Weakening demand and a series of defaults have left NBFCs gasping for breath. Banks have been wary of providing them much needed cash due to spiralling NPA volumes. The overall business sentiment in the market has been affected. The lack of liquidity has hit the corporate loan segment hard. Case in point: The top 500 private sector companies have defaulted on combined loans worth INR 7.35 lakh crores, according to a recent study by India Ratings and Research. This means that NBFCs need to find better ways to manage risk while diversifying their portfolios across a broad range of markets.
Why Choose Finezza?
Efficiency, cost optimisation and customer experience have now emerged as top business priorities for lenders across the board. However, effective credit risk management is the common denominator that underpins all the other outcomes for NBFCs and banks in order to overcome the problems they currently face. As one of India’s leading FinTech solutions providers, Finezza is uniquely placed to help non-bank financial institutions to achieve their business objectives in the shortest possible time.
Here’s why Finezza is the perfect corporate loan lifecycle management solution for lenders:
Faster Loan Origination
Corporate ticket sizes are generally many times bigger than retail, with working capital needs forming the bulk of the demand. In turn, it is driven by sales cycles and input costs. To bridge cash flow gaps, companies need loans to be funded quickly. At a time of critical funding shortfalls, corporate clients sometimes need credit in a matter of days. This calls for agile loan origination – data collection and application processing – on the part of lenders.
With Finezza, new credit inquiries are automatically captured and assigned to the right team. Thanks to paperless document verification, loan applications can be processed faster and at a lower cost, in terms of both time and resources. The result: Better customer experience and sales funnel optimisation.
Improved Decision Quality
Poor asset quality has understandably made lenders cautious. Instances of corporate fraud are also on the rise. However, there are systemic factors such as the human error that are also responsible for the NPA woes faced by lenders. To minimize credit risk and expand customer lifetime value, NBFCs need better segmentation strategies. A major challenge that stands in the way of doing this is lack of credible and accurate credit data.
Credit bureau information can sometimes be patchy and even out of date. Finezza’s proprietary credit bureau analysis tool combines data from multiple credit information companies to mitigate data integrity risks and improves Turn Around Times (TAT) significantly. If credit scores are not available for a small business owner, for example, the Bank Statement Analysis (BSA) algorithm scans alternate sources to extract personal payment history data and defaults, if any, to reduce the possibility of defaults or delayed collection.
Reduced Processing Times
According to a study by consulting major McKinsey, process automation has the potential to reduce 10-25% of the routine tasks currently handled by underwriters. This can help them focus on higher value tasks. Finezza’s Loan Eligibility Estimator tool allows for a blended approach, combining credit data with predictive risk analysis to preclude the possibility of bad debts. Often the lending review process has a different queue for loan applications with a higher risk profile. Given the need for additional analysis, the time taken for completing the review may be high.
Finezza’s AI-driven decision support engine makes it possible for underwriters to take objective decisions in a time-bound manner. By scanning diverse sources such as GST payments, IT returns and bank account information, the Loan Eligibility Estimator tool makes it possible for lenders to reduce processing time by a significant margin.
It automatically identifies and prioritizes risk factors by order of importance to reduce Turn Around Time (TAT). This also helps lenders offer customised loans to corporates while minimizing their risk exposure.
Having access to consumer data is one thing but being able to derive intelligent insights from it is quite another. NBFCs have much to gain by developing data models that can anticipate future trends, giving them a valuable time to pivot towards emerging market needs. New generation competitors like Neo-banks are already taking the lead in this regard, with integrated analytics giving customers deep insights into their spending habits. For traditional lenders, analytics and data modelling is a time-consuming process in the absence of an end to end process automation.
Finezza steps into this gap with comprehensive analytics features that help build, test and validate new data models in terms of market intelligence, including segment-specific reporting eg: corporate customers. This can give NBFCs the edge when it comes to controlling credit risk, identifying unmet demand and competitor analysis. Its Analytics suite captures key trends and builds custom reports, thanks to embedded Machine Learning and Big Data algorithms. It provides timely, actionable information to key decision-makers at NBFCs and MFIs, who can act on it without delay.
Centralised Data Access
To manage their corporate portfolios and keep risks at bay, lending teams need access to high-quality customer data in real-time throughout the origination to disbursal cycle. Delays or other inefficiencies can have far-reaching consequences for the customer acquisition efforts of lenders. Finezza acts as a central data repository that makes it possible for all stakeholders to seamlessly access information whenever needed. It automatically analyses, interprets and presents large amounts of data in an easy to absorb visual form, using Natural Language Processing (NLP) technology. This information is then disseminated across departments through the portal, email and a built-in interactive chat bot. Finezza comes with robust security features to ensure data integrity and restricts access to authorised users only.
Compatible with Existing Banking Systems
The cost of upgrading legacy CRM systems can be prohibitive. Many NBFCs invest a large sum of money to develop customised solutions to meet their unique needs, which cannot be replaced overnight. The cost implications apart, there are significant data migration and workflow configuration problems that routinely crop up during a wholesale replacement. Finezza was built from the ground up as an interoperable, user-friendly platform that can link seamlessly with other platforms via APIs. This cuts integration and deployment time, without impacting operations. Finezza’s ‘plug and play’ interface is designed for maximum compatibility with a wide range of core banking systems in use today.
To address the challenges of the corporate market, lenders need a long term strategy that fuses together customer acquisition, lifecycle management and servicing into a single, integrated network. Finezza’s NBFC software was conceived and built by veterans of the financial services sector, leveraging real-life lessons. It has a well-defined roadmap for future evolution which helps lenders stay on top of business challenges.
Finezza is a lending management software that helps NBFCs to what they do, just efficiently. If there is anything else, you would like to know about NBFCs, their functions, or their facilities, write to us in the comment section below.