How Can Lenders Avoid Bad Business?
The sole aim of a banking firm is to keep Capitals and maintain easy transaction between the bank and her customers, which may include individuals, institutions, companies, industries and firms. This commitment has proven to be more profitable and even more vigorous as well as increasing the chances of mutual beneficial transaction and more so, reducing risk of banking and promoting growth of our society at large. But banking firms should take note of more measurable ways to prevent loss in business dealings as this will help to the continuance of the banking system and more so, work and plan to develop new and adequate strategies to strengthen the Economy.
Loans are granted to individuals with Collateral in line with the amount applied for; for a million dollars, a million dollars collateral is required. Capital is granted based on efficiency and effort of the individual applying. Every credit made must be secured with an assurance that the individual meets the requirements else, it would be bad business and yield to a negative result in the end. Bad business is when the borrower has given wrong information about the resources he claims to own so as to meet the requirements of getting loans for bad credit with no guarantor. Therefore, banking firms must confirm the individual’s claims before any fund is released so as to avoid a scenario of loss in return.
Guarantee for refund must be assured before releasing the fund to the recipient. A proper investigation has to be conducted so as to confirm that the recipient of the loan will be able to pay back at the agreed time frame. This implies that adequate attention has to be made to monitor the monetary value terms and conditions as an approach to ensure safety and avoid Bad Credit in the end. Bankers must be committed to minimising the risk involved in loan transactions. Some methods, which could be employed and considered, are:
1. The bank must confirm all the necessary details of the recipient including the recipient’s full name, home address, current address, as well as his or her religious affiliation. These details must be accurate and up-to-date.
2. The bank must know the actual Net worth of the individual outside his collateral including the financial stand of the guarantor and possible ways to access them should be in case the recipient is unable to repay the same or if he or she dies.
3. Banking firms should be able to trace the recipient’s capital should in case the individual sell collateral without the knowledge of the bank and leaves to another region. This will take place if the bank does not verify carefully about the details given by the recipient. Carelessness can lead to a scenario where a document is manipulated but for millennial banks, much emphasis has to be given on cyber security in a community where Cyber-crime has risen in the recent times. There are many methods of protecting the database of individuals who are registered to a particular bank, here are some basic parameters to be considered:
· Bank Coding- Bank transactions should be in code encryption where
only the bank would have access to details of their customers, it should be
encrypted with both vocal, facial and fingerprint system.
· Database coding- The database should be programmed in such a way
that it ensures a safe condition to the information as regards their bank
account.
· Bank Transaction encryption- Technology is now the controlling
factors in our present-day world. The world is indeed changing and advancing
daily. In the old time of Stone Age, through the iron age, and today we have
the Computer age; an era of Technology. Individuals can now make their
transactions online without visiting their bank. This is an advantage but also
a disadvantage in that information of these customers could be traced if the
online platforms or applications they used are not well encrypted.
Much consideration and careful examination should be employed to avoid unwanted scenario especially in a world where evil has risen more than good. Thus bankers need to cultivate a new method to keep their organisation strong as well render appropriate services to the customers.
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