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Digital Credit for the Consumers

April 3, 2019

Digital Transformation in the 21st Century: Hardly anything we can not do online today. Track the latest news online, go shopping independent of opening hours, spontaneously book trips and flights from the computer at home – everything is possible without any problems. Only a computer with a reasonably efficient internet connection is required. The digital transformation seems superficially complete – right? Not quite, because in one sector, the “digital” development seems a little behind. We are talking about the banking sector. I beg your pardon? There are numerous apps, online banking and even online credit – yes, that’s right. And yet, the numerous FinTech ‘s accuse the banking industry of oversleeping the digital transformation. As evidence for this, the FinTech’s state that they ultimately exist only because of the traditional financial industry just slept in the development of new digital processes. But what about this statement? Quite a lot, because the fintech industry in particular is working hard on new digitization options, which should ultimately lead to fully digital processes. The result of this work is reflected in the so-called “fully digital” credit . What kind of credit is this?

The fully digital credit means enormous time savings in the interests of the consumer

The fully digital credit means enormous time savings in the interests of the consumer

 

In the current standard case, borrowers who want to make their loan online / digitally have to go through the standard online borrowing process. This includes the printing of the loan agreement as well as the documents required by the bank, their dispatch to the lending institution and a legitimacy check. Individual parts of this process, thanks to appropriate technologies, borrowers can already do online today. But which technologies in detail ultimately enable fully digital credit ?

Read online bank statements – Digital Account Check

An enormous saving of time when processing a loan application is the automatic transmission of account statements to the bank. For this purpose, the bank statements required for the loan are read from the online banking of the borrower and then forwarded to the lending institution. As a consumer you do not have to search for the right account statements thanks to this procedure. It also eliminates the need to print and send those documents. A process that in the past significantly slowed down the process of processing a loan application.

Personal identification via video chat

Even the most common and legally required identification procedure by means of Post-Ident can now be realized completely online. The so-called videoident procedure can be used by all borrowers whose lending bank offers this service. If you want to use the digital alternative to the Postident method, you start a video chat with a videoident provider with your computer or a mobile device. During the chat, the borrower holds his identity card or passport to the camera. As a result, the interlocutor controls the authenticity of the documents and the conformity of the face. After successful verification, he submits the required data to the bank. The legitimacy by means of videoident process usually takes less than five minutes.

Digital signature and automated payment

The next logical step in the development of fully digital credit is the topic of “legally binding signature” and “automated payment” of the loan amount. Here, too, it is now possible to implement these two process steps fully automatically or online. In the case of the digital signature, which is admitted as a legally binding signature, the applicant for a credit need only enter a signature password transmitted by the credit institution together with a and transaction number n (TAN). That was it already. Once this has been done, the first banks are working with a system that automatically triggers the transfer of the loan amount by registering the digitally drawn loan agreement.

The effect of fully digital credit for consumers

The effect of fully digital credit for consumers

If a bank that offers all these new technologies together offers a corresponding loan offer, this means that for consumers, the desired loan is technically available on weekdays, freely available within 24 hours , in other words, on its own account. Running, dependencies on opening times, the collection of required documents, etc. belong to history. Assuming you can make friends as a consumer with these new technologies – but then is another story …

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