Edition 2: The Digitalization Advantage for NBFCs

Dear Readers,

Welcome back to Navigating Digital Frontiers! In our inaugural edition, we explored the transformative power of digital lending, diving into India’s digital evolution from the JAM Trinity to UPI and the emergence of Unified Lending Interface (ULI). These innovations have redefined financial access and consumer engagement, setting the stage for NBFCs to unlock new growth opportunities.

Building on those insights, this edition takes a closer look at a pivotal theme: how digitalization transforms cost management into a driver of value creation for NBFCs.

Recently, I had the privilege of participating in the 18th Elets NBFC100 Tech Summit, where I joined an esteemed panel to discuss:

"Transforming Costs into Value: The Digitalization Advantage in NBFCs."

This enriching discussion was moderated by Ajit K Menon , Group COO of Vivriti Capital and featured insights from:

• Ashwin Sekar , Chief Product & Technology Officer, InCred Financial Services
• Aabhinna Suresh Khare , Chief Digital & Marketing Officer, Bajaj Capital Ltd
• Ayaskant Mohapatra , CIO, BOBCARD
• Avirup Chatterjee , Associate Director, Business Analytics, Piramal Capital & Housing Finance Limited
• Ankit Jain , Chief Revenue Officer, OneXtel
• Prashanth KR , Commercial Business Head for Tablets, Lenovo India

Spotlight on Digital Collections

“Cost of collections (COC) can be drastically reduced when digital tools are strategically deployed to nurture and guide customers from day one.” – Sameer Gupta

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During my address at the summit, I shared how NBFCs can unlock significant value by:

1. Digital-First Customer Nurturing: Establishing a connection from the first interaction, embedding financial literacy, and providing tailored nudges to create lasting relationships.
2. Optimizing Communication Channels: Using data analytics to determine the best time, channel, and frequency for customer engagement ensures efficiency without overburdening operational teams.
3. Leveraging the Right Tool Mix: Advanced technology solutions enable seamless customer engagement while significantly reducing the cost of collections.

Insights from the Panel

The discussion with my co-panelists brought forward powerful trends and actionable strategies shaping the NBFC sector:

• Early Detection and Predictive Modeling: Advanced analytics and refined risk management are key to reducing fraud and ensuring sustainable growth.
• From Cost Centers to Value Multipliers: Digital transformation automates processes like onboarding and credit analysis, turning them into value-driven touchpoints.
• AI-Powered Personalization: Machine learning enables tailored repayment plans, reducing delinquencies and enhancing portfolio performance.
• Frictionless Digital Journeys: Over 75% of customers prefer fully digital onboarding. E-KYC integration has reduced onboarding costs by 70% while improving CX and lowering drop-offs.
• Intelligent Cost Management: Predictive analytics helps NBFCs save up to 15% on operational costs while preempting fraud risks worth millions.

Digitalization as a Strategic Investment

Digital transformation is no longer a luxury—it’s a necessity. For NBFCs, it’s not just about managing costs but creating scalable value, enhancing customer experiences, and staying competitive.

Historically, cost management was about controlling expenses. Today, digitalization is shifting this narrative, positioning costs as investments in long-term growth and customer satisfaction.

Through automation, AI, and real-time analytics, NBFCs can:

• Boost profitability.
• Enhance customer loyalty with hyper-personalized solutions.
• Future-proof operations in an evolving financial landscape.

Your Digital Toolbox: Actionable Strategies

1. Nurture from Day One: Embed customer-centric nudges into every interaction to reduce COC and improve retention.
2. Leverage Predictive Analytics: Use AI to anticipate repayment behaviors and enable proactive outreach.
3. Optimize Channels: Ensure messages reach customers via the right medium at the right time to enhance engagement.

These strategies are not aspirational—they’re actionable and proven to deliver results.

Future-Ready NBFCs: A Vision for the Next Era

The next frontier of transformation will focus on:

1. End-to-End Digitalization: Seamless customer journeys from onboarding to servicing on unified platforms.
2. Real-Time Engagement: AI-driven systems that anticipate and address customer needs proactively.
3. Integration with Emerging Platforms: Open ecosystems like account aggregators, ONDC etc. to deliver value-added services.
4. Continuous Adaptation: Embracing transformation as an ongoing journey rather than a one-time upgrade.

Looking Ahead

Digital transformation is a powerful growth enabler, helping NBFCs shift from being traditional financial intermediaries to technology-driven organizations centered on customer value.

The Elets NBFC100 Tech Summit reinforced this, and I’m grateful to Dr. Ravi Gupta for curating such an impactful platform and Team Elets for managing the flawless execution end to end Saumya Chauhan Harpreet Singh My heartfelt thanks to my fellow panelists for their thought-provoking insights.

As we continue this journey, the question is not whether to embrace digitalization but how effectively it can be leveraged to unlock sustainable growth and innovation.

Explore More

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Join the Conversation

What’s your take on digitalization’s impact on NBFCs? How do you see cost-value dynamics evolving in this space? ?? Share your thoughts and don’t forget to subscribe for the latest insights in #DigitalTransformation.

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