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Arka Fincap Redefining Finance Through Technology

In this conversation, Suman Saurav, CTO of Arka Fincap, shares insights into how the company has leveraged advanced tools and platforms to automate operations.

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Aanchal Ghatak
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Arka Fincap

Suman Saurav, CTO of Arka Fincap

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Arka Fincap has embraced technology to streamline its operations and enhance customer experiences. By utilizing tools such as low-code platforms, automation, and cloud infrastructure, the company has significantly reduced processing times and operational costs.

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This approach has enabled efficient loan processing, seamless fintech integrations, and data-driven decision-making. Arka’s journey highlights the role of technology in modernizing financial services while balancing scalability, compliance, and customer-centricity.

Collaborating with fintech partners through standardized APIs has been pivotal in enhancing our loan sourcing capabilities and meeting customer expectations for speed and efficiency.

In this conversation, Suman Saurav, CTO of Arka Fincap, shares insights into how the company has leveraged advanced tools and platforms to automate operations, enhance customer engagement, and maintain cost efficiency. From utilizing low-code platforms for rapid deployment to building a cloud-first infrastructure, Saurav delves into the technologies shaping Arka’s journey and the lessons learned along the way. Excerpts from the interview:

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How have you leveraged technology to streamline its operations and enhance customer experience? What specific technologies or tools have been instrumental in this transformation?

Arka Fincap has pioneered a technology-driven operational model aimed at optimizing efficiency and enhancing customer satisfaction. From inception, the company committed to a robust infrastructure built on contemporary technology, allowing automation of critical processes such as customer onboarding, loan sanctioning, and disbursement. These advancements have drastically reduced processing times and operational costs.

Key technologies include:

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• Low-Code/ No-Code Platforms: These have accelerated the development of the Loan Origination System, enabling rapid product launches and program adjustments without heavy reliance on the IT systems. This adaptability ensures a swift response to market dynamics.

• Standardized APIs: Seamless integration with fintech partners has been achieved through APIs, enabling efficient data exchange and streamlined workflows.

• Automation: Processes like loan decision-making and disbursements are now automated, achieving turnaround times as low as four seconds. This efficiency boosts transaction volumes without increasing overhead.

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• Advanced Analytics: Tools such as Inferyx and Power BI provide insights into customer behaviour and business performance, supporting strategic decision-making.

Can you elaborate on Arka’s approach to cost optimization in the context of digital transformation? How have you managed to balance the need for advanced technology to maintain a frugal cost structure?

We have embraced a cost-conscious strategy that integrates advanced technology while maintaining a lean cost structure:

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Cloud-Based Infrastructure: Utilizing a pay-as-you-go model, the cloud infrastructure scales resources based on demand, minimizing costs associated with physical hardware.

Low-Code/No-Code Platforms: The implementation of low-code / no-code platforms for Loan Origination System has been instrumental in reducing development costs and time. This has empowered business analysts to make changes to applications without needing extensive IT intervention, allowing for rapid deployment of new features or adjustments to existing processes. 

This agility not only cuts down on development costs but also accelerates the time-to-market for new products.

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Our digital transformation is built on a foundation of empathy, agility, and technology, ensuring that we stay customer-focused while driving sustainable business growth.

Unified Loan Management System: A single LMS consolidates data management, reducing technology investment and simplifying reconciliation processes.

SaaS Applications: Functions like HR management and expense tracking leverage SaaS solutions, offering flexibility and cost efficiency.

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What role have SaaS and cloud computing played in Arka’s digital transformation journey? How have these technologies enabled you to achieve infinite scalability while managing costs effectively?

SaaS and cloud computing are central to Arka Fincap’s digital transformation:

Cloud Infrastructure: Enables scalable, cost-effective operations with a pay-as-you-go model that adjusts resources based on demand.

Infinite Scalability: The flexibility of cloud solutions accommodates fluctuating demands without the need for additional hardware.

SaaS Applications: These streamline operations, reduce overhead, and provide access to the latest tools, ensuring operational agility.

Can you share specific examples of how Arka has quantified the benefits of its technology investments in terms of cost savings, efficiency gains, and improved customer satisfaction?

