• Latest
  • All
  • How To
finance

Technology is Turning the Way Finance Companies Work

November 17, 2021
Microsoft AI for Good Lab tool GIRAFFE

How Microsoft’s AI for Good Lab Is Helping Save Giraffes from Extinction

June 20, 2025
itel City 100

Gen Z Get a New Budget AI Smartphone With the itel City 100

June 20, 2025
digital-tv-standards-kenya

Kenya Sets New Rules for Digital TVs Starting Next Month

June 19, 2025
Kenya's Government Censors X for Global Image

Abductions and Arrests! Kenyan Government’s Fear and Hate of X Users Makes No Sense

June 19, 2025
DHgate Tablet Cases deals
drones-healthcare-delivery

Rural Kenya Is Turning to Drones to Speed Up Healthcare Delivery

June 18, 2025
TikTok

TikTok Could Go Dark (Again) in the U.S. This Week

June 17, 2025
whatsapp meta ads

Meta Officially Brings Ads to WhatsApp

June 17, 2025
Infinix Smart 10 HD

Infinix Launches the Smart 10 Series Lineup

June 16, 2025
Infinix Hot 60 Pro+

Infinix Wants to Fit a 5,160 mAh Battery in the Slim Hot 60 Pro+ Frame

June 16, 2025
Aigov

U.S. Plans to Launch AI Hub for Government Agencies

June 16, 2025
multichoice-dstv-showmax

Multichoice Subscriber Numbers Drop by 15% As Kenyans Cut Back on Spending

June 16, 2025
Huawei-Watch

Huawei Surpasses Apple to Lead Global Wearables Market

June 12, 2025
Techweez | Tech News, Reviews, Deals, Tips and How To
  • News
  • Entertainment
  • Reviews
  • Features
  • Editorial
No Result
View All Result
Techweez | Tech News, Reviews, Deals, Tips and How To
  • News
  • Entertainment
  • Reviews
  • Features
  • Editorial
No Result
View All Result
Techweez | Tech News, Reviews, Deals, Tips and How To
No Result
View All Result

Technology is Turning the Way Finance Companies Work

Samuel K Itotia by Samuel K Itotia
November 17, 2021
in How To
Reading Time: 4 mins read
264
0
finance

Technology has become synonymous with progress. Despite this being a dangerous idea (as not all progress is good), tech has had an extremely strong impact within the financial service industry. So much so that we had to have a name for it: fintech.

It’s not just cryptocurrencies and e-wallets that are reaping these benefits though, the business loans industry has also been souped up. The biggest improvement has been the efficiency of approving applications. In fact, you don’t have to look far to see what the “past” was like — banks continue to operate in such inefficient ways.

It takes around 4 weeks, often longer, to receive back a final decision on your business loan application at a traditional high street bank. Not to mention that you must attend physical meetings, speak to staff and fill in an extraordinarily long application form that usually entails a comprehensive business plan.

The whole process may be too long if your company is in need of financing. And just because you’re in immediate need of financing, it doesn’t automatically mean you should be ruled out because you’re struggling. In fact, it’s often a sign of growth. Startups have arguably faster growth potential now than ever before due to social media, technology, improvement in logistics and so on. This means that many growth opportunities might need to be put on hold until you hear back.

After all of this, you might be rejected on the grounds of not having a strong enough credit score. This alone is enough to infuriate, as it’s such a one-dimensional way of assessing a potential loan recipient. Risk assessment should reach much broader than this, yet banks continue to reason it for most rejections.

Lastly, if you get approved, you may have to wait another 2 months until you actually receive the cash. Again, the process is medieval.

New age lenders

Thankfully, there are alternatives banks for financing a small business. This has always been the case, but the competition and market as a whole has grown exponentially. In fact, it’s grown as a direct result of democratising information, decentralising the financial services industry and a growth in technological and Big Data capabilities.

The result, by general consensus among most of the SME lending companies, is that the process takes all of 24 hours, or 48 if you’re “unlucky”. You may even hear from the decision within 5 minutes. In fact, many will supply you with the resources necessary to figure out if you’re eligible, or how much you will repay. Business loan calculators help you do that.

Of course, the big difference here is that there’s no (or at least, very little), human input here. It’s all algorithms using your data, and historical data, to decide whether or not you’re an appropriate candidate for a loan. This predictive power becomes stronger and stronger as their database of records grows, thus leading to even faster times of approval.

Calculating borrowing risk from your current financial situation is much more-fair too than credit history. Not only is it unfair to completely write off a business due to their historical performance (it’s understandable that it would play some function in the decision), but it just isn’t very accurate. We’re all aware of the strange, non-business ways our credit can be negatively affected, such as merely applying for bank loans and getting rejected.

Many innovative lending companies are processing transactions from a business and using machine learning to classify each and every one. This risk data can then be used to automatically create simplified financial statements, financial ratios, affordability ratios, investability ratios, customer-supplier analysis and many more metrics. Once you have these, you can begin to make an informed-yet-instant decision over the financial health of a company. If you couple this with the repayment success of other previous companies, you may also be able to weight each ratio, KPI or metric in terms of importance.

Aggressive data aggregation and a strengthening in predictive power is perfect in finance, because ultimately risk comes at a price. Likewise, asymmetric information is the ultimate inefficiency which leads to short-term losses of the insurer/lender, but then the price rises due to the assumed increase in unforeseeable risk for everyone.

As these risk assessments get clearer and information becomes more symmetrical, suddenly you’re paying closer to the exact price of your real risk. This rewards businesses with honest intentions to grow with a more reasonable interest rate, meanwhile the technology has allowed them to receive the funds within a day.

