While many fintech firms are competing with traditional banks and lending institutions by offering loans that can be approved with just a tap on the phone, lenders are compelled to digitise their processes and offer various mobile lending solutions to compete with the market. However, though many mobile lending solutions are mushrooming, very few solutions help in speeding up the procedures and match the expectations of today’s millennial empowered borrowers.

How does Finezza’s Mobile Ecosystem Help Optimise Loan Management Process?

Finezza’s mobile ecosystem enables various lenders, including banks and financial services companies, to encapsulate their entire digital lending inside a single mobile app. Finezza’s convenient mobile ecosystem ensures faster and easier customer on-boarding, simplifies the collection process for loan agents and also helps customers upload their documents in no time as well as track the status of the applications on the go. In short, Finezza’s mobile ecosystem interlinks the lender, customer and collection agents, thereby offering wholesome and seamless loan servicing at a rapid pace.

A Look Into Finezza’s Unique Ecosystem Of Mobile Apps 

1. FoS App (Feet on Street):

Finezza’s FoS app is designed to empower the field staff to bring in more customers through its enhanced mobile application services. It offers paperless processing across all stages like data acquisition, screening, field investigation reports etc. Further, the status of applications can be tracked while on the go. Some of its features include:

•       End to end loan application processing
•       Enables easy uploading of documents
•       Helps track the status of the application on the go
•       Location tracking
•       Automated follow-ups with leads
•       EMI Calculator

2. Customer App:

Finezza’s Customer app allows for customer self-service. Customers can learn about the various types of loans offered and apply for the required category of the loan directly through their mobile. In addition to this, customers can track the status of their application on the go, estimate their creditworthiness, receive approval as well as accept the loan proposal instantly on mobile. Further, customers can access necessary reports like EMI schedule, payment details, etc.from their mobiles.

Finezza’s Customer app thus reduces the turnaround time as well as the overhead expenses related to customer reach and customer support. The Customer app helps the client to save colossal expenditure that would have otherwise been incurred on customer support functions like that of call centres.

Some of the features offered by the Customer app are:

•       Self-service for lending lifecycle management
•       Upload documents easily
•       Track the status of the application on the go
•       Accept loan proposal instantly
•       Schedule repayment
•       Self-help

3. Collection App:

Finezza’s Collection app is a form of delinquency management solution targeted towards simplifying the field collections and enabling better recovery of debts. The Collection app by updating the collections on mobile and web allows lenders to do away with the traditional receipt books, reconciliation procedures and other issuance and processing paperwork.

This app dramatically benefits the collection agents as they can now easily track the status of their customers who have to repay the loans. Further, as various manual procedures related to faulty customers and misrepresentation issues are automated, the risks associated with float money are significantly reduced — all these results in less turnaround time.

Given below are some of the features of the Customer app:

•       PTP tracking
•       Follow-up tracking
•       Real-time customer information
•       Location tracking
•       Collection updates (mobile and web)
•       Address locator

Today’s millennial generation has entered the financial market with better technology like that of mobile apps and various other financial management suites that enhance the loan management process. Hence, it becomes imperative on the part of the lenders to adapt to the changing customer needs and expectations before it is very late.

Today’s empowered borrowers expect a quick processing time and faster decision-making tools. A recent study by PwC showed that three out of four demographic groups preferred online borrowing as opposed to traditional forms like contacting the branch or calling lenders. [1]

Hence, incorporating digital lending technology into the business forms the best way to propagate new products, customise the lending and decision making process and at the same time meet the customer requirements quickly. Finezza’s mobile ecosystem suite caters to the present millennial empowered borrowers and lenders as well, as it includes various components of the loan management system like customer acquisition, loan self-sourcing, loan servicing and loan collections all of which can be done with a tap of the finger.

This mobility suite designed for all the stakeholders helps to reduce the loan turnaround time, automate customer notifications, and thereby free up the lenders’ and borrowers’ time to make critical decisions.

