ezbob is one such company that has flourished since the introduction of new finance laws to European markets.
The company uses their cutting-edge data technology to find fast, efficient loans for businesses.
PSD2 is crucial for companies like ezbob, which were once unable to access the same sources of financial information that big banks kept within their walls. “Working with the banks is no easy task. I can tell you that we were trying for 4 or 5 years to partner with banks and luckily enough we decided to lend money ourselves using our platform. The company wouldn’t have been able to survive if we sat around waiting for a contract with a bank,” said Tomer Guriel, ezbob’s CEO.
Now, this fintech leader is able to aggregate this flood of new data to optimize their lending processes for all participants.
Loans through its platform take days as opposed to weeks or months and are much more affordable, thanks to the overhead that the company saves by employing algorithms and automation instead of paper bureaucracy.
Apart from streamlining the process, these new regulatory directives have also opened new funding channels to borrowers when it comes to sourcing the financing for SMBs.
The explosion of peer-to-peer (P2P) lending models like Funding Circle are helping connect investors tired of the prevailing low-interest rate environment perpetuated by central banks to capitalize on higher rates of return available from lending.
The advent of more automated underwriting processes helps evaluate creditworthiness in minutes instead of weeks, helping investors determine applicable avenues for their capital while opening SMBs to a wider audience of possible lenders.
At the end of the day, both parties win while the P2P network profits by connecting parties without risking its own capital.