It’s undeniable: technology makes life faster and easier. In our digital age, we enjoy and benefit from services and products that are delivered to our doors in hours instead of weeks. We’re all used to Amazon Prime and we expect a certain level of speed in everything we purchase or subscribe to as standard.
The same goes for lines of credit and personal or business loans. With so many adults across America turning to self-employment in recent years, it’s never been more important for lenders to be able to rapidly support their clients with a smooth, easily navigated digital service that gets them the credit they need in record time.
Today we’re touching on the algorithms and technology that makes this all possible. Let’s take a look.
The bad old days
Getting a line of credit a few decades back was a far from quick process. Your options as an applicant were far more limited than they are now, with mainstream banks being the most available options outside of friends, family and occasional access to private investors.
Processing a loan could take weeks if not months, with personal evaluation being performed and calculated by human beings in the main. As time passed, however, computation became increasingly important for brokers and lenders in helping them provide a service that was faster and more reliable than their competitors.
Algorithms: Decades in the making
Things like machine and AI learning are big news nowadays, and for good reason: they are the driving force behind a staggering amount of our technology and interconnected culture. What many fail to realize, however, is that America has grown and thrived partly due to algorithms for decades already.
Getting to where we are today hasn’t always been smooth sailing, though. In the past, rigid algorithms failed to act in a sophisticated enough manner to accommodate for the reality of the clients, customers and metrics they were designed to support, leading to spectacular failings such as the infamous ‘Black Monday’ stock market crash in 1987.
A complex conundrum
As you’d expect, the ability of an algorithm to act in a reliable, safe and legally compliant manner is the cornerstone of every lender and broker around, from smaller companies to the largest banks.
Not only does the development of an algorithm need to be commercially viable, but it also needs to avoid ethical and legal issues surrounding bias. As algorithms have grown in sophistication over the years, experts have begun to identify and iron out issues that can lead to unintentional and problematic bias in their functions, such as inadvertent discrimination against certain demographics or classes of people.
Nowadays, algorithms have grown into staggeringly complex and rapid entities that are able to process large amounts of data against thousands of different and unique variables.
What does that mean for obtaining credit?
As a consumer, it’s great news. If you’re considering seeking extra funding to start a business or extend a project, you have lenders like Idea Financial who can potentially provide significant amounts of money in as little as one day from when an application is made.
That’s a real benefit in a modern business landscape where speed and agility are of the essence. Instead of waiting weeks or months to meet with a bank and its staff, you have the option in 2021 to make an online application to a trusted lender that will be processed in seconds and responded to in record time.
A little history on the science of lending
And there you have it! It’s easy to take for granted just how much work goes into the technology behind lending and banking in America and the wider world. We hope you found today’s article informative and useful. Take care!
