• February 14, 2022
  • Seo Team
  • 0

Since the last few years, providing affordable banking services accessible to everyone globally has been a buzzword. Providers of technology-based financial services have impelled innovation to make day-to-day financial operations accessible to almost everyone, especially those who never had access to banking facilities before. 

With the advancement in technology, the opportunity for existing and new lenders has been generated to transform traditional lending models through efficient operations, leaner processes, and risk management. The NBFC sector that has experienced a significant transformation over the past few years is now being recognized as an important component of the financial system.

In fact non-banking financial companies (NBFCs) have outperformed banks in the new credit deployment by leveraging technology to reach the underserved segments. To sustainably grow and operate effectively in a competitive lending marketplace, NBFC’s should select the right segmentation strategy and identify opportunities expected to generate success. Setting up a robust technology platform enables NBFC lenders to grow rapidly through optimal utilization of resources and scalable operating models.

Fintechs have gained eminence for providing favorable opportunities besides enhancing the competencies of a lender. Consequently, NBFCs are leveraging the capabilities of Fintech partners to overcome issues and challenges involved in distribution, risk management, underwriting, and more, while providing access to financially excluded customers. By partnering with Fintech players, NBFC’s can help lenders improve their capabilities while driving competitive advantage in a crowded marketplace:

New Product Offerings: By partnering with Fintechs, NBFCs are introducing innovative product offerings such as POS financing, consumer durable, invoice financing, payday loans, etc., by leveraging tools to access earlier unavailable data and form real-time underwriting models.

Improved Distribution: The competencies offered by Fintechs have empowered lenders to re-look their existing processes and replace manual processes with digital and paperless processes. Digital enablement of onboarding and verifications has reduced the customer acquisition cost and enabled NBFC lenders to extend their reach to geographies previously considered unrealistic.

Widening of Customer Database: Besides enhancing the distribution reach, Fintech platforms are leveraged by lenders to source and scrutinize customer data from applications enabled by the internet. By integrating predictive modeling and the insights offered by Fintech platforms, lenders can provide personalized offers to increase the likelihood of lead conversion.

Greater Operational Efficiency: From secured loan applications provided on mobile devices to P2P (on-tap) payments, the finance landscape around internal productivity and exterior simplicity has been changed by Fintechs. This has enabled lenders to look beyond the cost benefits offered by digital technologies to refurbish their operational back-office entirely. This has led to efficient delivery and product development with low operating costs and augmented productivity.

Superior Customer Experience: Superior customer experience is one of the key reasons why NBFC’s have started depending on the expertise of Fintech companies. Traditional lenders should consider rethinking their customer experience to provide an omnichannel and user-friendly collaboration.

The Bottom Line:

NBFCs are playing a critical role in promoting ‘Financial Inclusion’ within the country. However, to operate in a competitive landscape, NBFC’s should consider partnering with reliable Fintech partners to overcome the issues and challenges of a traditional lending system.

Leave a Reply

Your email address will not be published. Required fields are marked *