Importance of Accounting and Financial Data APIs for Lenders
If you’re a bank or an alternative lender or some other financial institution, you may use different tools and software to check the creditworthiness of your borrowers. No matter how great a tool you have at your disposal, it is often insufficient for providing all the essential information you need to make a perfect lending decision.
For example, you may have software that provides you the borrower’s credit history-related data. However, you might also rely on different resources to calculate your risks. In addition to credit score, annual revenue, and collateral, various other factors play a significant role in lending decisions. An accounting and financial data APIs helps lenders to bring in a range of data points and insights from a third-party source, generally from fintechs.
Growing Importance of APIs in Lending
Better Lending Decisions
In today’s lending environment, lenders need more than conventional data to determine if the borrowers have the ability to repay the loan amount. It’s not the quantity of data but the quality of data that matters most.
So, the more real, accurate, and futuristic information of a borrower you have, the greater your edge over the competition. Accounting and financial data APIs provide information to lenders they need to check the creditworthiness of their borrowers. Thus, you are better positioned to make intelligent lending decisions than other lenders.
Get the Best Features and Services
With API, lenders can get the best features and services to streamline their financial processes. Today, various fintech companies are creating innovative APIs for banks and bringing a revolution in business lending.
- A single, simple API with having real-time capabilities, get enhanced visibility of most robust accounting and financial data
- Analyze real-time, short-term, and long-term cash flow forecasting data
- See a precise picture of your borrowers’ future financial health
- Reduce administrative hurdles concerning managing your job, like reviewing a loan application, checking a borrower’s creditworthiness, and more
- Real-time integrations with all the major accounting software systems
- Simple to use and numerous accounting and financial data points
- View, track and examine all the important financial data of your borrowers in one place
Balancing Risk and Service
The conventional lending process has a lot of limitations. The lenders want to get as much data as they can, but they are helpless without an innovative technology to determine borrowers’ creditworthiness and gather risk data efficiently.
As a bank or financial institution, if the loan underwriting process takes too much of your time, you can’t make a profit and stay ahead of your competitors. Moreover, if it takes a great deal of time for your customers to submit the loan application, then there are strong chances they won’t prefer your platform.
Today, many banks are lacking the technology to balance risk and service. An accounting and financial data APIs prevent efficient data gathering and tell lenders that a business will be able to pay back the borrowed amount, so there’s no risk in providing capital, and vice-versa.
Bottom Line
Emerging financial technology has the power to transform business lending. Today, APIs are being used to determine creditworthiness, streamline the loan process, and improve the customer experience for borrowers. By gathering the real-time past, present, and future financial information securely and conveniently, lenders will be able to better determine their borrowers’ creditworthiness and make smarter lending decisions.