Arka Fincap’s technology investments have delivered measurable outcomes:

Cost Savings: Automation of loan processes reduces operational expenses and staffing requirements, achieving turnaround times of four seconds.

Customer Satisfaction: Arka’s product offering like the Uday loan service for small ticket loans against property offers tailored solutions for MSMEs, addressing unmet needs and fostering trust.

Data-Driven Decisions: Advanced analytics tools enable informed decision-making, improving resource allocation and service delivery.

Employee Support: Our in-house chatbot Vidya enhances internal efficiencies by centralizing access to policy information.

How does Arka ensure compliance with evolving regulations in the financial services sector while embracing digital transformation?

We have adopted a proactive approach to ensure compliance with evolving regulations in the financial services sector while embracing digital transformation.

Data security is critical in the lending sector, and Arka addresses this by adhering strictly to regulatory guidelines and implementing best practices in cybersecurity.

Here’s an overview of how the company manages this balance:

• Integration of Technology and Operations: Arka Fincap has established a unique model that intertwines technology with operations, allowing for streamlined processes that enhance compliance. The integration of digital tools enables the company to automate regulatory reporting and compliance workflows, reducing the risk of human error and ensuring timely adherence to regulatory changes.

• Continuous Monitoring of Regulatory Changes: The compliance team at Arka is dedicated to closely monitoring regulatory developments within the Non-Banking Financial Company (NBFC) sector. As regulations evolve, such as the adoption of Indian Accounting Standards (IND AS) and Scale-Based Regulations (SBR), Arka ensures that these guidelines are thoroughly evaluated and swiftly integrated into their operations. This agility allows them to remain compliant without significant disruptions to their business processes.

• Data Security and Compliance Frameworks: Data security is critical in the lending sector, and Arka addresses this by adhering strictly to regulatory guidelines and implementing best practices in cybersecurity. The company has instituted measures for protecting customer data, including employee identity management and data obfuscation where necessary. These practices not only safeguard sensitive information but also ensure compliance with data protection regulations.

• Risk Management Tools: Arka employs robust risk management frameworks that include tools such as Expected Credit Loss (ECL), Early Warning Signals (EWS) mechanisms and Power BI analytics. These tools facilitate continuous monitoring of various risks, from asset quality to governance and liquidity, enabling the company to address potential compliance issues proactively. By utilizing data-driven insights, Arka can make informed decisions that align with regulatory requirements.

Are there any strategic partnerships or collaborations that Arka has formed to accelerate its digital transformation journey?

We have strategically partnered with various organizations to accelerate its digital transformation journey, particularly focusing on enhancing its offerings in the MSME lending sector. Here are some key partnerships and collaborations that have played a significant role in this transformation:

• Co-Lending Partnership: Arka Fincap has established a co-lending arrangement with banks and NBFCs aimed at providing loans to Micro, Small, and Medium Enterprises (MSMEs).

• Fintech Collaborations: Arka has formed partnerships with multiple fintech companies to enhance its loan sourcing capabilities. These collaborations enable seamless integration by utilizing standardized APIs. The integration also allows for quicker loan processing times and improved service delivery, aligning with customer expectations for fast and efficient financial services.

•  Adoption of SaaS Solutions: Arka leverages various SaaS (Software as a Service) applications to streamline operations across different functions such as HR management, expense tracking, and customer relationship management. This approach has resulted in cost efficiency and operational agility.

What is Arka’s long-term vision and goals for digital transformation?

Arka has articulated a clear long-term vision and set of goals for its digital transformation journey, focusing on leveraging technology to enhance operational efficiency, customer experience, and overall business growth.

• Empowering Financial Growth: Arka aims to drive financial empowerment by providing innovative and technology-enabled financial solutions. The company envisions itself as a robust, diversified institution that can facilitate growth for its clients in the MSME sector while ensuring sustainable value creation.

• Customer-Centric Approach: The organization is committed to enhancing customer experiences through empathy and agility. By focusing on creating differentiated customer journeys, Arka seeks to meet and exceed customer expectations in the financial services sector.

• Technology as a Key Enabler: Arka considers technology as a critical driver for business growth. Our long-term vision includes building a comprehensive IT architecture that supports seamless access to business systems and applications, thereby improving operational efficiency and service delivery.

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