Traditional lenders, i.e. banks, usually find it difficult to match the agility and granular understanding that P2P Lending players have. Banks’ credit evaluation and origination platforms are often industrial-age processes with a large quantum of human intervention. The operational and statistical models are based on predictability of borrowers’ behaviors across a large enough population set. While most practitioners in consumer and business lending in banks fully appreciate the rapidity with which change is happening, legacy investments in technology and the historical “bank-hall” mindset make transformation a challenge. New models & methods based on the new technology solution – Machine Learning will help the lenders better assess the Credit Risk assessment, which can provide more accurate information and hence protect the investors’ interest. The emerging knowledge will boost the P2P lenders to be capable of offering better service where banks are not offering.
Based on data from The World Bank, more than 200 million micro, small and medium-sized enterprises (MSMEs) in emerging economies lack adequate financing, due to lack of collateral, credit history and business informality. Until recently, alternative finance platforms have witnessed staggering success and even reached a stage of maturity in the Western markets, particularly in the U.K and U.S. In recent times even the East has also joined the ranks and given the alternative finance industry a major boost. Countries such as China, Singapore, Hong Kong, and most recently Indonesia, Malaysia, the Philippines, and India have displayed a tremendously positive response to several platforms providing alternative forms of finance to enterprises and individuals. The collaborative approach with banks towards alternative finance will then continue to pick up pace, enabling banks to expand their services to a larger client segment. As the largest player in the Singapore P2P Market, Capital Match aims to provide the fastest and the most convenient way for SMEs to get financing options.