As the country sees an easing of the lockdown, it will be ‘business as usual’ for some of us. But some sections of the economy – including small and medium-sized businesses (SMBs) and people in the middle to low-income strata – will need a booster shot to bounce back. Immediate fund infusion or availability of targeted credit will help this consumer base rebound faster. Who do they reach out to for hassle-free loans? Digital lenders!
Transforming the financial services space
Sometime between 2012-2018, digital lending took off in India, disrupting traditional lending business models. Fuelled by a heady concoction of digital processes and data ubiquity, digital lending shifted power from the lender to the consumer.
Not so long ago, a prospective borrower for a housing or education loan went to a traditional bank, filled in an application form, and awaited approval. It was at the discretion of the bank to approve or reject the loan request.
Now consider a present-day example. You could purchase a mobile phone or an air-conditioner on an e-commerce site, and at check-out you could very well be prompted to avail an instant loan or convert into an EMI-payment. The lending product is now embedded into the consumer durable purchase journey as a form of unassisted digital lending - powered entirely by technology.
Increasing digital lending efficiency through technology
Traditional lending depended on a borrower’s credit history. Digital lending, on the other hand, relies extensively on data generated and provided by the ecosystem, suitably calibrated through machine learning (ML) and artificial intelligence (AI). This opens up the possibilities for borrowers with thin credit files, but legitimate needs, to avail credit.
The digital lending model of today is a platform business model, intermediating flow of money between the consumer and provider of capital. If platform business models are likely to win the digital wars, I am inclined to believe that technology platforms that drive digital lending will:
Model end to end journeys, and therefore support processes targeted at acquisition, onboarding, servicing and advocacy
Be ”API first”, integrated with the ecosystem at large
Enable data visualisation and derive intelligent insights from data
Why are these three aspects critical?
Remember, platforms with end to end business processes generate humongous volumes of data that can be exploited to derive great insights about credit behaviour. Data visualisation and intelligent insights can power superior digital experiences for borrowers.
Secondly, the digital lending business itself has evolved. Traditional lending players owned the entire value chain from production to distribution. Today, digital players are focusing on specialisation in parts of the overall digital lending value chain.There are lenders who are focused around specific customer segments or needs, players that are solely focused on distribution, or lenders exclusively focused on risk management and credit decisioning. All these players will come together to deliver an experience that is orchestrated on technology platforms that are API enabled.
Reimagining Salesforce for new lending models
Lenders such as DMI Finance, focused on credit decisioning, are already using Salesforce as the technology platform for digital lending. In addition to leveraging the core strengths that Salesforce has in sales, marketing, and service, DMI Finance are using it as a ‘technology platform’ for modelling processes. Today, a partner can capture data on a loan or customer and relay it to DMI Finance using standard Salesforce APIs.
Salesforce can be the motherboard - the ‘preferred’ platform technology - for unassisted lending. The acquisition of Mulesoft for API-based integration, and Tableau for data visualisation and insights, complemented by Einstein capabilities for AI / ML, make the Salesforce proposition for digital lenders even more compelling. I believe we will see an explosion of unassisted lending models in India, and Salesforce will be right there riding the wave.
With financial service CRM solutions from Salesforce, you can create personal experiences that build customer trust and loyalty. Find out how you can use Salesforce to engage with today’s connected clients, and exceed their expectations.
