Augmenting India’s tech-enabled digital lending landscape

“Banking is essential, banks are not”, says Bill Gates. As per estimates by Boston Consulting Group, digital lending in the country is likely to exceed $1 trillion over the next five years. Fintech is enabling millions of Indian customers to fulfil their aspirations and meet their daily financial needs through user-friendly, app-based digital solutions with the utmost ease.

Smart algorithms making digital lending a success

AI and ML use smart algorithms to assess creditworthiness utilizing a combination of conventional and alternative methods. A large number of data points are collected from traditional credit history as well as from social media (through NLP), SMS records, bank APIs, etc. to predict the purchase intent and possibilities of defaults. This helps in scaling the business by being able to provide credit to NTC (new to credit) and other unique customer segments at lower NPAs (Non-performing assets).

Chatbot driven customer service

In banking too, chatbots driven by AI have significantly improved customer experiences. Customers are now able to perform activities like stock investments, address change, expense management and much more without human intervention. With the development of speech and text processing, chatbots can even offer assistance to customers through voice-enabled platforms.

Scope of AI and ML in consumer lending

AI can be immensely helpful in reducing the possibilities of human errors, especially when it comes to loan processing and disbursal. From customer onboarding and fraud checks to document approval and loan disbursement, AI and ML solutions add greater efficiency to the entire lending ecosystem, while reducing biases and providing a better experience to consumers.

Tech-enabled Personalization

Apart from these service offerings, AI and ML algorithms can also make financial transactions more personalized. These tools deeply analyze individual consumer data and offer personalization at the micro-level. ML algorithms also monitor anomalies and notify the lender and customers of suspicious transactions.

These advances can soon turn into an international model to provide quick and seamless payments across countries, as highlighted by the Bank For International Settlements (BIS). Apart from the benefits mentioned above, technology has made the overall lending ecosystem faster, safer, hassle-free, paperless, and transparent - leading to new opportunities and faster financial inclusion across India.

By Anuj Kacker, COO and Co-Founder, MoneyTap