Digital Identity Verification for Lending

The digital lending market in UK and Europe is growing

The internet is transforming the economy, and perhaps more visibly, financial services. For example, the lending market is one of the markets benefiting the most from the transformation from the traditional model to the digital model.

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Thanks to this digitalisation, the lending market in Europe and the UK is growing at a spectacular rate, and even so it is still behind the Asian and American markets, in which much higher figures are currently managed. However, the European market is becoming more attractive both for the traditional bank as well as fintech companies.

The data for this market is very encouraging. In 2018 alone, $800m has been invested, and it is estimated that the potential market for the creation of loans is $150b, and $450b in outstanding loans.

What can digital identity verification do for lending companies?

Digital identity verification processes are becoming increasingly efficient, both in terms of security and user experience. In this way, this increase in efficiency in, for example, the client onboarding process, which is a critical phase in client acquisition, translates in turn to an increase in the competitiveness of companies.

  1. Improvement in client acquisition: the onboarding process is up to 80% faster, which reduces the number of clients lost during this process. For example, a traditional onboarding process for lending lasts between 2 to 6 weeks, while the digital process lasts between 1 to 10 minutes.

  2. Cost reduction: the digitalisation of the process entails a saving of 30% on onboarding costs and between 40% and 70% in KYC/AML costs.

More significant data: digital solutions for user identification and account opening in financial services generate a global revenue of $2b.

Case study: Mitek Systems

Mitek is a global software solutions provider for digital identity verification. Its software is currently used by more than 80 million consumers worldwide, and is integrated into the apps of more than 6,100 clients.

Its solution is used above all by companies devoted to loans for vehicle acquisition, consumer loans and education loans.

The results, taken from the Nocks case study, are remarkable:

  • A 99% reduction in onboarding time – onboarding dropped from 12 hours to 5 mins.

  • A 98% reduction in the time needed for credit rating.

Some of Mitek’s clients that use this solution: Kabbage, MoneyGram, Synchrony Financial, Yubico...

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