The digital revolution has modernised and reconditioned every little aspect of our lives. It has improved and advanced everything from how we communicate with each other to how we work or apply for loans.
One of the biggest impacts of digitalisation is seen in the banking industry. Banking, which was once a tedious activity and a sector lacking in efficiency, has received a facelift. All thanks to digitalisation. Services like online banking, paperless approvals and e-KYC have changed how consumers interact with banking and non-banking financial institutions and vice versa. One of the biggest advantages has been a sharp reduction in the turnaround time taken to process a loan, especially the king of all loans – the Home Loan.
Getting a roof over your head that you can call your own is everyone’s dream, albeit an expensive one. It requires a lot of mental and financial preparation before you can kick-start the loan procedure. Applying for a Home Loan was such a cumbersome task some time ago. Even with everything going good, it easily took a month or two to process a Home Loan request. Today, the same can be done within a week. In fact, you can get approval for your loan application within a day and the disbursal of the loan amount takes about a week. Isn’t that great?
After digitisation took over, many positive trends have emerged in the banking industry. One being an increase in the demand for Home Loans. Not just that, customers are also demanding a convenient and speedy way of going about the loan process. Digitisation has helped by allowing banks to process many more loan applications at a time than before.
So, what helped their case?
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Big Data Analytics
One facet of digitisation is big data analytics. Loan approval involves analysis of many factors – income, job, brand value of the company, age, etc of the applicant. If you think bankers ponder over these metrics to determine your eligibility then you couldn’t be more wrong. All the data is fed into sophisticated software systems which help determine your eligibility. Tech based calculations are impressively accurate and they reduce the possibility of human errors. Then there are tools to study trends and predict consumer-need patterns. With some foresight from these tools, banks can plan their strategy ahead of time.
Data analytics has given a major boost to the investment vertical of the financial industry. Consumers, today, get an accurate idea of what returns to expect when they invest a certain amount, or which investment options are a hit. Analysis of this sort helps the consumer and is profitable for the bankers. After the financial crisis of year 2000, making safe, calculated investments has become paramount for investors as well as investment analysts.
Banking-related documentation work has been the bane of everyone’s life. Even post digitalisation, documentation remained a big hiccup. The wait for a bank representative to verify the documents unnecessarily delayed the loan process. It almost killed the dream of owning a home for many. Then came the paperless transaction phenomenon – it was almost God-sent. Paperless transactions made banking easier, adding a new star to the whole process. Although, currently only a handful of banks accept documents online, the trend is quickly gaining pace and popularity. Once in full force, the service will greatly help speed up the loan-disbursal process.
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Back in the day, banking was a subject more complicated than rocket science. The internet was still building its library and Google as was not the all-knowing entity that it is today. All the knowledge people garnered about banking came from speaking with other people. And, more often than not, people based their decisions on half-baked information. Digitalisation has closed this information gap. All banks have ‘solid’ websites, with more than enough literature on their offerings and other nitty-gritty. Other than this, there are a number of blogs out there on personal finance, which give people information on all that they need to know and do before taking a financial decision.
Then there is mobile banking, OTP, Aadhaar-based eKYC and the old and simple text messages to keep a person informed about what’s happening and what they need to consider before they take their next financial step. The best part of this story is that you can apply for a Home Loan from your smartphone. This is the consumer side of the story.
From the lenders’ viewpoint, digitalisation has allowed them to streamline their process and make the entire banking organisational structure, leaner.
In a nutshell, digitalisation has increased transparency in the banking system. Though we speak of Home Loans here, other loan offerings such as, Personal Loan, Car Loan or Education Loan, too are flourishing under the digitalisation wave.
The next level is all about making banking easier and convenient for the end consumer. And, in spite of all the progress, there is still a lot of scope for improvement. Think about video conferencing and artificial Intelligence!
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Though this may be in the future, you don’t need to wait so long for a Home Loan. We have more Home Loan offerings than the houses you have seen. Compare your favourites and apply away.