How Big Data Is Evolving P2P Lending?
Peer-to-Peer lending sector is growing substantially by changing the dynamics of banking. And is further expected to be the future of banking. There are multiple reasoning as to why this sector is rising at a rapid pace. Thousands of investors and borrowers are being benefited through P2P lending platforms. It continues to rise in size, and companies are looking for ways to make their services efficient and beneficial to both investors and borrowers. And considering that the BIG DATA hold the key.
Big data is a term that describes the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis. But it’s not the amount of data that’s important. It’s what organizations do with the data that matters. Big data can be analyzed for insights that lead to better decisions and strategic business moves.
Big Data is one of the driving factors which is considered to prevail P2P Lending sector. Considering the technological changes in the 21st century, Big Data is one of the factors driving the P2P platforms. Big data enables P2P investors to become more specific and local when assessing borrowers. Investors can have access to large, complex datasets about borrowers or rely on the platform to assess borrowers by simply opting to buy into different asset classes. It provides P2P lending platforms with comprehensive data analytic processes and capabilities. Investors and P2P platforms can assess prospective borrowers at a granular level and provide accurate, fairer pricing of credit accordingly. Big data can be used to help automate parts or even all of the process, from the credit-history check and applicant review to application approval. Speeding up the decision-making process makes for more efficient operations for the P2P lending platform. The data can enable companies to create a more complete profile of a loan applicant making more accurate underwriting decisions, which results in a reduction in defaults for lenders and lower interest rates for borrowers.
The big data market is poised to grow by USD 142.5 bn during 2020-2024, progressing at a CAGR of 13% during the forecast period. By harnessing the available big data technologies it’s been forecasted that P2P Lending would be the future of banking systems and some of them will dominate the big data market as well.