Amid reports of slowing credit growth owing to the coronavirus crisis, lenders are looking to streamline their operations and eliminate inefficiencies. From shutting down non-profitable branches to digitising workflows, there is a clear push to cut costs and increase customer engagement. Automated loan management systems with built-in analytics are attracting a lot of interest from lenders looking to tap new market segments such as semi-urban and rural consumers.
Finezza has emerged as a partner of choice to banks and NBFCs in the process of reworking their business strategy. Our loan management system, which is an integral part of a comprehensive end-to-end lending lifecycle management solution, is enabling them to respond to customer credit needs in a flexible and agile manner.
Key Features of Finezza’s LMS
Here are the key advantages that Finezza’s Loan Management System offers to the lenders:
Multi-Loan Category Creation
Finezza enables banks and non-banking financial institutions to create loan accounts across their entire portfolio including both EMI-based and non-EMI based loans. EMI-based product category relates to credit cards, personal loans or loans against property while non-EMI products include overdraft loans or advances. This gives lenders greater business visibility and improves efficiency across the loan lifecycle.
Flexible Repayment Frequencies
From payday loans to microfinance, loan ticket sizes have been getting smaller over the years. This trend is also picking up in secured loan categories such as home and car loans for both banks and NBFCs. Lenders can create daily, weekly, fortnightly or monthly repayment schedules in Finezza in accordance with loan type, interest rate, tenure and other specifications. Deferred payment schedules such as bullet repayment or interest moratoriums for a specified time frame can also be created in Finezza, allowing seamless loan tracking and management.
Finezza supports single and multiple disbursement schedules as defined by lenders. Automating loan disbursements can improve turnaround times significantly, increase customer satisfaction, and help lenders grow the size of their loan books.
Flexible Payments Module
Finezza is designed from the ground up to support a variety of traditional and digital payment options including cheque, NACH, eNACH, Net banking or UPI enabled payment apps, enabling seamless accounts receivable management for financial institutions.
Configurable Waterfall audits
The importance of a strong audit and compliance framework cannot be understated in today’s highly regulated lending environment. Finezza allows financial institutions to configure the order in which various credit risk management workflows are to be audited. It can be customised for specific regulatory guidelines and internal policy requirements, reducing risk exposure for lenders.
Dynamic Loan Document Generation
Minimising data entry during the signup phase can reduce the need for back-office processing and improve turnaround times. This can help financial institutions regain their competitive edge in the new normal. Finezza gives lenders the ability to develop workflow specific templates and create loan documents on demand.
The result: 100% accuracy, faster loan processing and assured compliance.
Bank Payment Reconciliation
Manual reconciliation processes account for a huge percentage of man-hours at banks and other financial institutions. They are also prone to verification errors. Digital loan management systems like Finezza can automate reconciliation processes seamlessly across the different modes of payment.
Finezza’s built-in analytics engine helps lenders predict and manage credit risks proactively by analysing and reporting early warning signals. This reduces the possibility of defaults and write-offs, enabling better returns on investment for financial institutions.
Proactive Monitoring of Loans
As lenders increasingly adopt alternative credit scoring models, constant loan monitoring is essential. Finezza integrates credit inputs from multiple sources to build a complete 360-degree view of the loan applicants’ creditworthiness.
Waivers on loan processing fees, interest and service charges add to the overall operating costs for lending institutions. With Finezza, banks can define criteria to govern fee waivers and reduce discretionary refunds that could impact profitability or attract regulatory scrutiny.
Restructuring of Loans
In the post-COVID scenario, loan restructuring could become a legal mandate for lenders in India. To mitigate the short term revenue impact, they need to devise a strategy that provides borrowers with greater flexibility on their outstanding loan balances while ensuring adequate provisioning for bad debts on the books of lenders. Finezza’s advanced decision support engine can help lenders build risk models for loan restructuring while reducing customer impact.
Settlements and Write-offs
Given the massive displacement in incomes after COVID-19, lenders will need to focus on optimising their recovery strategies for the future. Finezza gives lending teams better visibility into borrowers’ financial behaviour through customised workflows and configurable alerts based on predefined parameters. This helps them reduce net losses and improve recovery rates.
Credit Bureau Reporting and Analysis
By integrating data from multiple credit bureaus, lenders can understand the psyche of their customers with regard to financial behaviour. This can improve the quality of their credit decisions and provide better delinquency management. Finezza’s advanced Credit Bureau Data Analysis algorithm can help lenders overcome the common problem of incomplete or inaccurate credit bureau data and improve loan approval rates.
Accounting Software Integration
With Finezza, creating data pipelines between multiple software platforms is no longer a hassle. Its open-architecture design allows quick and easy integration with accounting software for balance sheet and P&L purposes. This helps lending teams measure their financial performance accurately and make realistic projections about future growth.
Budgetary Provisions Management
Building provisions or reserves to cover potential losses requires responsive risk modelling on an ongoing basis. Given the dynamic market conditions, overestimating or underestimating future credit losses could lead to severe liquidity problems for lenders. Finezza’s predictive analytics engine enables lenders to mitigate losses by building sufficient provisions for bad debt in their balance sheets.
For lenders looking for ways to reduce the cost and improve returns on collections activities, digital Fintech platforms like Finezza are an ideal fit. It digitises the entire collection assignment, management and reconciliation cycle for lenders and the external collection agencies that they work with.
Effective Loan Communication Management
AI-enabled digital loan management systems like Finezza can streamline and automate customer communication with regard to EMIs due, payment status, reminder alerts, and dispute resolution for banks and non-bank financial institutions. This can improve customer engagement and help lenders grow the lifetime value of a customer.
To Sum Up
Finezza’s end-to-end loan management solution helps lenders identify market gaps, execute with precision, and create greater value for their customers, shareholders, and employees.
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