HomeBlogTechnological Advances in Private Lending

Technological Advances in Private Lending

Technological Advances in Private Lending

Like many other areas, private lending changes as technology advances. Different digital platforms fuel innovations in areas like accessibility and risk assessment while streamlining loan processing.

The changes simplify the online private lending experience for lenders and borrowers as the industry becomes more efficient.  

What Technological Innovations are Influencing Private Lending? 

The Cloud

The cloud delivers various services businesses use daily, like storage servers, databases, software analytics and networking over the internet. This technology lets a business use computing resources without investing in hardware and IT personnel.  

A complete 93% of respondents to a KPMG survey, The 2022 global technology report – A Canadian perspective, report they are advancing the adoption of technologies like the cloud.

The cloud is vital to private lending for several reasons, including disaster recovery capabilities. The information private lenders back up can be quickly restored, minimizing data loss. 

From a cloud server, a private lender can work from anywhere if they have internet access. Cloud services are scalable, and they can be adjusted to the needs of a private lending business. It’s an efficient way to manage resources.  This kind of operational efficiency can lead to quicker processing times.  


Technological innovations in cybersecurity allow private lenders to boost their credibility regarding online transactions.

  • Endpoint detection and response monitor events so that cyber threats can be responded to in real-time. Private lenders who suffer data breaches where sensitive client financial information gets stolen can suffer legal and reputational consequences. This is an excellent way to protect client and private lender information from hackers.
  • Cybersecurity as a Service (CSaaS)  is another technological innovation. These subscription models offer top security to private lenders without significant upfront costs for proprietary software and its personnel. Cutting costs allows private lending companies to stay competitive. 

Other innovations fall under an umbrella term specific to the financial service and banking industries. 

How is Fintech Changing The Landscape of Private Loans?

Fintech, or “financial technology,” covers several different services, including applying for credit without needing a bank branch, managing investments, raising funds for a startup and a variety of others.

It’s an evolving industry. It works for businesses and consumers in several ways, including investment apps, cryptocurrency and mobile banking.  Here are a number of the ways that it’s changing the landscape for private lenders and private loans.

  1. Fintech uses digital technology to allow private lenders to issue loans through mobile apps and websites.  Using modern technology like secure API connections, big data and AI, lenders can access many different data points to make informed application decisions quickly.
  2. These technologies are amplifying accessibility and improving risk assessment at the same time. Using fintech, private lenders can expand their evaluations past traditional financial histories and credit scores. Payments to utility companies and even other metrics like the frequency of insufficient funds can be used. That represents a more holistic approach to assessing someone’s creditworthiness.
  3. Fintech is also doing its part to foster equitable financial services. By using alternative criteria, this is the technology that’s breaking down barriers to what were once under-served populations.

These technological innovations influence how private lending works. The remaining question is about their security.  

Are Online Private Lending Platforms Safe and Reliable?

Online private lending forms are more accessible and efficient. They speed up the lending process and provide accurate appraisals. 

For example, machine learning algorithms speed up the entire underwriting process by reducing human error. That makes the entire process more credible. 

Many private lenders who work in the online space are transparent and supply detailed information about their processes, interest rates and risk categories. These firms implement robust security measures to protect clients against data breaches and cyber attacks using some or all of the following tools: 

  • Transport Layer Security (TLS) and Secure Socket Layer (SSL). Any private lender’s website URL will have HTTPS in the URL to indicate these two tools are being used. 
  • All sensitive data between a private lender and a client is usually encrypted. That makes any information in transit undecipherable without the proper decryption key.
  • Private lenders usually stay on top of software patches, and that means both applications and systems are kept up to date with the latest ones that guard against known vulnerabilities. 

Since online private lending platforms are safe and reliable, it stands to reason there are big advantages to using one. 

What are The Benefits of Using Technology in Private Lending Processes?

Like in many other areas, technology supplies some significant benefits to the private lending process. 

Faster Document Collection 

Fintech can use some of the best digital tools, like APIs, to gather digital signers and documents. That makes for a faster document-gathering process over traditional lenders. They often require physical paperwork that gets signed and may require in-person visits. 

Decisions That Are Data-Driven 

Private lenders can use analytics to make decisions using vast amounts of data. That includes alternative credit points that add to the financial information. This alternative data is usually the type that’s not reported to credit reporting agencies and can include items like utility bill payments and rent payment histories.

Increased Efficiency

Automating different parts of the private lending process reduces manual input and errors. Ultimately, private lenders can process loans more accurately and quickly. For example, automating the loan agreement process and generating templates that calculate things like interest rates speed everything up. 

Mortgage Broker Store focuses on numerous mortgage-related products. One of our priorities is mortgages that don’t meet traditional lending institution requirements. Our team includes private lenders, brokers, and licensed mortgage agents. Let us help you prepare for and get a product that meets your requirements. 

Email ron@mortgagebrokerstore.com or call 416-499-2122.

About Jonathan Alphonso

Mortgage Agent, Web Developer, and Real Estate Investor. Together with Ronald Alphonso I run MortgageBrokerStore.com. I write about a variety of topics on Canadian mortgages and real estate. Our particular specialty is dealing with Ontario power of sale and foreclosure situations.

Get a Quote

Our experts will review your situation and offer a quick approval.

    Your Name (required)

    Your Email (required)

    Phone Number (required)