With the launch of new Peer to Peer lending websites, the question that often comes to one’s mind is how secure are they? As with any P2P lending website, you must look for the measures taken by the platform to keep your data protected to know how securely your information is exchanged on the internet while making transactions. Although the lending does not involve any bank, still you must not take its repayment lightly.
You should make sure that all your transactions on the P2P platform are hundred per cent risk-free. If the money transfer process on the P2P lending portal is secure, it ensures the lenders that their money is safe. So before you become a member of the P2P website, you should make yourself assured that it is secure. A secure site has (HTTPS) in its address. That means it implements Secure Socket Layer (SSL) and Transport Layer Security (TLS) technologies to make sure there won’t be any outside interference. Let’s look at security tactics implemented by the developers of the P2P lending websites to guard them against any exploits.
The Security Mechanism for Protecting the Servers and Assets
The client’s data is saved on servers secured behind firewalls. Only the authorised team at the P2P portal have access to this data. Access levels are created for various types of users. So the P2P platform’s team can reach out to the data relevant to their department. All the information related to the funding agencies is transferred over the secure tunnels to prevent it from leaking.
The Peer to Peer lending portal’s team places the physical files and documents like contracts in a fool-proof locker. Only the authorised staff can take them out. The authorities insist that all the financial transactions must be executed by a trustee that makes an additional security layer. Moreover, according to the regulations, the P2P lending firms must develop a highly secured online system that should implement all the latest internet security standards.
What about the Loans Applications in the Lists without a Lender?
There may be cases when the loan request may not receive a response from a lender. The reason for this type of scenario can be the lack of lenders on the platform. Or the borrower profile may not be appealing to the lenders.
The majority of platforms have a loan approval criteria, which offers an opportunity to the borrower to take a lower amount. Several platforms facilitate the borrowers to receive the loan if a minimum of eighty per cent of the approved sum is funded. If this percentage is not reached due to any reasons, the loan request is not served and the borrower is informed about it.
How is data security guaranteed for both the investors and borrowers?
Data shared to the investors by P2P lending portal doesn’t contain all the details for the borrowers. Every borrower is given a specific customer ID by the P2P platform that is shown in each transaction.
Borrower’s information inside the P2P platform is kept private. Brief details about the lender’s decision on a particular profile are shown only when the loan approval occurs.
What’s the Response for Technical Glitches?
Every Peer to Peer lending platform has procedures that become active when a technical glitch occurs. Each transaction is verified several times with several checks to ensure smooth and error-free functionality.
But if a transaction has an error despite these validations, particular systems initiate notifications to specific team members, showing the glitch and informing them to take necessary action. In addition, some Peer to Peer lending portals have security mechanisms that can find out any fraudulent activities and deal with them instantly.
The Final Outcome
It is important to know about the security measures of a P2P lending site before becoming its member. It will help you to find out if the Peer to Peer lending platform is implementing the standard practices to make their transactions safe. They must have a secure HTTPS mechanism in place to ensure all the data passes from secure channels. Also, the P2P lending portal’s team should store the physical documents in fool-proof lockers that the platform’s authorised staff can access only. All the transactions are carried out by the trustee to provide an extra security layer. Borrowers are given specific IDs with which they are identified on the network. There is an appropriate and prompt response for the system’s glitches, that informs the administrators about the suitable actions.
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