Benefits of Finezza’s Mobile Ecosystem Suite:

• Results in lower turnaround time on account of quick access and better customer responsiveness.
• Enables quick marketing of products, given the seamless integration with existing as well as legacy systems.
• Helps to improve operational efficiency on account of automation and minimal human intervention.
• Ensures optimal customer reach on account of better mobility of products and ability to reach a broader customer market.
• Finezza’s mobile suite safeguards lenders against potential risks. This is because of its enhanced fraud management solutions and improved credit assessment packages.
• The mobile suite helps to tighten the collection process and also minimise the operational costs.

Transformation into a digital lender is not that easy. It requires not just converting the paperwork into digital format but also restructuring the entire legacy back-end process. The Digital Banking report that researched the global state of digital lending found out that many organizations were beginning to embrace the need for online and mobile lending. Though there was significant growth in mobile lending and online lending processes, most of them were substandard and failed to meet customer expectations. [2]

34% of organizations had a mobile app for lending. As to the ability to complete the entire loan originating system through mobile, 31% of respondents were positive of completing the transformation process, 33% felt they would complete within and year and 12% in the next three years. These results prove that there is a stronger movement towards digitization of consumer lending. [3]

However, for the digitisation of loans through mobile apps, speed is a prime factor.

Lenders have to keep pace with the expectation levels set by other sectors like travel and retail, to meet the desire for immediate personalised service. Research on the time taken to complete a mobile loan application showed that 25% of organizations reported under five minutes while 55% said between five to ten minutes and remaining 20% said that it took more than ten minutes.

Hence merely installing a mobile app will not suffice. One has to streamline and revamp the existing process so that it integrates seamlessly, and also ensure speedy processing and delivery of loans as we move into the age of rocket science. 

One must install a complete end-to-end foolproof mobile lending solution to optimise the digital lending initiative fully. Finezza offers a whole end-to-end mobile ecosystem to facilitate all requests, detect potential delinquencies, optimise the conversion funnel, and ensure seamless loan servicing. Check the mobile suite here.

Today, everybody has a strong social media presence, no matter if your an individual or a business entity. Even though the social media platform has been subjected to a lot of criticism for invasion of privacy, it has served as a valid medium for revealing insights into a company’s intentions and legitimacy.

This data is used by several companies to assess customer behaviour. Even banks and fintech companies are taking advantage of this incredible medium for data to validate the authenticity of a loan applicant. A well-maintained social media profile can actually be a smart way to procure small business loans.

Whether your customers are young personal loan seekers who have no previous credit history and hence would also not have a lucrative credit score, or a start-up that is seeking a business loan to grow their business, social media can be a viable platform to access valuable and confidential information about your applicants.

How You Can Use A Loan Applicant’s Social Media Profile To Assess Their Credibility

Here’s how social media can serve as a data point for assessing your loan applicants:

1. Verifying the Information Provided

Basic information like the physical address along with the name of the business or individual can be cross verified with the actual information that is provided by the applicant. If the information does not seem to be consistent across all social media platforms, it can raise suspicion and be subjected to more scrutiny to validate the information.

2. Duration of Social Media Presence

The duration and the foothold of a business can be quickly assessed by looking at the social media page of the business. Pointers like how many followers, likes and reviews they have can help to assess the positive impact of the business. The longer the age of the business social sites, the higher the aggregation of data that can be utilised to assess the brand and its products and services.

3. The Posts

The next thing you can check are the individual posts on the social media page. What kind of posts are published on the platform, how frequently are they done, and what are the reactions to these posts? This information can be used positively or negatively to assess if the business has been marketing their products effectively.

The posts should not be solely used for driving purchases and sales. They should also be used to share valuable information, encourage learning, convey greetings during festivals, discuss trending topics, etc. A good combination of such posts is a telltale sign that the business is using the platform to genuinely build a connect with their customers and have long-term plans for the business.

4. The Followers

Along with the posts, checking the quality and quantity of followers or connections of the business page is important. The number of followers on social media signifies whether end customers really like the product and help to assess whether the business has a chance of success.

5. Ratings, Reviews and Testimonials

Checking the ratings and previous reviews of the business is something which we all do before we buy a product or avail a service. The same goes for validating a loan application. How has the online reputation of the business been so far?

Bad comments and reviews are not just harmful to the business but also for the business loan application. Going through the social media reviews of the business will convey the success and the overall journey of the business so far.

