Data Sharing within Financial Ecosystems: Everyone Wins

Financial lenders have long been known for their sloth-like decision making when it comes to approving or denying loan applications for businesses. This has created significant problems for business owners, especially the ones who are in dire need of capital.

The slow process of loan approvals not only creates financial problems for businesses, but also puts a strain on personal relationships. Moreover, it can even lead to the loss of customers as businesses are forced to close their doors due to a lack of funds.

The good news is that there are now a number of financial lenders who are offering fast and effective loans to small businesses. These lenders understand the importance of speed and flexibility when it comes to approving loans, and they are able to provide the funds that businesses need in order to stay afloat.

As a result, business owners no longer have to worry about the slow and cumbersome process of seeking approval from traditional financial lenders.

In this article, we look at how modern lenders, like ourselves, are challenging and changing the landscape, and look in greater detail at the concept of the shared economy and data sharing within the financial ecosystems.

Reasons for Slow Approval Pace of Lenders

While we are on the subject of pace among financial institutions, it is only fair to comment on why the decision-making can be time consuming. Doing so also gives us the ability to decipher how modern day lenders are picking up the pace, and what kind of processes are being put in place.

It may not be apparent at first, in reality, there are a number of reasons why lenders move slowly when making decisions over loan applications; the two reasons below are cited the most regularly:

1. Risk Assessments

One reason is that they need to assess the risk involved in each application. Lenders need to be sure that businesses will be able to repay the loans, and they often take a cautious approach in order to minimise losses.

2. Application Tracking Issues

Another reason why lenders move slow is because they are often inundated with loan applications, and they simply cannot keep up with the demand. As a result, many applications end up getting lost in the shuffle.

The Turnaround in Decision-Making

You may be wondering that both the above reasons should have viable solutions. And, you will be right.

Simply, by streamlining their processes and hiring additional staff, modern day lenders are hoping to make their decision making quicker and more efficient. This will benefit both businesses and lenders, as timely access to capital can help businesses grow and thrive, while also reducing losses for lenders.

However, the biggest differentiating factor that modern day lenders are utilising is the ability to stay on top of technological advancements, and integrating these advancements to provide a better solution for everyone involved.

The General Market Trends

We are not just talking about financial lenders on this point; the era of big data has ushered in a new age of competition, where businesses must move at lightning speeds to make decisions based on the latest information. In this rapidly changing landscape, the ability to share data quickly and efficiently is essential for success.

One way to achieve this is developing business ecosystems.

A business ecosystem is a network of organisations that share data and resources in order to cooperate and compete more effectively. By sharing data within a business ecosystem, companies can make faster decisions and gain a competitive advantage.

In today's constantly evolving marketplace, the ability to share data quickly and efficiently is key to success. Plus, by developing business ecosystems, businesses are utilising the benefits of a shared economy, which, until recently, was only seen from a consumer perspective.

Shared Economy

The shared economy, also sometimes known as the collaborative economy, is a rapidly growing concept that has been getting a lot of attention in recent years.

Put simply, the shared economy is based on the idea of sharing resources and services instead of owning them. For example, instead of buying or renting a car, you might use a car-sharing service like Zipcar. Or instead of staying in a hotel, you might stay in someone's home through Airbnb.

As you can imagine, the benefits of the shared economy are numerous. For one thing, it can help to reduce consumption and waste. It can also make it easier for people to access the services they need without having to own them outright.

In addition, the shared economy often relies on technology to function, which can make it more efficient and convenient than traditional models. With all of these advantages, it's no wonder that the shared economy is gaining prominence around the world, and modern financial lenders are one of the beneficiaries.

Now, before we go into how we are utilising the benefits of data sharing within the shared economy of our financial ecosystems, let’s unwind the benefits of data sharing in the financial sector.

Data Sharing within Financial Ecosystems

Data sharing is a key aspect of the shared economy. By sharing data, individuals and businesses can improve the efficiency of their operations and better understand the needs of their customers. Additionally, data sharing can help to create new opportunities for innovation and collaboration.

For example, by sharing data on transportation patterns, businesses can work together to improve traffic flow and reduce congestion. Furthermore, data sharing can help to build trust between individuals and businesses, as well as create new relationships between people who may not have otherwise had the opportunity to connect. Ultimately, data sharing is essential for the shared economy to function effectively and efficiently.

In the lending world, this is especially important. Lenders need to be able to access data quickly and easily in order to make informed decisions. Data sharing allows lenders to assess risk, identify opportunities, and make better decisions about lending, solving every challenge that stood in the way of the sloth-like decision-making of traditional financial institutions.
Plus, the benefits do not end there.

Data sharing also enables lenders to better serve their customers by providing them with the information they need to make informed decisions about their finances.

Now, data sharing is a critical part of the modern day lending process, and it is essential for lenders to have access to accurate and up-to-date data.

How SME Capital Utilises Data Sharing with Insight Share

At SME Capital, we believe that when a company borrows money from us, they are our client and we are their partner. We are dedicated to helping the relationship grow and ensuring that the partnership is successful.

We work closely with our partners to understand their needs and objectives, and we tailor our services to meet their specific requirements. We also provide ongoing support and advice to help them achieve their goals.

Our ultimate aim is to help our customers succeed, and we believe that by working together, we can achieve this.

One of the core elements that supports the SME Capital lending system is a process of efficiently and transparently sharing data with each other. This system that ensures mutual success is a system and process we call Insight Share.

The system securely plugs our Finance team into the accounting and banking systems of our customers. With this in place, we can tighten the feedback loop between reporting periods and it gives us the ability to support the customer teams, with support and guidance as well as reducing administration and friction.

All in all, Insight Share gives us a better understanding of customers, which helps us provide more accurate advice and guidance. We are able to assess customer needs and objectives, and tailor our services accordingly. Additionally, data sharing also helps us identify potential issues or problems early on, so we can take corrective action as needed.

Ultimately, data sharing is beneficial for both us and customers alike, as it helps to create a more efficient and effective relationship between us. Further data sharing allows us to more effectively support our customers in meeting their financial reporting requirements.

The benefits of data sharing are clear for both SME Capital and our customers. By working together as partners and sharing data openly and transparently, we are able to build stronger relationships that are mutually beneficial and thrive over time.

To learn more, get in touch with us today.