The last frontier of the credit world is called loan counseling with a robot: what might seem a futuristic hypothesis has become reality thanks to a US start-up, Lending Robot, which has launched an investment fund managed solely by beings virtual without the assistance of consultants in the flesh. The digitalization that has invested the world of credit, like other productive sectors, is experiencing unthinkable repercussions, just like this fund managed entirely by robots and humanoids, focused on loans between private individuals and companies: we are therefore at a later stage than the fully automated functions that have already invested large segments of the financial world, since a system that grants a loan to a private individual without going through any credit institution is an absolute novelty. Let’s see how loan consultancy works with a robot designed by this start-up, a development that could largely take place in the near future.
Loans without physical consultants, can you?
The idea of Lending Robot is based on an algorithm used to regulate the flow of loans, without the need for the assistance of financial consultants in suits and ties as we are used to today: the whole system exploits information and databases present in the platforms of loans between private individuals, a new development of e- to-peer lending, the digital infrastructure that has already made possible the personal loan disbursed between online private individuals, and that has experienced very interesting developments also in Italy, through a network of sites and platforms that takes the name of social lending. Loan consultancy with a robot is therefore part of a new dynamic that does not include the traditional channels represented by authorized financial intermediaries, such as banks, but based instead on the relationships established between private individuals and companies, making it easier to access to credit also to those who are unable to provide the traditional guarantees required by credit institutions for the granting of a loan.
How Lending Robot works
How does Lending Robot work ? According to the executives of the Seattle start-up who gave life to this first financial advisory service with the help of only humanoids, each user can decide to automatically invest a sum of money allowing to fulfill multiple requests for financing, diversifying the risk and distributing it to a number of aspiring beneficiaries. Unlike a traditional investment fund, which usually retains 2 percent for the commission and 20 percent on the profits for each transaction, Lending Robot will cost much less to those who will use the service, asking for 1 percent of commission and 0.59 percent of expenses. These very competitive costs are possible thanks to the automation of the loan service between private individuals on the web, in which brokerage costs are reduced to a minimum, and even the platform operating costs are much lower. And the interest rate turns out to be lower than normal consumer credit both for those who lend money and for those who get it.
The situation in Italy
While waiting for artificial intelligence to land even in Italy, in 2016 the P2P lending situation in Italy saw the disbursement of over 92.5 million euro in the form of online private loans: according to P2PLendingItalia, a company that monitors the data of 6 platforms active in our country, 46.7 million were disbursed in the form of personal loans, while the remaining 45.8 million performed the function of loans to businesses. In the Italian legal system social lending is not regulated, and at present it is possible to state that in this type of loan there are no guarantees to protect the lender in the event of the debtor’s insolvency: however each of the social lending platforms operating in Italy they provide, in the event of arrears of applicants, debt collection programs on behalf of the lenders involved.