Lenders today must be in-tune with the ever-changing and evolving landscape of the consumer lending environment. Consumers want fast-paced seamless transactions, as well as a fair chance in the lending approval process, which may require lenders to go beyond the traditional credit score. Utilizing alternative data sets combined to capture a more comprehensive financial view of loan applicants can help borrowers prove their creditworthiness and allow lenders to say “yes” to more loan applicants.
Four significant trends are reshaping the consumer lending environment that lenders should note to remain profitable and relevant in today’s dynamic environment.
The Way People Work is Evolving
The coronavirus pandemic expanded remote work and gave way to more “gig” or freelance opportunities, evolving what it means to earn money. It would not be out of the ordinary for a borrower to be driving for Uber or Lyft after being off the clock from a traditional day job, renting out a home on Airbnb, or spending weekends working odd jobs via TaskRabbit all to make extra cash. They may even use one of these peer-to-peer services as a primary source of income.