Future-Proofing the NBFC Sector – Building Technology-Integrated Operating Models

COVID-led disruptions impacted NBFCs on all fronts. Not only did their NPAs increase immensely, the credit growth and personal loans also saw a decline in the past annual year with credit growth decelerating from 7.4 to 1.4 percent, and the personal loans declining from 15.0 to 10.2 percent in 2020-21.

While lockdown imposed limitations caused a massive decline in the credit books of financial institutions, the ones that had already transitioned from brick-mortar services to digital operating models did not experience much impact. The use of integrated solutions and practices helped firms reduce processing time, accelerating their customer acquisition on practices on digital channels.

Adopting tech-integrated solutions can bring numerous benefits to your organization. With advanced credit/loan management solutions, you can limit operating expenses, reduce risk profiling, facilitate better resource management, NPA collection, and data governance. If your organization has faced issues due to a lack of technology-integrated digital solutions, it is time you make a full-proof digital transformation.

Below are a few tips on how you can improve your financial services in today’s highly competitive and fast-paced digital world:

1. Establish Partnerships with Leading Fintechs

Customer onboarding, underwriting, credit/loan disbursement, collection, etc., are day-to-day activities for your NBFC for which you need an agile and scalable solution. However, if you are just moving out from traditional data storage systems, developing a well-suited solution can be a hassle. For this, you should find established partners like Damco that have a track record of developing innovative apps for NBFCs. Partnerships with well-established developers and tech leaders will help you develop business-centric solutions that simplify your workflow and address various lending challenges you face with the existing system.

2. Implementing Customizable Solutions

The goals of financial institutions keep changing every quarter which means substantial customization would be required in credit management systems as well. For this, you need to adopt solutions that are scalable and can be customized easily. Before implementing a solution, make sure it is customizable and can be integrated with third-party applications. With a solution like LoansNeo, you can customize the dashboard, components, APIs, and app layouts easily. Not only this Salesforce-powered solution is easy to use, but also includes tools that can help you carry out low-code customizations in much less time when compared to other systems. With easier customization, you can visualize data the way you want on various portals (websites, CRMs, mobile, etc.) and offer varied services to customers based on their interests, giving them an end-to-end digital experience.

3. Leveraging Robotic Process Automation

Traditional loan systems involve manual intervention and human intelligence at various stages, causing delays in loan processing. Automating the entire loan process right from loan origination and underwriting to closing can help you shorten work cycles to a large extent. For instance, with AI and Machine Learning models, you can offer auto-generated/custom interest rates to borrowers based on their past credentials. Apart from shortening work cycles, employing Robotic Process Automation(RPA) helps in reducing manpower, improving customer service, and generating more leads. An ideal example where an organization generated more leads due to automation is DHFL which is said to have generated 20-25 percent more leads with RPA-based solutions in the past year. Similarly, you can use AI bots to engage with customers in real-time. These AI-bots can be used as interactive voice response systems or as first agents on chat turning customer service fast, and interactive.

4. Using an Omni-Channel Approach

Traditionally NBFCs rely on direct sales via agents, phone inquiries, mail inquiries, and leads collected by service teams. Since different teams use different systems and there is no integrated solution in place, it leads to data silos and delayed decision making. So by the time your team gets access to data from another team, the prospect may have reached out to another institution in the area. By using an omnichannel approach in a tech-integrated solution built on Salesforce or another platform, you can facilitate customers in multiple ways. Such solutions will allow you to run campaigns on various platforms (web and mobile), collaborate with digital selling agents, engage customers via emails, messages, calls, posts, etc., as well as in your brick-mortar office.

Are You Ready For Digital Enablement?

NBFCs have shown great credit growth over the years, however, with the changing landscape, they must embrace modern technologies. With so many possibilities in front, the growth and success of your institution depend largely on how well you optimize technologies and resources available. Adopting integrated digital operating solutions will certainly help you optimize resources and processes, better facilitating intuitive and automated decision-making.