Traditional Banks & Lenders vs Micro Lenders – What’s the difference?

The Australian banking sector is monopolised by traditional banks and lenders – for good reason! For a long time, traditional banks and lenders were the only option for banking and getting finance for most consumers. 

However, MicroLenders have been taking the lending world by storm. The entire FinTech (financial technology) industry is buzzing about the potential of Micro Lenders, as it shows what a possible future for lending could look like.

Why are Micro Lenders like My Pay Stat such a big deal though? For us common consumers, what difference does it make to go to a traditional lender instead of a Digital MicroLender?

This blog will address these questions, as well as introduce the top benefits of Digital Micro-Lending.

What is a Digital Micro Lender?

Digital Micro Lenders are 100%, digital lenders. Yup, that means they don’t have a physical branch anywhere. They’re a rising new star in the world of lending, and they’ve sometimes been coined as ‘challenger lenders’ because digital micro lenders concentrate on offering apps, software, and other tech that streamline lending from your mobile devices. 

They make getting a loan as easy as possible through pure online services. Because of how they work, they also tend to be more flexible and transparent than the large, traditional banks and lenders we all know, and struggle to love. 

Just like any normal lender, Micro Lenders are a place to borrow money from and hand over interest repayments. Nowadays, Micro Lenders operate with the latest Artificial Intelligence FinTech to enable even more customised app and personal lending experiences that are tailored to the customer. 

And That’s How Micro Lenders Became Popular

Micro Lenders have boomed in popularity. Especially overseas, Micro Lenders have become extremely popular, overhauling the finance sector like how Uber transformed your life and home or Airbnb with cheap lodging options that weren’t hotels. Popular Micro Lenders, have more than 12 million users because it eliminates many of the common fees that physical banks and lenders ask for. 

Not only overseas though, 100% of online banks and lenders and all their conveniences are quickly getting their market share in Australia too. 

So what can an online lender offer you?

Why should you switch from a traditional, long-established bank or lender to a digital micro-lender? Customer loyalty and all that, right?

Well, through the use of artificial intelligence in their technology and operating systems, Micro Lenders can now offer extremely broad services much more quickly.

Gone are the weeks and weeks of waiting time, negotiations, discussions, and comparisons of interest rates. AI can do assessments, compile reports, and present them to you in a jiffy. Through this, you get personalised service processing your banking and lending needs less time, providing you with a much smoother, quicker, and easier experience.

With AI, Micro Lenders can find customer pain points and develop practical solutions that can help you in a variety of forms. You’re probably already experiencing some of what AI can do with your current banking app – it can track your spending, give you spending reports, help you keep to your budget, and save money so you can get to spending on your goals, whether it’s a house, a holiday, or even just a cosy dinner with your partner.

 The Prices are Lower going Digital 

The fact is because Micro Lenders don’t need physical locations, rental, calculating seats for a bunch of staff, and all that shebang, the cost to running an online business is naturally lower. This means the services you receive are also naturally lower in price. This is why banks and loan providers like MyPayStat are naturally more competitive as they provide what you need quicker, cheaper, easier, and while still providing services under the same laws of responsible lending as everyone else.

Check out what a digital online Micro Lender can offer you

If you’re curious about how a digital micro-lender can help you, contact one of our friendly MyPayStat customer service desks! We’ll be more than happy to answer your questions about what we can provide you.