The BFSI sector currently focuses primarily on Bureau data to underwrite customers. However, close to 400 million Indians lack proper access to credit because of low bureau scores. To know more about the market-leading AI-ML-based alternate data solutions, Rashi Aditi Ghosh of Elets News Network (ENN), had a conversation with Nageen Kommu, CEO, Digitap.
What is the purpose being solved by Digitap?
Digitap is an early-stage tech start-up dedicated to developing cutting-edge Artificial Intelligence (AI), Machine Learning (ML), and compliance-related digital solutions for organisations in the BFSI industry. We assist BFSI firms to employ AI/ML-powered big data to deliver a seamless and fully compliant client experience. This helps companies in both improving their risk management as well as reducing fraud. We provide BFSI businesses with solutions for credit underwriting and digital customer on boarding.
What is the differentiation brought to the BFSI industry by the brand?
The BFSI sector currently focuses primarily on Bureau data to underwrite customers. However, close to 400 million Indians lack proper access to credit because of low bureau scores. We are providing BFSI companies with alternative data sources and scoring models so they might underwrite these clients and reduce their Non-Performing Assets (NPAs). We have market-leading AI-ML-based alternate data solutions to assist our clients to reduce risk and increase user life-cycle value. We look at multiple data sources including bank statements, telecom, social media, e-commerce, employment, device data and location among others.
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How have the recent guidelines issued by the RBI on digital lending affected the Fintech industry?
The digital lending ecosystem has undergone tremendous growth since the advent of technological innovation, leading to the establishment of numerous fintech organisations that offer credit services. However, this expansion has given rise to worries about the borrower’s data privacy, unethical business practices by digital lenders, excessive engagement of third parties, and mis-selling to unsuspecting customers. Additionally, there have been a number of consumer complaints about digital lending apps charging excessive interest rates or engaging in fraud, among other things. The Reserve Bank of India released a detailed set of guidelines for digital lending in order to address this problem, and it has stipulated that digital loans must be credited straight to the bank accounts of borrowers and not through any intermediaries.
As Digitap is a listed TSP on the Sahamati platform, can you elaborate on the role played by the company?
Account Aggregators (AA) are RBI-licensed NBFCs that allow customers to consent to the transfer of their financial information from one financial institution to another. Digitap is a certified Technology Service Provider (TSP) that implements the Financial Information Users (FIU) module, enables the certification of the module, and offers analytics in addition to the raw data given by the Financial Information Provider (FIP). Digitap can connect to all AAs because it is a TSP. For FIUs, Digitap offers end-to-end solutions from a technical standpoint, leaving them to focus only on the pertinent paperwork. We also offer alternatives to AA for bank statement parsing solutions through net banking and PDF upload in an integrated solution module.
How is Account Aggregation (AA) triggering a UPI-like movement in the financial service space?
The next significant development would be information exchange through AA platforms following the implementation of UPI in India’s BFSI industry. Thanks to the AA ecosystem, users will find it easier to swiftly, safely, and consistently exchange their financial information. The process is user-friendly, and the users will have total discretion over the information they choose to provide. Moreover, the AA ecosystem will be embraced more quickly than UPI because the entire flow and process are modelled after the UPI payment flow to offer the user some familiarity.
Please elaborate on the role of data and analytics in the BFSI domain.
As the BFSI sector transitions from a product-centric to a customer-centric approach, data and analytics will play an increasingly important role in the industry. Financial institutions will rely on the availability of precise data to make decisions regarding a customer’s creditworthiness and the products that can be provided to them.