The Advantage of Speed, in Hard Numbers
Fintech lenders process about 20% faster with 25% lower defaults. The measurable case for speed in lending, including the evidence that cuts against it.
Alfred BEditorial Reviews
Most arguments for moving faster in lending are arguments from intuition. Borrowers are impatient, competitors are quick, nobody enjoys waiting. All true, all unfalsifiable, and none of it survives a budget meeting.
There is better evidence than that. Research from the Federal Reserve Bank of New York found fintech mortgage lenders processed applications about 20% faster than traditional lenders, roughly ten days, while their default rates ran about 25% lower. Speed and diligence moved in the same direction, not opposite ones.
This is what the measurable case for speed actually looks like, including the parts that cut against it.
How much faster, exactly?
The most rigorous public number comes from Federal Reserve Bank of New York Staff Report 836, published in February 2018 by Fuster, Plosser, Schnabl and Vickery. Studying US mortgage originations, they found fintech lenders reduced processing time by about ten days, or 20% of average processing time.
Broken out, purchase mortgages completed 9.2 days faster against a 52-day average, and refinances 14.6 days faster against 51 days. The refinance gap is the larger one, at 29%.
Ten days is not a rounding error in a market where rate holds expire and buyers have closing dates.
Does faster mean looser?
This is the objection every risk committee raises, and it is the right objection. The same study answers it directly: default rates on fintech mortgages ran about 25% lower, and the authors found no evidence supporting a lax screening explanation.
That finding deserves its weight. It does not prove that speed causes lower defaults. It does establish that the speed advantage in that sample was not purchased with worse credit decisions, which is the specific fear the trade-off argument depends on.
The mechanism the authors point to is process rather than standards. Faster origination came from better handling of the application itself, not from asking less.
What does the delay actually cost?
The clearest evidence on response timing comes from outside lending. Harvard Business Review published research in March 2011 by Oldroyd, McElheran and Elkington analyzing 1.25 million sales leads across 29 business-to-consumer and 13 business-to-business US companies.
Firms that tried to contact a potential customer within an hour of receiving an enquiry were nearly seven times as likely to qualify that lead as firms that tried an hour later, and more than 60 times as likely as firms that waited 24 hours or longer. Qualifying meant having a meaningful conversation with a key decision maker.
An underlying study by Dr James Oldroyd, presented in 2007 and conducted with the Kellogg School of Management, put the decay inside the first hour: the odds of contacting a lead dropped by more than ten times over that hour, and the odds of contacting between a five-minute and a thirty-minute response dropped a hundredfold. That study was sponsored by a vendor selling lead-response software, which is worth knowing when weighing it. The Harvard Business Review analysis is the independent one.
Neither study is about lending. Both describe the same behaviour: a person who has just raised their hand is briefly reachable, and then is not.
What borrowers say they are buying
Small business borrowers are explicit about it. The Federal Reserve Banks' Small Business Credit Survey, 2020 Report on Employer Firms, found 46% of online lender applicants cited speed of decision or funding as a factor in where they applied, ahead of chance of being funded at 39%.
The same survey found bank applicants prioritising speed even more highly: 54% of large bank applicants cited speed of decision or funding, against 46% at online lenders. Wanting a fast answer is not a fringe preference confined to people who choose fintech lenders.
And the share is moving. The Federal Reserve Banks' 2026 Report on Employer Firms found applications to online fintech lenders rose from 17% in the 2020 survey to 29% in the 2025 survey.
What the evidence supports, by source:
| Finding | Measure | Source |
|---|---|---|
| Fintech processing speed advantage | ~20% faster, about 10 days | NY Fed Staff Report 836, Feb 2018 |
| Default rates, fintech vs traditional | ~25% lower | NY Fed Staff Report 836, Feb 2018 |
| Contact odds, under 1 hour vs 24 hours | ~60x more likely to qualify | Harvard Business Review, Mar 2011 |
| Speed cited as an application factor | 46% of online lender applicants | Fed SBCS, 2020 report |
| Speed cited by large bank applicants | 54% | Fed SBCS, 2020 report |
| Share applying to online lenders | 17% (2020) to 29% (2025) | Fed SBCS, 2026 report |
The part that argues against speed
Faster does not mean better liked. The Federal Reserve Banks' 2026 Report on Employer Firms found 60% of businesses that borrowed from online lenders reported actual borrowing costs were higher than expected.
That is a real finding and it belongs in any honest version of this argument. Winning on speed and losing on expectation-setting is a specific, common failure. It suggests the speed advantage is being converted into volume rather than into satisfaction, and that the disclosure work has not kept pace with the origination work.
Speed gets you the borrower. It does not keep them, and it does not substitute for being clear about price.
Where the time actually goes
If the plumbing were the constraint, this would be an engineering problem. It is not. Open Banking Limited's published API performance statistics for June 2026 show an average response time of 349 milliseconds across the UK's nine largest banks, at 99.80% weighted availability and a 99.50% success rate across 2.8 billion calls.
Sub-second data retrieval at four nines of availability means the delay in a lending decision is not the data connection. It is everything assembled around it: what gets asked, in what order, how many times a file goes back, how long it waits for a human.
That is a process problem, which is the good news, because process is the thing you control.
What we couldn't verify
Two things worth stating, because this topic attracts confident numbers with nothing behind them.
There is no credible published lending application abandonment rate. Every figure we found traced back to vendor marketing or trade content recycling unattributed numbers. If someone quotes you a percentage of loan applications abandoned, ask where it came from.
And there is no Canadian data on time-to-decision or time-to-funding. We checked the federal SME financing surveys directly. They carry approval rates, 97% for debt financing in 2025 against 89% in 2024, but no speed measures at all. Every timing figure above is US or UK.
What to measure
Start with the number almost nobody owns: median time from first applicant touch to communicated decision. Not average, which one stalled file distorts. Median.
Then split it by stage, because the aggregate hides where the time sits. And track it alongside your loss rate rather than instead of it, since the New York Fed finding is that these two do not have to trade against each other.
Common questions
How much faster are fintech lenders?
Federal Reserve Bank of New York research found about 20% faster processing, roughly ten days, with purchase mortgages 9.2 days faster and refinances 14.6 days faster.
Does faster underwriting mean higher defaults?
Not in the largest study available. The same New York Fed research found fintech mortgage default rates about 25% lower, with no evidence of laxer screening.
How quickly should a lender respond to an application?
Harvard Business Review research found firms contacting within an hour were nearly seven times more likely to qualify a lead than those waiting an hour longer.
Do borrowers actually choose lenders on speed?
46% of online lender applicants cited speed of decision or funding as a factor, according to the Federal Reserve Banks' 2020 Small Business Credit Survey.
What percentage of loan applications are abandoned?
No credible published figure exists. Every number in circulation traces to vendor marketing rather than to a regulator, statistical agency or academic source.
Carousel's intake flows are built to compress the time between application start and a decidable file. See how verification fits your flow