6. The Frequency of the Response

Social media platforms help to connect and engage with the audience by getting your story across in an appealing manner. By looking at the response of the posts, comments and likes, you can gauge whether the business is really all out for connecting with the audience and converting them as customers.

It shows how well the business is interacting with their audience and making an effort to maintain a positive customer relationship. Checking if the business has responded to individual comments and accounted for all customer feedback is a great way of knowing if the business truly cares towards the needs of their customers. An unresponsive social media footprint shows an irresponsible business that does not value its customers.

7. Determining Terms for Online Loans

There is a strong relationship between customers who are active and responsive on social media, turning out as good customers. This is a fundamental sign of a good and thriving business that will do even better over time and so be able to repay on time.

The information on social media platforms can help to determine the terms of the loan by personalising the loans with special interest rates for that particular customer.

8. Useful for Loan Origination and Customer Acquisition

Data in social media pages can indeed be a starting point to acquire new customers. When several businesses use it to attract customers, why not use social media data to acquire new customers who might need loans to meet their capital demands?

As a fintech company, you can start your own social media page and market your campaign to acquire prospective customers and businesses to avail loans from your institution.

Else, you can surf the social media pages to look for prospective customers who are doing good and enhance their position by providing them loans.

9. The Five C’s

Traditionally, in the lending industry, the primary attributes that lenders often look for are the Five C’s – Character, Capacity, Capital, Collateral and Conditions. All of this can be informally assessed by using data from the social media pages.

By going through information of a business page or an individual page, you can understand their

• Character – on a personal basis.
• Capacity – know their trustworthiness or capacity and ability to repay the loan.
• Capital – money the borrower has already invested.
• Collateral – physical assets that can guarantee the loan if the borrower can repay it.
• Conditions – understand the overall competition and economy of the business position.

Even though social media is a relatively small consideration for companies who make business or individual loan decisions, it is a significant data point that should not be overlooked. Use social media to your advantage and leverage the power of data from gaining insights that otherwise will not be possible.

Rather than relying on factual information presented by the business or individual, why not take a step further and assess the actual and real time information available in social media pages. In this digital world, it’s time to go beyond assessing the creditworthiness by just looking at the credit scores.

For new businesses and consumers who don’t have a previous credit history, social media can serve as a tremendous platform to gather data and decipher the real picture.

Build your own credit assessment algorithm by using Finezza’s loan management software to power your lending decisions. Get in touch with us to know more about how you can use social media to make smart loan decisions.

The advent of new technologies has paved the way for a new era of financial services within the digital ecosystem. Thanks to the milieu of fintech companies, small to medium-sized businesses can get access to capital resources easily.

However, with new pathways, opportunities are rife for sophisticated fraud strategies, greatly harming the financial services industry. In fact, according to recent findings from our Global Identity and Fraud Report, 55 percent of businesses globally reported an increase in fraud-related losses over the past 12 months

Despite the tightened reins on lending, business loan fraud is still prevalent. Therefore with all the advancements that fintech companies provide, how can they ensure that they are a step ahead of uncovering business loan fraud?

Here are the ways you can detect business loan fraud:

Identifying a Business Loan Fraud

Small business loan frauds are not as visible as consumer loan frauds because businesses are not really viewed as victims in the way consumers are. There is a lack of legislation requiring frauds to be reported and therefore, a dearth of information to identify them.

Besides, the fact that a business loan fraud can be three to ten times more profitable than consumer loans, this should be a growing concern for companies to adopt the right strategy to identify red flags and tackle them effectively.

1. Knowing the Small Business Fraud Types

Business loan frauds can be characterised based on a first-party or third-party basis, varying significantly in frequency, severity and complexity. A first-party fraud or victim-less profile is attributed to having some form of material misrepresentation. For example, misstating revenue figures in the loan application.

The second type is third-party involving a third-party stealing the identification details of a known business or an owner in order to borrow credit using the victim’s name.

2. No Physical Presence of the Business

Businesses that don’t have an official physical presence or are shell companies run by fictitious entities can be a cause of suspicion. These type of businesses are often created for money laundering and are easy to form and operate.

