Unlike banks, NBFCs don’t usually have large distribution networks. Many of their new business depends on third-party agencies and direct selling agents (DSAs). DSAs help lending companies reach out to the customers in tier II and III cities where branch office/financing companies are not present. However, most processes (including customer acquisition and loan recovery) are operation-heavy and involve multiple interactions between agents and customers.
A recent study by Accenture reveals that through strategic digital transformation, NBFCs can increase loan volumes and reduce operational costs by 20%. Direct sales through online channels, increasing operational efficiencies, and delivering a seamless customer experience are at the core of digital lending. Optimizing sales cycles, Sales in NBFCs are highly dependent on third-party agencies and DSAs, who might not possess a comprehensive knowledge of products and offerings. For instance, DHFL (Dewan Housing Finance Limited) relied completely on DSAs for leads. When they started deploying RPA-based technologies, they could generate internally 20-25% of charges.
Lending industry-specific CRMs are crucial for digital lending platforms. These are especially beneficial for disbursing loans faster while managing operations like sales, call centres, field sales, and collections. While going digital, customer segmentation remains a pressing challenge for NBFCs in India. Leveraging Analytical tools for customer segmentation and defining segment-specific sales strategies can lead to better conversion rates. Also, supervisors can quickly reform existing approaches with a real-time view of the sales pipeline. While the adoption of digital has accelerated, it cannot eliminate field agents and DSAs from the value chain. But there is a need to augment agents’ knowledge of the company policies, products, and offerings in the simplest way possible. This is possible by making relevant information accessible whenever required. A cloud-based information repository can help field agents get the knowledge on the go. It is possible to reduce sales turnaround time with mobility solutions. Executives can capture/process documents and customer information more efficiently, and in most cases, loan applications can be filed and approved during the first interaction.
Loan Applications
Many preliminary processes can be made online through self-service portals, like checking eligibility for loans and custom loan requirements. Online portals for document collection, queries, and clarification can free the NBFC workforce from sophisticated tasks.
Customer onboarding
Digital verification for customer identity (for example, Video KYC and CIBIL score validation) can reduce customer onboarding time to a great extent and speed up the entire lending process.
Underwriting
Leveraging AI and Machine Learning models, NBFCs can underwrite loans based on segment, geography, and product. FinTech players are already investing in automated underwriting models based on customer data.
Loan disbursements
It is possible to disburse loans instantly into the customer’s account through digitized verification and validation. Micro-lending FinTech companies shell out loans within three days of the loan application. Whereas NBFCs typically require 4-6 days for the same. Thus, digitization and efficient use of technology can ramp up NBFC loan disbursal time.
Customer relationship
The lending journey entails several interactions, which can automate through self-serve portals. For example, customers can help themselves with post-disbursal documentation, new loan application, applying for an extension, and early clearance of loans.
The relationship between the lender and borrower never terminates, even after the loan has recovered. Existing customers present an immense opportunity to cross-sell. Intelligent digital systems can keep track of customers and their ventures and accordingly nudge them for relevant products/offerings.
