5 Reasons Why NBFCs must Embrace Smart Technology Today
NBFC are revolutionizing the economy of India. The NBFCs have huge potential to mould the financing sector. Non Banking Financial companies are financial agencies that deposit and lend funds to the public without a banking license. In the past few years NBFCs have brought a sea change in shaping the financial activities of the Indian economy. These agencies have played a vital role in the growth of the small industries and providing the needed support. The loan market place is a wide palace with unlimited scope of growth. If calculated it is more than a $600 million market and is growing further with the growth rate of 15% to 20%. In order to maintain and enhance this growth it is crucial for the NBFC sector to shift the focus more on fundamentals and reforms.
Different NBFCs have different innovative ideas to pull the clients. They deal with customers in their own way to connect the customer and agency.A client for a loan from NBFC is asked for very few details, which is not in the case of banks. NBFC have to be creative and innovative as well to be in the race of loans provided to the business owners. Along with technology the NBFC sector can bloom and can capture much more share of the market with ease. With the more focus on the technology these agencies can introduce Fin tech, E-KYC, cashless transactions and bring more digitalization to the process of advancing loans or accepting payments. All these innovative and technological ideas will ensure that the economy is striving to be a cashless System.
- NBFCs have already captured a quite good share of the market and are playing a significant role in meeting the financial needs of the individuals and the business sector. In the past recent years the NFBCs have shown a rigorous growth from 21% to 44% where on the other hand banks loan activities fell from 49% to 28%. As per a report by India’s apex bank Reserve Bank of India (RBI) showed that in the year 2017, NBFCs and housing finance companies met 18 % of total loan requirements. The report says that NBFCs extended credit worth Rs 2.59 lakh crore to commercial enterprises in the year.
- If we look down to the market type it is diverse and widespread reaching till the roots of rural India is not an easy task and needs comprehensive techniques to introduce the role of NBFCs in India. In today's technological world NBFCs should adopt more flexible methods like cloud computing and artificial intelligence. These creative and attractive approaches will enable the NBFCs to deal with the customer more effectively. On the other hand there are some agencies who already are in the race with technological support to be ahead of others. Some NBFCs have adopted automated systems to ease the loan underwriting process to increase the transparency of the process. The loan process has become more quick and effortless.
- The traditional process of NBFCs was a lengthy process and consumed a lot of time. That conventional process was dependent on the human efforts and their intelligence. But now the players of the loanmarket have shifted their focus in digitalizing the whole process. They have enabled the KYC through aadhaar and its biometric verification through the digital process. Along with many NBFCs have launched their mobile apps to make it easy for the individuals with low income to apply for the loan. It has now become quite easy to avail the loan because of the revolution in the mobile and technology.
- It is obvious that NFBCs have to be more and more inclined towards digitalization. Managers with the aid of technological support can focus on other business requirements rather than passing loans all day. Technological advancement will cut down the cost of manual tasks and leg oriented activities. It will also embrace greater accessibility to customers and will provide efficiency in credit quality. The digital support is given to the NBFCs by the technological giants which ensure credit decisioning, digital workflows, enhanced early warning and digital collections processes, and even product innovations.
- NBFC should embrace the technology for more accuracy and transparency in the loaning process. A technological support will not only calculate late penalties but will also provide information about the due installments and their interest charges on loans. A fully automated system will do the task of end to end loan management effortlessly.
What Enhancement of Technology in NBFCs will Benefit to
Apart from providing transparency and clarity to the loaning process the Technological Advancement will reduce the human intervention in the whole process. It will be a paperless oriented process. The E -KYC will allow the business owners to take loans without any hassle. All of the data of the customers will be stored in a protected cloud storage which will make the process more systematized. The option of tracking the loan defaulters will provide much necessary support to the NBFCs. Enhancing technology will enable optimization of work force and work flows.
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