3. Multiple Businesses Associated with One Person

Having multiple businesses under one owner is a red flag that needs more research and exploration to find out if it’s legitimate. Look at how much each business is earning and if there’s not much income to it, it can indicate something suspicious.

4. Commercial Bust Out

A bust-out is another tactic that involves the criminal opening several lines of credit under different business names and eventually abandoning all accounts after maxing out or exceeding all the credit lines.

5. Lack Of A Solid Business Plan

Getting a thorough understanding of what the business is doing and aims to do is of utmost importance. What is the overall business strategy? If the company lacks a lucrative plan, the chances are high that it can be a scam to extract money.

6. Inflated Earnings

Several businesses tend to have overly exaggerated or misrepresented earnings in their book of accounts. Some do it deliberately while others can do it mistakenly without the intent. In either case, if the company’s income appears to be inflated that what it actually should be, it can only be known with proper verification.

7. Unaudited Financials

The financial health of the company should not be taken for granted on the sole basis of the applicant’s words. Always insist on audited financial statements. Since it’s very easy to fabricate the financials, you should always rely on solid data to verify the financial statements with the bank statements.

8. Never Payment

Never pay or never payment occurs when the business opens a new account and never makes a single payment on any debt owed. This translates as a financial loss for lenders to write it off as a credit risk problem. Never-pay losses are on the rise now more than ever and so, organisations must have a way to predict never-pay behaviour and prevent losses.

9. Account Takeover

This is a third-party fraud when an impostor takes over an existing account that is already established by the legitimate business. These kinds of frauds are facilitated through phishing scams and accomplished with the interception of credit cards and statements to take over an account.

Moreover, business identity thefts that utilise the letterheads and contact information of an existing company are also predominant.

10. Lack Of References

It’s important to check for references to any past dealings with banks or organisations. If something is fishy related to the previous history of the business, then more questions need to be asked. Knowing such references will help to decipher the credibility of the business and their position.

Challenges Faced in Identifying Small Business Fraud

Lenders face a plethora of challenges in identifying business loan fraud. The most critical challenge is to make sure that the data sources that are used to check the applicant’s information are reliable. Rather than relying primarily on the applicant’s self-reported data, there should be scope for cross-verification to understand the credibility of the business.

Moreover, as loans are applied for online, using the ‘faceless’ channel of Internet and mobile, there is an even greater chance of business loans frauds and scams. Therefore, organisations might need to implement additional risk mitigation efforts in delivery channels that are not face to face.

Best Practices to Prevent Business Loan Fraud

Incorporating the following measures can reduce the chance of business loan fraud losses:

1. Verify Information from Multiple Sources of Data

A cross-dimensional analysis of several data points including the bank statement, financial statement, GST information, KYC details, credit score, social media channels and more is highly recommended to identify fraudsters.

Conducting a thorough analysis is the best way to eradicate false positives and uncover any anomalies. Using modern technology of big data and machine learning to your advantage will help you decipher customer behaviour and identify any offenders.

2. Smart Decisioning Through Analytics

The prevalent norm across multiple sectors of business is achieving more with fewer resources and balance cost reduction efforts. One common approach to managing customer acquisition costs is through adopting automated decisions through targeted analytics.

Implementing a unique score-based approach that considers the vast data points for the applicant’s creditworthiness assessment will reduce manual efforts and mitigate fraudulent activities. This is where analytics come into play and help you to segregate suspicious entities from those that don’t exhibit characteristics of fraud. As a result, you can oversee trends, patterns and set fraud risk tolerance levels and simplify customer treatment.

Finezza helps to mitigate your risk of business loan frauds by incorporating analytics and a solid credit assessment strategy that will help you get rid of false positives. Finezza’s comprehensive loan management system help clients streamline authentication by verifying and validating business data using analytical tools that account for multiple sources of data from several networks.

We are committed to listening to client needs and producing customised solutions that mitigate business loan fraud by delivering quality data, targeted analytics and blended decision making. A well-executed fraud detecting strategy will improve fraud identification and operational efficiency, in turn reducing customer acquisition costs.

To know more, get in touch with Finezza for a free demo.