels. Twilio is able to work as an office telephone exchange, connect different employees and make it easier to work with a lot of incoming requests. Twilio leverages the power of Amazon Web Services to deliver cloud services to customers. The company also developed its own markup language TwiML, which provides users with direct data exchange with its services through webhooks.
RingCentral is a cloud-based communications platform that is used primarily for business calls. The RingCentral system allows you to connect all your office phones and your employees' phones in your office or anywhere in the world. The RingCentral system includes all the features a person might expect from a business phone network, including caller ID, call forwarding, voicemail, call screening, call recording, easy transfer, call logs, presence status, and conference calls.
Installing the required software is easy and very fast. All you need is a computer that is connected to the Internet and one phone to get started. The RingCentral software comes with the SoftPhone application, which allows you to use an Internet browser and a microphone, speakers or headset for phone calls. With the app, you can also make calls from your smartphone or tablet. In addition to this, there is also an option that will allow you to use your current phone for calls.
Sendinblue is a service that offers marketing and sales tools, specifically for creating and managing email newsletters. From the technical advantages of the service, which help to improve the marketing strategy and interaction with customers, we can distinguish:
- a large library of email templates and a powerful visual editor;
- a modern statistics analyzer with the construction of heat maps by the intensity of clicks in the body of the letter;
- drag-drop landing page builder to create a more personalized design and email structure;
- automatic determination of the optimal time for launching mailings.
Sendinblue can be easily integrated with all major CMS tools and eCommerce platforms. Options to choose from include an email API, SMTP relay, webhook, or plugin. Sendinblue guarantees that 97% of transactional emails will be delivered to the customer's inbox.
Mailchimp is one of the major email marketing services in the world. Mailchimp is more just a stand-alone service, it's an entire ecosystem of products and tools tied together. The mail system can be divided into four major components: a database of contacts (subscribers), letter templates and a visual editor for them, an email campaign control panel, and a transactional mailing system. Mailchimp integrates with more than 250 external services and tools, including modules for popular CMS systems, modules for integration with e-commerce systems, CRM systems and payment tools.
The introduction of new products and services, such as those we have discussed above, is no longer a benefit, but a necessity for landers who strive to provide excellent service and will not tolerate being the last in their niche. However, before allowing anyone to implement anything into your well-established system, it's important to research the issue and make sure you've chosen the best possible solution at a reasonable price.
Now more and more finance companies prefer ready-made solutions that do not require programming. One of such solutions is the software developed by Neofin. It is extremely intuitive and also combines out-of-the-box integrations with agile, no-code customization tools. The use of ready-made modules instead of hard-to-integrate software allows fintech not to waste time on integration, but to focus on their business, risk issues and economic models.
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