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Although the pandemic has had a few negative impacts on the global economy, it still has driven numerous developments in most industries, including technology, real estate, finance and insurance, among others. However, the finance industry has a direct relation with the global economy, and when it comes to lending - things have changed dramatically.
Let’s take a look at some recent changes impacting the finance industry in terms of credit and how these developments affect lenders while moving forward:
During the pandemic, many businesses resorted to digital services and so did banks. Experts had predicted the expansion of digital banking services during these unprecedented times. And that’s precisely what happened. A study in the US shows that over 14% of online adults, who used digital banking for the first time won’t be using it for the last as the majority approved the quality of service.
As digital services take the lead in banking structures - both modern and traditional, banks have started cutting physical branches in favor of digital services for quite some time. However, it presents a few challenges as well. Banks are now working towards making lending more straightforward and transactions easier by automating processes such as risk management.
With the onset of the pandemic, the amount of savings by individuals rose and the term “Forced saving” was introduced. It means that the majority of consumers were not spending as they usually would and the little expenditure was through an online retailer.
What can we expect from consumer behavior and their spending and saving habits in the upcoming years? In terms of the broader picture of the economy, this could mean a potential boom once governmental restrictions are eased making it good news for struggling local retailers.
As a result of lockdowns and other government restrictions, consumer credit took a fall. However, business lending is on the rise because of loans being a significant instrument for businesses, including business support and business credit, to help keep it stay open long term. Lenders should prepare themselves and analyze the risks introduced after the pandemic.
As the world moves closer to the new normal, it’s time for lenders and individuals to keep a track of the lessons learned during the crisis. First and foremost, be prepared. One of the most interesting ways in doing just that is attending a finance conference, such as Money 2.0 Conference. It provides a platform for finance associates to stay ahead of the competition with various knowledgeable sessions. It’s become imperative to get on top of the game,
The question arises that after all the advancements and overcoming the challenges, what will set your business and brand apart. That is a little bit of personal touch and humanity. It can happen in various ways, such as work toward making the customer journey frictionless and further make lending more accessible and socially responsible.