The use of technology has permeated every aspect of human life as our dependency on tech products for quick resolution is constantly increasing. Rapid digitalization across industries over the past two to three years has changed the fundamentals of how firms run, especially after the pandemic. By providing a seamless omnichannel experience to customers, brands have gotten on the trend of investing in automation and implementing RPA. And the financial services industry has always been one of the fastest adopters of evolving tech trends.
With NBFCs turning all payment trends in their favor, there is an infinite scope of automation and RPA to explore!
The Tech-Driven Future of NBFCs – Processes Automated
As part of the digital workforce, IA, RPA, and AI assist in duplicating tasks done by the human workforce in order to minimize or completely eliminate human intervention. This automation is typically used in tasks that are essential but tedious, repetitive, and labor-intensive.
These technologies are broadly applicable to a variety of procedures, including eKYC, payments, repayments, and regulatory reporting, among others. Customers would be able to self-service themselves 24 hours a day, seven days a week, and perform a variety of other tasks with ease, thanks to the help of virtual agents and chatbots.
Credit Decision Making
Lending institutions utilize technology to boost operational effectiveness, deliver quicker services, and enhance the entire customer journey. A bigger diaspora of the Indian population across geographies has been able to get timely credit. Thanks to non-banking financial companies (NBFCs), financial transactions are now much easier, and credit approvals are more seamless. Banks’ credit to NBFCs increased 30.6% year on year to a whopping Rs 11.7 lakh crore in September 2022, mainly due to a favorable base effect, confirms RBI data. This is strong evidence of the huge potential that NBFCs carry, as it is nearly double the overall credit growth in the system.
The internal process that NBFCs use to research and validate loan applications before deciding on credit risk is known as the credit decision process, and it is essential to how these institutions conduct business. When RPA is used in the loan origination system, procedures like KYC validation, conversion, and verification become more streamlined, which concludes the applicant’s entire credit assessment.
Managing Analytics and Dashboard
Bad loan risk, a lack of trustworthy risk scoring techniques, and a lack of visibility into loan performance data, among other issues, are obstacles that NBFCs must deal with. When it comes to portfolio state, loan application status, turnaround time, application aging, salespeople performance, funding, exposure, collections, and other topics, the client leadership may occasionally lack timely information.
In such a case, a technology-driven approach to verify the creditworthiness of the customer is required. Organizations can benefit from insights into the portfolio of loan applications, funding and exposure factors, customer insights, risks, loan performance, and more. Better asset management is made possible by the system, which also allows for the early detection of defaulters through trend analysis. Based on analytics forecasts and proactive consumer connections, NBFCs will be able to increase client repayment rates.
Chatbots and AI assistance
In the NBFC industry, chatbots and robo-advisors have emerged as new representations of ease of doing business. They became especially crucial in determining the preferences of the general public and automating routine chores outlined in the rule book. The best example of this is Paytm online recharge chatbot, which handles phone bills, electricity bills, water bills and more by sending a few messages.
In order to communicate with prospects and customers for self-onboarding of the customer, customer servicing, and employee-related activities, many NBFCs now use chatbots and robo-advisors. In India, Aadhaar-based KYC is bringing digitization to the masses by supporting digital footprints with biometrics. Numerous NBFC firms now have a solid basis thanks to Indian Prime Minister Narendra Modi’s recent drive to promote programs like the Jan Dhan Yojana, Aadhaar, and the advent of UPI.
As a result, they can now cater to potential demands across the nation. This turned out to be incredibly helpful for keeping things running during the pandemic despite movement constraints, a reduction in staff, and disrupted value chains.
Customer Segmentation and Client Behaviour
Platforms using a Software as a Service (SaaS) paradigm lowers the upfront investment expenses for hardware and infrastructure, enabling dynamic scaling. NBFCs should use customer segmentation and personalization to increase sell-through. Any marketing campaign’s outcome depends on how well the audience is segmented. They use customer segmentation to obtain knowledge on how to choose particular offerings, enhance customer service, comprehend client behavior, and more.
