How Techfin has ensured seamless lending in a contactless world?
The contact-less world is now being adopted at a faster rate not just by individuals but also by many industries as they are exploring newer ways to conduct business. One of the highly impacted industries is Banking and Financial industries where today lenders are looking at ways to disburse loans quickly and efficiently. Writes Sandeep Anandampillai, Co-Founder & CPO, Crediwatch.
COVID 19 has changed our lives in ways more than we could have ever imagined and has propelled us to make remarkable strides in marching towards a contactless world. Thanks to innovative technology solutions, today we can go about carrying on with our daily chores be it groceries, shopping, and even social interactions, online!
The contactless world is now being adopted at a faster rate not just by individuals but also by many industries as they are exploring newer ways to conduct business. One of the highly impacted industries is Banking and Financial industries where today lenders are looking at ways to disburse loans quickly and efficiently.
The top 3 areas where Techfin solutions are helping lenders today –
The traditional way of onboarding customers/borrowers is a cumbersome manual process that requires a lot of in-person interaction right from document gathering, background verification and could take anywhere between 20 - 90 days to onboard. Today, many banks have started exploring digital onboarding solutions that drastically reduce the onboarding time to just a few minutes. An end-to-end digital on-boarding solution today can facilitate instant KYC verification by capturing the photo, an image of PAN card, customer signature, customer’s live geolocation and using AI/ML technologies to validate the accurate Face Match between the ID and the live video. It can also automate the form filling and data procurement/verification by connecting to digital sources of truth.
Automated Credit Underwriting
The pandemic outbreak has also brought in a lot of market uncertainties and underwriting done the traditional way might no more be relevant. Also, manual processes are expensive and have higher turnaround time, something lenders in today’s scenario cannot afford to do. This is where AI systems come into play and empower lenders to identify and track more data points to build an accurate picture of a customer’s financial state. Arguably having more comprehensive information about the customer can help underwriters decide whether or not an applicant is likely to default on loan repayments. For instance, a traditional algorithm used for assessing underwriting pales in comparison to an AI-driven platform that tracks over 2500+ data sources to build such comprehensive credit reports. AI systems are scalable, and with zero-human intervention, one can be assured of no cognitive bias in the decisions made.
Early Warning Signals
One of the biggest challenges lenders are battling with today is NPAs and this is one of the critical areas where technology plays a crucial role. Typically an EWS system tracks about 40 signals to monitor the health of a borrower and shares certain insights/notifications to the lenders. This has never been a holistic approach as it only tracks the financials and finer and inclusive aspects such as funding profile, peer comparison, adverse media sentiments, compliance history, sector-level insights, etc are overlooked. Where automated ML-driven platforms on the other hand can track even 250+ such signals and can scale up to add as many relevant data points as needed for the analysis. What makes it even more attractive is, such monitoring is 24/7 available, customized alerts can be set for various signals and the concerned parties will be duly notified in real-time. This gives much more control and visibility to the lenders who can monitor the loans given out and monitor the default and delinquency rates of those loans eventually over time they would tweak those rules to reduce the amount of underwriting.
In my view, what today’s banking and NBFCs need are data-driven lending systems that equip lenders with actionable information to make the right credit decisions. In a contactless world, all the processes involved in lending will be interconnected, and the entire process from loan origination to monitoring of the repayments will be automated through intelligent systems.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house