Emerging Tech Trends in the NBFC Space: Exploring the Potential of AI, IoT, Chatbots, and Beyond

In the dynamic landscape of Non-Banking Financial Companies (NBFCs), emerging technological trends are shaping the future. At the forefront of this revolution are Artificial Intelligence (AI), the Internet of Things (IoT), chatbots, and more. The Elets 15th NBFC100 Tech Summit held on 11th October 2023 in Mumbai became a melting pot for such discussions, where industry experts gathered to deliberate on the potential and implications of these advancements.

The Evolution of AI: From Artificial to Augmented Intelligence

Roopesh Chandran, Chief Operating Officer, BoB Financial Solutions Ltd., challenged the conventional view of AI at the summit. He emphasized the evolution from Artificial to Augmented Intelligence, where AI no longer stands as a mere replica of human intelligence but as an amplifier of human capabilities. The shift towards Augmented Intelligence marks a significant milestone, especially evident during the COVID period when technological advancements accelerated at unprecedented rates, condensing years of progress into months or even days.

Augmenting Human Capacity: AI in Modern Times

The classic image of AI as an independent autonomous system is giving way to one where AI supports and extends human abilities. For instance, responsive lighting systems in modern hotels, once considered a novelty, are now part of our daily lives, showcasing how AI-enhanced technologies have transitioned from conveniences to necessities. This advancement is fueled by risk-taking investors and an entrepreneurial spirit that has grown robust in recent times.

Navigating a Diverse Landscape: AI’s Role in a Multifaceted India

India presents a complex terrain for deploying augmented intelligence, with varying levels of sophistication and consumer needs across its many ‘Indias.’ Hence, AI adoption must be customized to cater to the diversity within the country. In finance, underwriting processes have shifted from manual document analysis to digital data scrutiny, where AI tools process unconventional data streams, such as social media activity, to evaluate an individual’s creditworthiness. This illustrates the challenge of managing diverse data while retaining the indispensable human element in interpretation.

Consistency vs. Personal Touch: Finding the Balance with AI

While AI has shown its efficiency in ensuring consistency in tasks, there is a need to maintain the human touch. AI must strike a balance between standardization and personalization, particularly in areas sensitive to human nuances, such as language interpretation. This balance is critical to ensure that AI tools are accessible and valuable without becoming overly complex or losing the personal touch that characterizes human interactions.

Embracing Augmented Intelligence: The Future of AI in Customer Service and Underwriting

Hardik Thaker, Deputy Vice President & Head Digital, Analytics & BI, Aadhar Housing Finance, focused on AI’s transformative role within customer service and credit underwriting. He identified customer service as an area ripe for AI integration, where it can enhance operational efficiency and customer satisfaction despite high turnover rates common in call centers. Thaker also highlighted AI’s role in introducing objectivity in credit underwriting, traditionally beset with subjectivity, and its ability to ensure consistent and fair credit assessments.

Generative AI: Transforming Customer Interactions

Thaker also touched upon the remarkable use of generative AI in customer support, citing Bank of America’s efficient 20-person call center serving 4 million customers. This integration translates real-time customer inquiries into system-answered queries, exemplifying the vast potential of AI beyond common uses in chatbots and image generation. Moreover, he acknowledged India’s growing global influence in financial AI, with Western companies seeking to emulate India’s advancements.

Despite these positives, Thaker cautioned about AI’s potential to displace jobs, urging industry leaders to develop strategies that incorporate AI into core services while also facilitating the workforce’s transformation.

The Future of Financial Services with Generative AI: Insights from Gautam Bandhyopadhyay

At the cusp of a transformative era, Gautam Bandhyopadhyay, CEO and Co-Founder of Trustt, shared his insights on generative AI in finance, positing it as a democratizing force in financial capabilities. Discussions at a recent Forrester conference suggested that although generative AI is in its experimental phase, a surge in adoption is anticipated as the technology becomes more accessible.

Bandhyopadhyay highlighted the affordable and practical opportunities for medium-sized NBFCs and banks through AI, aiding in product discovery and customer support enhancement. In customer support, AI can streamline interactions and provide immediate, contextual responses, significantly improving the customer experience.

In sales assistance, AI can manage complex data and customer interactions, a task especially challenging in a multilingual country like India. However, Bandhyopadhyay exercised caution regarding AI’s use in credit underwriting due to the need for transparency and explainability in regulatory environments. Nonetheless, he remained optimistic about the ROI that generative AI could offer in customer acquisition, service, and sales support.

Looking ahead, the implication is clear: as AI continues to evolve, so too must the financial services industry. Generative AI stands ready to redefine the customer experience, operational efficiency, and the overall landscape of financial services. The ROI, according to Bandhyopadhyay, is not only evident but potentially game-changing, particularly for mid-sized entities in the financial sector.

To sum it up

The insights from the Elets 15th NBFC100 Tech Summit reveal a clear trajectory towards augmented intelligence, with AI revolutionizing customer service, underwriting, and various other facets of NBFC operations. As AI continues to evolve, it is crucial to balance its capabilities with human oversight and empathy, ensuring that financial services remain accessible and equitable. The future beckons a world where AI not only replicates human tasks but significantly enhances human efforts, driving efficiency and innovation across the financial sector.