NBFCs can unlock the power of artificial intelligence and maximize revenues based on a plethora of parameters. Today’s customers have extremely high expectations! They must now carefully monitor their customers’ specific wants and preferences in order to provide them with goods and services that are appropriate.
NBFCs today, more than ever, need to understand their customers. It’s crucial to derive insights from the enormous terabytes of data that they have stored in order to provide top-notch customer service. Ingestion of data does occur in these institutions so easily. The inability of NBFCs to collect real-time data from clients at various checkpoints leads to inefficient selling, which prevents any advice provided to customers from being implemented as intended.
Benefits of RPA for the NBFCs
The ideal Robotic Process Automation solution would be flexible and reduce risks by empowering systems to accommodate change and handle complexity.
Reviewing existing procedures:
Financial institutions can program RPA bots to evaluate both recent and old financial transactions for anomalies and patterns that can point to fraudulent or unlawful activity. RPA will need the financial institution to investigate, record, and evaluate the current processes, generating in-depth insights and highlighting high-risk areas.
Comprehensive customer profiling:
Technology makes it possible to extract useful information from massive data sets that can be used to forecast customer behavior. Institutions can make lending choices more quickly because of this thorough client segmentation. The most recent technology offers information that goes beyond simple demographics.
Numerous financial organizations have implemented robotic process automation (RPA) to streamline operations, cut costs, and save time. Many NBFCs have worked with fintech companies to adopt this type of software, allowing them to use resources more efficiently and make lending decisions more quickly. This has sped up the processing of numerous loan applications by NBFCs and decreased the possibility of human error. Additionally, it has aided in improving the accuracy and structure of the underwriting process.
Increasing the speed of fraud investigations:
RPA collects data from numerous sources and analyses it quickly, allowing investigators to devote more time to concluding fraud cases. So, the risk of banking fraud is lowered.
Why Choose AutomationEdge?
AutomationEdge is a leading Hyperautomation platform with IT Automation, Robotic Process Automation (RPA), Conversational AI and Intelligent Document Processing capabilities to help banking organizations automate their repetitive, rule-based tasks across verticals.
Unlike other platforms, AutomationEdge has built a library of ready automation solutions called as SolFlos to automate banking processes like reconciliation, email contact center
automation, GST automation, bank statement automation and more. These solutions reduce the time and cost of implementation and enable faster Go Live.
To understand the offerings better, let us focus on the real use cases for the NBFC sector:
DocEdge – IDP Solution with OCR, NLP and ML
NBFCs are using intelligent data capture solutions for document processing to achieve a greater percentage of straight-through processing (STP). Include bank staff in the loop with the maker checker console for compliance and speed for process optimization. It has tremendous benefits by reducing errors and costs incurred due to digitization.
AutomationEdge’s favorite chat channel is now easily available at the service desk too. Chatbot, Email, Messenger, Forms, Web Provide omnichannel support to your customers and employees with AI that understands human language context. Conversational AI offers smarter conversations with instant resolutions by reducing wait times from days to seconds.
RPA, API and UI Automation
Modern web applications, legacy systems, and homegrown desktop apps can all be integrated with modern systems with any of the incompatible systems for seamless and error-free data flow.
The Final Note
The world is enamored with the true potential for AI and ML to revolutionize the banking industry, and both clients and institutions will benefit from this transition. NBFCs have the ability to significantly cut expenses, which will benefit customers who pay less. A special synergy between technology and the human interface is being created by the changing role of process automation in NBFCs. Automation is reviving the NBFC industry with quicker decision-making turnaround times, process amplification, and focused outreach.
As a result, processes are becoming more efficient, standardized more quickly, and streamlined to offer everyone impartial services. It is fostering ‘last mile’ interactions and advocating for financial inclusion across the nation. Future-oriented technologies are propelling NBFC expansion and spreading throughout the nation’s financial ecosystem, so the sector is about to enter a revitalizing stage – a crucial stage where automation does more than just lessen reliance on physical labor.
So, it’s time all NBFCs explore their road down the future using automation and RPA. Reach out to AutomationEdge to experience a free demo of how it is made possible!