4 Pillars of Digital NBFC – In this digital era of technological advancements, Non-Banking Financial Companies (NBFCs) are evolving in terms of financial growth of the ecosystem as a pillar of the economy and helping people fulfill their financial demands. Everything is available online, and people have started to use digital ways of using services such as booking flights, hotels, and trains; ordering items at the doorsteps online; or getting a subscription to the service, etc., making everything instant, easy, and seamless. Every service is available just one click away. The time has come when one can switch between various services if not satisfied in a moment, whether it’s food delivery or financial lending. Customers now have a variety of choices to go with, unlike previous traditional times of staying with one service partner or provider.4 Pillars of Digital NBFC

The old-school method of visiting a specific place to get any service is gone; the customer’s digital life upholds more value, and companies have become the new lending partners for providing the services to the customer. The smartphone has become the new and smart solution for every need of an individual, plus the various services provided by it. 

The whole system is supported by the four pillars of the digital framework, which are:

  • Omnichannel Lending;
  • Modular Lending;
  • Smart Lending;
  • Strong Collections Management.

Every day is a new beginning for the advancements nowadays. The 4 Pillars of Digital NBFC are as follows:

Pillar One: Omni-channel Lending

Omni-channel lending is defined as a medium that combines and integrates various channels.

Such as online platforms, branches, mobile apps, and call centers for enhancing consistent and seamless lending experiences through the preferred channels of the customer to start, manage, and track till the finishing of their loan applications without any interruption. In simpler words, the workflow and functionality are enhanced by managing the channels in a central hub. The older traditional method of interacting with customers in separate channels was not effective, and the process was neither lending partner friendly nor efficient at all. In the customer’s mind there is no difference between various channels. A Customer sees the lender is one entity. In the evening, the customer may prefer a web portal, in the morning, he may prefer the mobile app on the go. Technology should offer a unified experience to the customer, no matter what channel he chooses at that point of time.

It has:

  • Increased efficiency;
  • Personalized services;
  • Seamless customer experience;
  • Regulatory compliance.

Pillar Two: Modular Lending

Modular lending has a set of protocols designed to encourage modern innovation and build user-centric products with flexibility and adaptability. Modular architecture leads to innovation for the customer needs and working hand in hand. This helps in improving lending partners to go beyond, as per the actual realities of the market and create niche products quickly. New products can be introduced with features and functionalities while maintaining cost-effectiveness. 

The key factors for the products with it are:

  • Agile operations;
  • Transparency;
  • Custom products.

Pillar Three: Smart Lending

We are surrounded by smart things. Smartphones, smart TVs, AI-based interactions with new vehicles, etc. Then why not smart NBFC? The tracking, targeting, and effective segmentation help in analysis and creating actionable insights for effective and smart use of data and building such an environment. Smart and advanced technologies like artificial intelligence, machine learning, robotic advice, and chatbots help automate the overall process, and financial institutes can gather actionable and meaningful information while personalizing solutions for enhancing consumer values along with business insights.

It has:

  • AI-generated alerts when there is potential distress in a customer’s credit;
  • Altering alerts into workflow-enabled risk-rescuing actions;
  • Monitoring and analysis of evidence packages generated by AI for increased likelihood of breakdown of risk drivers by default.

Pillar Four: Strong Collections Management

Strong collections management is a key pillar for Non-Banking Financial Companies (NBFCs) to help increase profits, improve their operations, and better customer happiness and experience for satisfaction. Lending partners need to know the behavior of their customers and their location and stay in regular touch through various mediums. Recovery has always been a challenge for lending companies; this can be eliminated by the deployment of smart CMS (Collections Management Software), which provides the facility of effective communication via telephone reminders, automated emails, SMS, and mobile apps with instant payment options for easier coordination.

This includes:

  • Collections management software (CMS)
  • Field force management software
  • Collection process outsourcing
  • Real-time data updates
  • Automated case allocation
  • Automated calling and follow-up lists

Verdict

The exact aim of the digital NBFC 4 pillars is to create happier customers through efficient operations and higher profits. It has been seen that financial services are slower to move from offline channels to digital mediums and engage more easily with customers. There is a slight gap in significant access to information for a personalized experience and the ability to access the services in real-time.