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What NBFCs are Getting Right About India’s Digital Future

By Bhavesh Mehta - Jan 16,2020
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What NBFCs are getting right about India’s digital future

NBFCs are quickly adopting best-in-class technology to bring about disruption and foster future growth. The Indian lending industry, significantly the non-banking financial companies (NBFCs), are increasingly relying on technology to reach and service a larger customer base.

The technology-centric business model of the NBFCs (e.g. Bajaj Finance ltd), rests on cutting down on manual tasks and leg-work oriented practices to move towards automated loan application processes. This has led to greater accessibility, cost-effectiveness, efficiencies in credit quality and turn-around time over the traditional lending models of banks. Thanks to a digital platform like Finserv MARKETS, a traditional process that seemed a cumbersome process not too long ago, that is to apply for a loan online, is today a real, thriving possibility.

Due to its digital advantages, the platform offers convenience, transparency and a variety of other benefits across all of its loan types. For instance, the Bajaj Finserv Personal Loan found on Finserv MARKETS, offers personal loans of up to Rs. 25 lakh almost instantly, with an instant loan approval period of just three minutes. Finserv MARKETS also offers a host of business loan options, whereby you are almost always guaranteed to receive the amount in your bank within a mere 24 hours. Apart from these, the platform also offers Home Loan of up to 3.5 crore, Loan Against Property of up to Rs. 1 crore and Professional loan of up to Rs. 30 lakhs.

Another interesting feature of a digital lending platform like Finserv MARKETS is that it incorporates digital tools like the eligibility calculator that helps individuals determine their eligibility before applying for Bajaj Finserv home loans, personal loans and business loans. In a similar vein, Finserv MARKETS has also incorporated an effective EMI calculator to help potential borrowers determine their ideal EMI amounts and loan tenure even before they apply for say, the Bajaj Finserv Business Loan or opt to get a Home Loan Balance Transfer on the platform.

Disrupting the norm

The conventional business of loan giving and loan application usually followed a tedious and lengthy process with the requirement of manual intervention and human intelligence at various stages. Indian lenders, both banks and NBFCs, are waking up to the need of end-to-end digitization of the loan application process.

The new-generation NBFCs are increasingly using technology right at the first leg of loan initiation and customer onboarding. India stack has enabled Aadhaar data to be used for e-KYC or digital verification of customer as well as using the digital data of customers for credit appraisal and product design. Finserv MARKETS is such an example of digital loan origination and an end-to-end fulfilment of loan agreements.

The Artificial Intelligence (AI) of Finserv MARKETS allows the lender to get unique customer insights during the loan application process. It is also being used for credit underwriting fraud detection and loan disbursements to new customer segments.

Moreover, because Finserv MARKETS is easily accessible even on mobiles and smartphones, it has enabled front-end connectivity with customers with low-incomes and no or little education. It has empowered customers to use their device to apply for a loan, check their loan status, complete e-verification, and sign off digital documents for disbursements.

With a digital lending partner platform like Finserv MARKETS, the middleware has been automated, which has made the loan application process also extremely quick, secure, more efficient and transparent. As a result, the platform is incredibly simple, quick and easy to use.

Tech all the way

The future of NBFCs lies in having originate-to-distribute (OTD) business models with a fully integrated back-end, middleware and front-end. This would ensure that the entire lending stack is technology-driven. This doesn’t simply end at automating the loan disbursal process, but adopting solutions that would enable the companies to quickly react to business events, market and customer demands. They also need to have a robust technology platform that can be quickly adapted and scaled up to offer dynamic credit products.

Some of the NBFCs are already on the job and are digitizing the entire stack by taking a holistic approach to technology adoption. The entire digital stack is powered by global technology giants that ensure automation of processes, instant loan approval, speedy credit disbursal, digital workflows, enhanced early warning and digital collections processes. It also powers product innovation, all at a minimal turnaround time. Both NBFCs and banks will rely on big data analytics, algorithms and artificial intelligence for credit analysis and lending decisions to lend to underserved markets without enhancing the risks. Social media conversations on Facebook, Twitter and WhatsApp have been used by companies and lenders for garnering customer feedback but now, technology has enabled lenders to sift through social media conversations for analyzing risks before making their lending decisions. The analysis of social media conversations helps financial institutions like Bajaj Finserv disburse loans in a matter of seconds on the Finserv MARKETS website.

Adopting technological innovations at all stages of the lending stack has enabled NBFCs to optimize their workforce and workflows, enhance turnaround time, enable educated and smarter decision-making and ensure the availability of credit for new customer segments at the best possible rates. Most importantly, consumers are also demanding change. Technology has become hygiene, and one has no choice but to adapt to stay relevant in the game

Large NBFCs have strict deadlines, but smaller NBFCs, especially Fintech startups have a bigger problem at hand–an identity crisis! The business models of startups like Bank Bazaar mandate that they do not become an NBFC, while the nature of operations of startups like LendingKart makes them an NBFC due to legal compliance issues.

Digital Marketplace like Finserv MARKETS is perfectly placed to serve the digital needs of both manufacturers and consumers. It has evolved from being a provider of bike loans and travel loans to selling insurance and even electronics on the platform.

On the lender’s side, rather than having key executives involved in assessing creditworthiness and risk involved in loan application, the technology at Finserv MARKETS has enabled these managers to be able to focus on attending to more pressing business needs. Hence, the platform is truly a win-win for everyone involved in the loan lending and loan application process.

Moreover, the platform has also recently launched its mobile application – the Finserv MARKETS app, that aims to make this process even more convenient and digital-friendly. It serves as an effective bridge for transparency, trust and adoption of digital practices across different categories of products, making it superior to other market players in the same domain. The Finserv MARKETS App incorporates the Unified Payments Interface (UPI) platform, with the use of which users can make payments to merchants as well as handle, request and send money to friends and family instantly. Apart from providing its reliable loan products such as the Bajaj Finserv Home Loan, the app also provides insurance products, investment options, shopping deals and even insights into one’s CIBIL report.

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522