Can technology replace professions where human touch is needed?
Recently, I gave a talk at the AltLend Conference in Las Vegas where discussions about innovative finance options for small businesses were center stage. Speakers including members of the U.S. Small Business Administration alongside presidents and CEO’s of lending sources that span the gamut from traditional bank loans to alternative lending.
One panel member, Brock Blake CEO of www.Lendio.com, stated during the conference that loan brokers are akin to travel agents–and should be phased out and replaced by technology. In my opinion, this is not, and should not, be the case.
Financial advisers, accountants and loan brokers fall into a category of professions where human touch and real-world experience factors heavily into decision making when it comes to situations that affect another person’s life and livelihood. While there is most certainly a place for technology to improve and expand the lending industry, I think its true purpose is to supplement the work that loan brokers do.
In the same way that you would contact a lawyer if you were served a lawsuit or visit a dermatologist if you had a bad rash, you would want to work with an experienced loan broker to receive expert advice and help in securing a business loan. While the Internet can help you research and learn about any given topic, there is no true replacement for personal, expert assistance.
I think we need to be careful in viewing the Internet and technology as the sole answer for problems in the small-business lending world. When a business is looking for good, solid advice for loan options and enters into the phase of preparing their business for a loan application, technology should take a backseat to an experienced loan broker who can walk the small-business owner through the process in order to achieve the desired results.
We hear often that switching to a more autonomous lending process on the web is what will turn business lending on its head and revolutionize the industry, but we don’t often hear the flip-side of this argument. While the net can provide speed and convenience in lending, it often times comes with an incredible price in terms of interest and factor rates and short amortization periods.
Technology can solve for many things and changed industries forever, but if the premise is false about the ability to properly and responsibly do this, it will ultimately cause more problems then it tries to solve.