Tech Giants Are Coming To Hunt You Down, NBFCs. Be Prepared.
If the pond is the business world, and the Shark is, let's say, a tech giant like Amazon, Google, or even big Indian players like Paytm, they not only survive in the pond, they disrupt it! For eg, Amazon, that started as an online bookstore has swiftly dominated eCommerce and is a key global player in the video streaming industry, brick and mortar stores, cloud computing, digital payments, cloud kitchens, music, electronics, healthcare; and the list is only to grow in the coming decade.
How far could the lending business be for these companies? Turns out, many are already silently operating in the space. Did you know that since 2011 Amazon is providing commercial loans to Amazon marketplace merchants via its Amazon lending arm? In between 2011-2017, Amazon lending arm has issued approximately $3 billion worth of commercial loans in the US, UK, and Japan. It wasn't just seizing the opportunity during the 2008 Global recession, when banks had cold feet issuing loans to small businesses, that Amazon stepped in. Amazon's interest in the finance world is quite evident from its digital payments, credit cards, business checking, and various other finance-related ventures. Indian companies are not lagging behind too. Paytm has already announced its venture as a "small finance bank if the regulators permit".
It wouldn't be bold to say that in the coming times, these digital companies would serve everything that a bank could, albeit with enhanced speed and efficiency. The ROI for them on the small ticket size loans is multiple times of what a traditional bank generates on them. With their enormous network of third-party merchants, tech expertise, and of course limitless resources, it is only a matter of time before these global players sizzle the economies of developing nations that are the breeding ground of small businesses; India, likely to be its primary target.
From the periphery, they hands-down seem to take away the cake. However, regional NBFCs and microfinance companies do have an upper-hand upon them with its regional influence. Though, at AllCloud, we are concerned about how long can this influence compete with the convenience, speed, and services offered by these companies? The situation is peracute and demands acute transformations to make your companies capable to compete with the likes of Amazon.
With our years of experience of working with the NBFCs and micro-lending companies, we've laid down a few ideas to get you thinking on how can you beat these predators at their own game!
Amazon has a no-nonsense business approach - put the customer first. If you want to compete with the global giants, think about how you can make your company culture, leadership, products, and service obsessed about only one goal - to satisfy the customers.
Value your customer's time. Paytm issues micro-credit in just one click to customers through â€œPaytm Postpaidâ€. Think about what technology can you implement to enhance the pace of your business. The goal is to issue loans in minimal time and with maximum security. The future of lending is to make the experience of borrowing a loan close to the simplicity of buying on an eCommerce store.Â
Note- Auto Cloud, our pioneer lending software enables the NBFCs and micro-lending companies to issue loans in less than 10 minutes! Check it out here.
Do not abandon the ground, literally
There is no escapism from making your business digital, and relying on technology to successfully sail your business boat. Technology will make your company more efficient. However, a physical office gives you a psychic edge over digital-only companies. The customer is likely to be assured that he has a place to walk into in case of queries. It gives you the credibility and builds trust, both of which are of prime importance in the financial business in India. Global players such as Amazon too has realized the fact and has stepped into the retail world with brick and mortar stores. Use technology for your entire business operations, but we recommend to let the customer have a physical experience and relationship with your company.
The reason why these companies can disrupt any industry with ease is because of its optimal utilization of consumer data. Digitize your documentation, and with the help of AI, study and analyse your customer behaviour and their digital footprints to make better-informed decisions and fact-backed interpretations.
Instead of getting into a fistfight with these global players, step back to learn from the giants how they became one! If you see, most of them started out humbly like us. They are doing something right that has made them dominate, and influence consumers mind. There's a lot that we can learn from them and adapt to our business. Nobody can, and should stop them from knocking the doors of the Indian lending industry. Healthy competition is welcome, and instead compels us to put our best forward. However, let's be ready with our shields to give a tough fight, and keep it at bay!