The U.S. lending market has seen the emergence of many new players over the past few years. While the future of peer-to-peer companies that are following in the footsteps of Lending Club is as uncertain as that of any tech trend, more traditional lenders are increasingly adopting new software solutions to help ensure their financial security.
With advanced information gathering and automated processes, lending software is "building the consumer bank of the future," according to Louis Beryl, CEO of Earnest, a Silicon Valley lender that focuses on personal loans. Earnest and a handful of other companies are depending on software to help them make educated decisions about the suitability of granting a loan and the ideal terms of each deal.
By gathering all the data they can on a prospective borrower, lenders can go beyond the raw numbers, like credit score, sometimes resulting in granting loans to people who may be turned down by major banks. For instance, The New York Times reports that a single bankruptcy in an individual's credit history is not necessarily a strong predictor of future risk, even though some traditional lenders may view it as such.
The Consumer Financial Protection Bureau (CFPB) says it is encouraging the development of advanced lending analytics, while keeping an eye on the market to ensure that the automation of key decision-making processes doesn't inadvertently result in discrimination against certain groups.
Graveco's personal loan software is proven to help lenders keep track of all their open deals. The tool automatically generates reports and updates payment information, and there are systems in place to guarantee the complete security of all sensitive financial information.