Changing role of automation in NBFC


Written by: Ladislav Simicek, CIO, Home Credit India

Technology is no longer a luxury at the disposal of few. It has now been weaved into every walk of our lives to become a necessity across businesses. Bolstering its percolation has been digitization moves by the government through steps like Jan Dhan Yojana, Aadhaar and the emergence of United Payment Interface (UPI). This development has simultaneously given thrust to NBFC players to deploy advanced automation technologies to streamline organization processes. It has strategically embarked India’s NBFC sector on the path of enhanced productivity, cost-saving, and improvement in customer experience.

The process optimization efforts made through automation are also helping NBFCs establish greater customer connections. In the face of stricter regulations that have increased the cost of borrowing, automation is helping NBFCs narrow their target group and enable judicious resource allocation for niche markets and personalized products and services. The aim is to adapt to changing market landscapes and remain competitive.

In order to leverage partnership ecosystems across the value chain of lead generation, client onboarding, underwriting, credit/loan disbursement, and collection, new-age NBFCs are employing innovative technologies more than ever. Process automation is granting operational agility at a never seen before pace. Lenders can assess individual consumer insights and create alternative credit rating models using artificial intelligence (AI), machine learning (ML), and big data.

Some of the news roles being taken by automation in NBFCs are as follows:

  • Personalizing the customer experience has always been at the core of NBFCs to maintain a competitive edge. Automation is helping them to take the commitment further by debunking the ‘one size fits all’ approach to evaluating customers with a single credit policy. Technology is creating a personalized approach towards credit assessment of potential and existing customers to create a curated experience for them. This is inadvertently helping NBFCs broaden their customer base through smart market segmentation.
  • Monetizing data is another key element to survive disruption for NBFCs. Collected data when provided to analytics tools can reflect insights on consumption patterns. This, when mapped into smart technology, works as assistants to human supervisors for faster and accurate decision making and quicker implementation of systems to drive better profit output for NBFCs.
  • Cyber security and identity protection have always been challenging factors for NBFCs among rising concerns about the increasing frequency and sophistication of cyberattacks. However, smart technology is letting these concerns rest and increasing the trust and confidence of customers in using automated systems over manual ones.
    Chatbots and Robo-Advisors have become new avatars of ease of doing business in the NBFC sector. They became particularly important in knowing the masses’ preference as well as automating mundane rule book tasks. Several NBFCs these days are employing chatbots and robo-advisors for interactions with prospects and customers for self-on-boarding of the customer, customer servicing and employee-related services.
  • Bolstering digital footprints by biometrics, Aadhaar based KYC is taking digitization to the grassroots in India. The recent push by Indian Prime Minister Narendra Modi towards promoting initiatives such as Jan Dhan Yojana, Aadhaar and the emergence of UPI provided a good foundation for many NBFC players who can now reach out to prospective demands across the country. This became really beneficial for the continuation of business during the pandemic in the midst of mobility restrictions, reduced manpower and disrupted value chains.Conclusion
    The changing role of process automation in NBFCs is creating a unique synergy at the cross-section of technology and human interface. With a quicker turnaround in decision making, amplification of process efforts and targeted reach outs, automation is breathing new life into the NBFC sector. This is resulting in faster process standardization, increased efficiency, and streamlining in processes to provide unbiased services to all. It is facilitating ‘last mile’ touchpoints and promoting the idea of financial inclusion throughout the country. Considering the futuristic technologies driving NBFCs growth, and gaining further currency across the country’s financial ecosystem, the sector is headed towards a refreshing phase. A significant phase where automation goes beyond merely reducing dependency on manual tasks.


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