A significant component of the modern Indian financial market, Non-Banking Financial Corporations (NBFCs) are fuelling the economy for the better. However, NBFCs face multiple operational challenges that can be effectively addressed through lifecycle management software.
The diverse credit outlets they offer to clients make them the preferred choice of SMEs for loans over traditional bankers. NBFCs boast of highly customised services, and the right lifecycle management software helps them deliver these services efficiently.
Common Lending Challenges Faced By NBFCs
With increased competition in the lending market and high cost of borrowing, there is a need for every business player to be as agile in the practices they follow as possible. Modern borrowers are tech-savvy and have high-tech demands when it comes to credit facilities.
Following a more customer-appealing approach through lifecycle management software and technological integrations can give a financial lending entity an edge above the rest.
However, there are impediments to the current growth rate of NBFCs. Some of them are listed below:
1. Manual Handling of Lending Process Challenges NBFCs
Lending processes can be time-consuming and tedious. A lot of paperwork is required, and manual evaluation and verification can take days altogether. The companies need to maintain a thriving workforce to meet the growing needs of the business, which further incurs more expenses.
This is where lifecycle management software becomes essential for automation and efficiency.
2. Limited Expansion Opportunities
The reduced risk appetite of traditional banks is one of the biggest pushes that has led to the growth of NBFCs. They target applicants who get rejections from formal bankers and the rural, unorganised, and under-banked populace. To further expand, NBFCs need to develop insights into their target audience. Gaining knowledge about the lending landscape would help them reach their market goals and bring in better revenues. NBFCs also find it difficult to target new customers and ensure expansion.
3. Difficulty in Hosting Customised Customer Experiences
Although NBFCs boast of highly customised services to suit the needs of particular clients, to differentiate themselves from traditional lenders, it remains challenging to execute. Increasing competition often coaxes them to use new strategies to reach the target audience and impress them. There is a need to break from the standard loan dispensing norms and offer highly innovative and tailored credit offerings to individuals.
4. Below Par Customer Experiences
NBFCs aspire to expand the market share they capture by offering diverse credit disbursement avenues to applicants who get rejected by traditional lending institutions. They also target the under-banked and unbanked sector of the populace. Given the enormous volume of loan applications and limited staffing, the customer service they offer suffers miserably.
5. Debt Recovery
NBFCs often come under the purview of regulatory authorities with strict scrutiny on their collection processes. All financial lending companies need to strengthen their debt recovery strategies to earn steady streams of revenue. Given the regulations, NBFCs often struggle with coming up with debt recovery strategies and which adversely affects their returns.
How Lifecycle Management Software Helps NBFCs Overcome Lending Challenges
Seamless Customer Experience for The Borrower
Integrating the right kind of lending lifecycle management solution brings the otherwise tedious borrowing procedure to a borrower’s fingertips, streamlines the processing and servicing time, and allows instant credit access to borrowers.
NBFCs can use tech tools to send personalised messages, share loan bill payment reminders or even forward statements to customers. Not only does this strengthen interpersonal relationships with customers, but it also creates superior customer experiences.
Cost-cutting and Time Saving by Omitting Manual Effort
It is important to note that technological innovations, thanks to the use of lending lifecycle management software, make operations highly automated at an NBFC. This allows easy scaling up of the business and cuts massive operational costs like paperwork processing and manual staffing. Cutting short the time required to process a loan application, this software promises optimal productivity at an NBFC. Making use of Cloud and SaaS-based models also proves to be cost-efficient in the long run.
Market Share Capturing & Customer Base Expansion
It is only with the help of the right technology that NBFCs can capture and analyse the market. The right lending lifecycle management software leverages crucial data about its current and potential customers. It becomes easier to navigate unorganised sectors of the population, given the digital access that these tech tools bring along. Not only do these lending companies understand their customers better through the help of data, but they also make better lending decisions.
Curating Highly Customised Lending Experiences
Embracing technology, thanks to lending lifestyle management tools, can help an NBFC achieve the desired level of personalisation and customisation that borrowers will appreciate. Not only do these tech tools bring the lending process to a customer’s fingertips, but they also offer specific solutions that are suitable for the needs of the clients.
Lending businesses also benefit from targeted automated messages that ensure personal access and efficient service to borrowers.
Automotive Debt Recovery Tools
Lending Lifestyle Management tools for NBFCs often have unique collection tools that make the life of loan collectors a whole lot easier. They omit the need to maintain paper-heavy files and offer real-time updates about repayments from borrowers. Follow-up tracking and location tracking reduce the burden of the field collection agent.
On the other hand, regular updates sent to borrowers increase the chances of timely repayments. Automation also ensures that the chances of human error are minimal
How Finezza Serves as the Right Lifecycle Management Software for NBFCs
Finezza is a comprehensive lifecycle management software that provides end-to-end lending management solutions to NBFCs and financial lending companies. The framework takes care of all the aspects of lending, from loan processing and evaluation to the debt recovery phase for NBFCs. The creatively designed analytics suite incorporates various perspectives for loan application assessment and helps with better decision-making.
The software boasts of cutting edge technology like AI and machine learning, and is highly customisable to suit the requirements of a lender. Not only does it improve the operational efficiency of the NBFC on account of automation and minimal human intervention, but it also reduces the cost of overall operations in the long run. The tech tools, when integrated into the lending portal, escalate the user experience for a borrower, giving the NBFC an edge above the market.
To know more about Finezza, get in touch with us today!
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