INTRODUCTION TO DIGITAL AND TRADITIONAL LENDING PRACTICES: A COMPARATIVE ANALYSIS

AUTHOR – RADHIKA PILLAI, STUDENT AT GIBS BUSINESS SCHOOL, BANGALORE

BEST CITATION – RADHIKA PILLAI, INTRODUCTION TO DIGITAL AND TRADITIONAL LENDING PRACTICES: A COMPARATIVE ANALYSIS, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (1) OF 2025, PG. 554-565, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

This research investigates the comparative dynamics between digital and traditional lending practices in the evolving financial services landscape. The study examines the technological, operational, and customer-centric aspects of lending practices. The research employed a multi- stage stratified sampling method, collecting data from respondents across various stakeholder groups including financial services consumers, banking professionals, and fintech experts. Key hypotheses were tested, focusing on technological efficiency, risk assessment accuracy, customer experience, financial inclusion, and technological adaptation. The findings reveal significant differences between digital and traditional lending practices in terms of operational efficiency, risk assessment capabilities, and customer satisfaction. Digital lending platforms demonstrated superior performance in loan processing and customer experience. The study also found that AI- driven credit scoring models provided more accurate risk assessments compared to traditional methods. However, challenges persist in areas of regulatory compliance and data security. The research contributes to the existing body of knowledge by providing empirical evidence on the transformation of lending practices and offers strategic insights for financial institutions navigating the digital transformation journey. Additionally, the study proposes a framework for evaluating and implementing digital lending technologies while maintaining robust risk management practices.

Keywords: Digital Lending, Traditional Banking, Financial Technology, Credit Assessment, Technology Acceptance Model, PLS-SEM, Artificial Intelligence, Risk Management, Financial Inclusion, Customer Experience, Banking Innovation, Fintech Transformation, Digital Banking, Lending Technologies, Financial Services.