SendShare146Tweet92
Samuel K Itotia

Samuel K Itotia

IT Project Consultant, Bachelor of Computer Science holder, Microsoft Certified IT Professional. Certified Google Apps Cloud Deployment specialist and Trainer. Passionate on the new trends of Technology. He will always share it with the world.

Related Posts

Microsoft AI for Good Lab tool GIRAFFE

How Microsoft’s AI for Good Lab Is Helping Save Giraffes from Extinction

June 20, 2025
itel City 100

Gen Z Get a New Budget AI Smartphone With the itel City 100

June 20, 2025
digital-tv-standards-kenya

Kenya Sets New Rules for Digital TVs Starting Next Month

June 19, 2025
Kenya's Government Censors X for Global Image

Abductions and Arrests! Kenyan Government’s Fear and Hate of X Users Makes No Sense

June 19, 2025
drones-healthcare-delivery

Rural Kenya Is Turning to Drones to Speed Up Healthcare Delivery

June 18, 2025
TikTok

TikTok Could Go Dark (Again) in the U.S. This Week

June 17, 2025

Latest

Microsoft AI for Good Lab tool GIRAFFE

How Microsoft’s AI for Good Lab Is Helping Save Giraffes from Extinction

June 20, 2025
itel City 100

Gen Z Get a New Budget AI Smartphone With the itel City 100

June 20, 2025
digital-tv-standards-kenya

Kenya Sets New Rules for Digital TVs Starting Next Month

June 19, 2025
Kenya's Government Censors X for Global Image

Abductions and Arrests! Kenyan Government’s Fear and Hate of X Users Makes No Sense

June 19, 2025
drones-healthcare-delivery

Rural Kenya Is Turning to Drones to Speed Up Healthcare Delivery

June 18, 2025
TikTok

TikTok Could Go Dark (Again) in the U.S. This Week

June 17, 2025

Best devices

budget smartwatches 2025

Best Budget Smartwatches To Buy in Kenya 2025

February 13, 2025

Best Infinix Smartphones To Buy in Kenya 2024

February 13, 2025

Best Laptops for Battery Life in 2024

August 21, 2024

Best “Battery Warrior” Smartphones To Buy in 2024

August 22, 2024

How Microsoft’s AI for Good Lab Is Helping Save Giraffes from Extinction

June 20, 2025

Gen Z Get a New Budget AI Smartphone With the itel City 100

June 20, 2025

Techweez is a fast growing influential source of technology news, reviews and analysis by leading tech geeks in the industry.

Follow Us

Editorials

Abductions and Arrests! Kenyan Government’s Fear and Hate of X Users Makes No Sense

Actors and Film Crews Are Worried About Veo 3 Taking Their Jobs

Samsung QLED TVs Now Officially Certified for Real Quantum Dot Technology

Trump’s Tariffs Will Be the End of Affordable Tech

5 Ways to Prep Your Tech for Resale

The Weaponization of PDFs: How Cybercriminals Are Exploiting a Trusted Format

More News

Meta Officially Brings Ads to WhatsApp

Infinix Launches the Smart 10 Series Lineup

Infinix Wants to Fit a 5,160 mAh Battery in the Slim Hot 60 Pro+ Frame

U.S. Plans to Launch AI Hub for Government Agencies

Multichoice Subscriber Numbers Drop by 15% As Kenyans Cut Back on Spending

Huawei Surpasses Apple to Lead Global Wearables Market

  • Terms Of Use
  • Techweez Brand
  • Privacy & Policy
  • Contact Us

© 2024 Techweez - Palahala Media Group may earn a commission when you buy through links on our sites.
A Palahala Media Group Brand. All rights reserved.
.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

Techweez | Tech News, Reviews, Deals, Tips and How To
Crunchy Cookies 🍪 Ahead!

Hey there! Just a heads-up: we're big fans of cookies - both the digital and edible kind! 🍪 We use our cookies and some from third parties to ensure your browsing experience on our site is smooth sailing and secure.

 

But wait, there's more! We also use cookies to gather stats and insights on how you navigate our site. It's like getting a behind-the-scenes peek at your digital adventures!

 

Don't worry, you're in control. You can adjust your cookie settings anytime to suit your preferences. Feeling curious? Dive into our Privacy Policy for all the juicy details. Happy browsing! 🚀

Functional Always active
Listen, this legal stuff is about as exciting as watching paint dry. But it basically says we only use your stuff for what you asked us to do, and nobody else gets to peek!
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
It's those sneaky cookie crumbs websites leave behind to count visitors, like counting ants at a picnic! Totally harmless, just for fun facts. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
Hey there! Just letting you know we use some fancy gizmos to remember your preferences. This way, we can show you ads that are, well, not completely bananas.
Manage options Manage services Manage {vendor_count} vendors Read more about these purposes
Make cookies
{title} {title} {title}
Techweez | Tech News, Reviews, Deals, Tips and How To
Crunchy Cookies 🍪 Ahead!
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
Listen, this legal stuff is about as exciting as watching paint dry. But it basically says we only use your stuff for what you asked us to do, and nobody else gets to peek!
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
It's those sneaky cookie crumbs websites leave behind to count visitors, like counting ants at a picnic! Totally harmless, just for fun facts. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
Hey there! Just letting you know we use some fancy gizmos to remember your preferences. This way, we can show you ads that are, well, not completely bananas.
Manage options Manage services Manage {vendor_count} vendors Read more about these purposes
Make cookies
{title} {title} {title}
No Result
View All Result
  • News
  • Reviews
  • Features
  • Editorial
  • Automotive
  • Entertainment

© 2024 Techweez - Palahala Media Group may earn a commission when you buy through links on our sites.
A Palahala Media Group Brand. All rights reserved.
.