This originally appeared as a section in a very
long article called "The Rapidly Changing Face of
Computing". It is part of a series of articles describing
various innovations in technology. The article appeared on a
Compaq/Digital run website. The original location was: http://www.digital.com/rcfoc/980921.htm
by Jeffrey R. Harrow
Senior Consulting Engineer
Corporate Research & Advanced Development,
Compaq Computer Corporation
Insight, analysis and
commentary on the innovations and trends
of contemporary computing, and on the technologies that drive
(not necessarily the views of Compaq
Copyright (c)1998, Compaq
I must admit to being surprised to find that online loans are
already a half-billion dollar business; $482 million in loans
were originated on the Internet last year. And it's likely to get
bigger -- $40 billion bigger by 2001, according to estimates by
Forrester Research described in the Aug. 27 TechWeb (http://www.techweb.com/wire/story/TWB19980827S0008).
But I can certainly understand why people shop for loans
online. With mortgage rates seeming to fall every day, the
ability to instantly check rates and compare the offerings from
different lenders at the click of a mouse sure beats the old way
of spending hours on the phone. In fact some sites, such as
Microsoft's Home Advisor, let you define what type of loan you're
looking for, and it will Email you with an alert when any
thresholds you set are crossed (http://homeadvisor.msn.com/ie/trackers/ratetracker.asp)!
Once you decide on a loan you do want, some sites further
streamline the "old," time-and-paper-intensive process.
For example, using new tools such as ARC Systems'
"LT2k," a lender can take an application and perform an
online credit check in as little as 15 seconds, approving (or
not) your loan right then! As ARC Systems (http://www.arcsystems.com/)
"By providing real time on line access to credit
reporting bureaus and assuring accuracy of credit reports,
the system increases speed and quality of the underwriting
process. By including a rules-based decisioning system,
automated underwriting decisions, based on a lenders
specific decision criteria, can be returned in seconds
(on-line), versus days normally required."
I found another bit of their material that, to me,
crystallizes just why the whole genre of "online
business" is becoming so valuable -- for both consumers and
" LT2k will automatically underwrite the loan and
will calculate the maximum loan amount, the interest rate,
the debts that should be paid off, the monthly payment, the
monthly savings, and the loan conditions.
By automating the process, LT2k™ can underwrite
loans at a lower cost than the traditional method of
transferring the information, pulling credit and responding
back to the borrower."
I am now beginning to wonder, as such capabilities become more
widely available, how long it will be before people (and
businesses) won't be able to conceive of dealing with loans
"the old way..."
Convergence -- the coming together of computing,
communications, content, and consumer electronics, IS
changing the rules.