Lend Fast, Lend More

Around the world, lending has seen a vast change, right from leveraging technology, to the types of credit products and India has as expected been a fast follower. As Indians get used to shopping and transacting online, they seek credit too digitally. Per the RBI’s annual report, mobile banking volume grew 92% (2017-2018) and with the Digital India push, this is going to only increase further.

Mobile led and with a rich digital footprint, the 300M+ millennials and Gen Z are influencing the lending landscape. While being privacy focused, they seek instant gratification and don’t see EMI as a loan but as a means to acquire products and experiences. They don’t want to wait or follow a cumbersome process and want a loan where they are, in minutes. With ~10K lending institutions (including 300+ fintechs) all lending at almost par rates adjusted for credit risk profiles, the customer experience plays a larger role.

In a competitive and continuously changing credit environment, quicker and problem free disbursal with a good customer experience while managing credit risks is a challenge for lenders. Relying on paper based on-boarding processes and manual risk processes not only impacts operational costs but also risk and quality.

A decisioning platform, can help improve a financial institutions performance and profits by

1.      Removing paper from the process, saving time and effort required to manually fill and move forms and files across units thus improving accuracy, reducing error and processing time, along with providing centralized record keeping for regulatory, audit, reporting and analytics purposes.

2.      Improving management visibility and optimizing operational processes by providing metrics and dashboards which help in identifying bottlenecks and risk areas. For e.g. TransUnion’s Acquisition Manager records the full context of the application at each queue in the workflow, allowing financial institutions to compute turnaround times (TAT) and straight through processing (STP) rates at each stage helping them identify processes and areas which take the most time and require manual intervention.

3.      Enabling faster and automated loan decisions using a variety of credit and non-credit data that feeds into a rules manager. A good decisioning platform will allow business users to create their own rules and credit and verification polices in a low-code, no-code environment. Using DecisionEdgeTM Program Studio, risk, credit and fraud prevention teams of financial institutions have been able to create and host rules, scorecards and entire policies without requiring core technical skills and the champion-challenger module allows them to quickly change, test and deploy revised policies enabling quicker go to market with changes.

A well designed process, supported by the right technology and analytics will not only help financial institutions lend faster and lend more while managing risk but also improve performance and reduce costs without sacrificing on customer experience. The ability to quickly turn insights into targeted and actionable outcomes across the lending lifecycle is going to determine who survives and who doesn’t.