FinTech Compliance Expertise

Digital Lending: Trends, Consumer Benefits and Regulatory Implications

The use of digital technology and the Covid-19 pandemic have significantly transformed the lending industry in recent years. We see more financial institutions shift towards digital transformation and adopt advanced and innovative technologies like artificial intelligence (AI) and machine learning. The quest for better customer experience, quicker service, and improved profitability has led to the emergence of digital lending.

Growth in Bank Fintech Partnerships, Evolving Models and Examples

According to a 2019 PWC survey, 42% of banks engaged in joint partnerships with fintech companies, a figure that more than doubles to 94% of financial services companies expressing confidence that fintechs would help grow their company’s revenue over the coming years.

Congress Investigates Fintech Lenders

In many ways, small fintech lenders look and behave more like consumers than corporations. But unlike consumers, they are not protected by disclosure requirements under the Truth in Lending Act.

While lenders are required to comply with anti-discrimination laws like the Equal Credit Opportunity Act, these lenders are not subjected to supervisory exams like those required for community banks and credit unions.