A new world in banking is emerging as millennials look for on-demand solutions for their credit needs. For them traditional lenders are highly inefficient at originating and servicing loans, and lengthy, paper-based application processes take too much time. In recent years, online lending platforms, which include so-called "marketplace lenders" and "peer-to-peer lenders," have emerged to fill the gap. These companies use technology to source, underwrite and service small-balance loans cost effectively.
Big data technology enables these platforms to make fast, sophisticated underwriting decisions and arms them with capabilities such as online application gathering, online eligibility assessment and identification verification, as well as automated information pulls from third-party sources, thereby enabling borrowers convenient and increased access to credit while providing investors with high-yield investment opportunities.