4 Pillars of Digital NBFC

October 14, 2022

4 Pillars of Digital NBFC

When you look at today’s customer, they don’t compare different financial service providers anymore, they compare Experiences. Now, Consumers lives are better than ever, with real-time, smart digital services being delivered by smartphone. Booking a taxi, planning holidays, shopping online – It’s all easy, instant and seamless. Today, customers can buy products and services in few clicks and more importantly, unhappy customers can switch service providers in a fraction of seconds.

The digital-first model has changed the lending Industry forever. This approach has changed the way how people consume financial services and helping companies become an active part of a customers’ digital life.

To survive when giants like google make their way into people’s financial lives, NBFC’s must have the right framework in place. This framework is the digital-first platform on Cloud, supported by Four pillars – Omni-channel Lending, modular Lending, smart Lending, Strong Collections management.

Pillar One: Omni-channel Lending

Do you remember the traditional approach with soiled channels (branches, house visits, calling etc)? That approach was neither customer friendly, staff friendly nor efficient. These channels respectively needed their own raft of workflows, content, screen design and other supports, meaning the same functionality is redone many times, with the end results that don’t relate to channels.

It makes sense to do everything at once, and manage all the channels via a central hub.

What’s needed to become a Digital-First NBFC? A central cloud based omni-channel NBFC Software for digital lending to manage interaction across multiple touch points

i.e Website, Mobile Apps, Branch etc.

Over 77% of NBFC consider their current systems as the biggest roadblock to their digital transformation, while over 50% see them as a medium roadblock to capitalizing on digital opportunities.

Pillar Two: Modular Lending

The ola’s and flipkart’s of India introduce clever new features – quickly and at almost zero marginal cost. They are agile enough to exceed customer expectations without any major implementations and cost implications. They easily roll out new services and scale them up or down at will. When it comes to financial service providers, they fail in designing products quickly and launching them.

A modular architecture for NBFC’s will lead to innovation in the same way and in-line with the customer needs. A strong digital lending platform for NBFC’s with advanced rule-engine and Business process management will help make a modular architecture, that empowers lending institutes to go beyond responding to market realities, to quickly create niche products – in conjunction with the consumers.

A strong Technology platform will empower Agile operations , Transparency , Customer- focused design and products.

Pillar Three: Smart Lending

From a normal phone to a smartphone. Tv to a smart Tv, car to Driverless Car (Tesla) etc., Now everything and everyone is smart. Then why not Smart NBFC? The secret to getting everything smart is effective use of Data and building Ecosystem as a business model NBFC’s should do effective segmentation, targeting and tracking by collating data from various source and analysing it to create actionable insights.

Big data is the engine that drives all of these efforts and to make effective use of data, Companies need to invest in new skills – Data Scientists. This will lead to high fixed expenses as the skill is very Costly. To reduce fixed expenses, use a smart lending platform with Analytics to leverage all the data to translate into customers and business insights.

Pillar Four: Strong Collections Management

It is very important for lenders to keep a track of customer location, behaviours and be in regular touch through various channels. Recovery has always been a major problem for lenders and their employees. By deploying a smart collections management software(CMS), NBFC’s can build effective communications with customers by automated email, SMS, telephone reminders, Mobile app with instant payment integrators.

Collections Management System will also help recovery team to reduce NPA’s Automate collections, track ground collections and Geo-Tag Locations.

The end goal is to create more efficient operations, higher profits and happier customers.

NBFC’s are already operating within an entirely new financial ecosystem and they must transform their business models to respond and stay relevant. In doing so, they have four key pillars for success at their disposal – Omni-channel Lending, Modular lending, Smart Lending, and Strong Collections Management.

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