The year 2023 is predicted to bring a significant shift in the global economic landscape, with businesses facing increasing pressure to adapt to changing consumer behaviors, evolving technologies, and shifting regulatory environments. As a result, financial strategies that once worked for companies may no longer be effective, and businesses will need to embrace innovation or risk being left behind.
Innovation will be key to survival in 2023, with companies needing to think outside the box to stay competitive. This may involve investing in emerging technologies, such as artificial intelligence, blockchain, and the Internet of Things, to streamline operations and enhance the customer experience. It may also involve developing new products or services that meet the changing needs of consumers or expanding into new markets.
However, innovation alone is not enough to ensure growth and success in 2023. Companies will also need to focus on implementing sound financial strategies that balance risk and reward, optimize cash flow, and ensure long-term sustainability. This may involve diversifying revenue streams, managing debt effectively, and prioritizing investments that provide the greatest return on investment.
Anjana Rao, Chief Strategy Officer, IndiaFirst Life Insurance, discussed the evolution of the industry’s approach to digitization. “Around five to six years ago, there was a push for paperless processes and solutions that would enable field agents to operate more efficiently,” she explained. “But now, the focus has shifted to smartifying and making solutions more intelligent. Field agents need support from their organization, such as lead scores that indicate the propensity for conversion and personalized content based on customer profiles. We can also provide suggestions for subsequent best actions to take with each lead. Ultimately, it’s about identifying the interventions required to increase conversion rates, based on the specific circumstances of each case.”
Kiran Joshi, Head of Analytics at Edelweiss Housing Finance Limited, discussed the evolution of analytics during an interview. According to Joshi, “Analytics has been around for a long time, and the oldest analytical function was probably the simple average. However, it has become more advanced over the years, especially since the beginning of the 21st century, when computing power and storage costs decreased, and the democratization of data science occurred. Analytics has moved towards replicating human intelligence functions via machines, including tasks such as vision, language, and creativity. While there are machines like ChatGPT that can write poems, there are also other tasks like masking information that can be done without human intervention.”
Joshi also talked about the credit lending problem, which is the oldest problem that has been solved by analytics. He mentioned that the Do or Die problem in lending is to crack the credit lending problem. It is a problem that has been solved a long time ago, and the earliest logistic reference was about 100 years ago. However, the adaption of scorecards in real life in the Indian scenario has been slightly better in the last five years, but it was pathetic before that. There are many problems associated with credit lending, including the credit versus risk conflict and the conflict of interest. It is often difficult to manage these conflicts and convince people to change the way they do business.
Shiva Kumar Nandipati, the Chief Digital Officer at Fedfina, expressed his desire to share real-time experiences from the NBFC (non-banking financial company) sector in order to add value to the discussion. He focused on the importance of digital innovation in sales and service speeds. In terms of sales, he discussed the advantages of using digital marketing, which offers greater reach with fewer resources and specified targeting. “This allows for a better return on investment and more efficient sales acquisition. He also discussed the benefits of digital innovation in the service sector, such as account openings, where even the Reserve Bank of India has allowed for video KYC.”
“He gave an example of a product called Gold On, where customers who had taken a gold loan were eligible for top-up loans due to the recent increase in gold prices. However, reaching out to these customers through SMS or email would not have been effective due to their demographic nature. Instead, they used a customized voice blast which led to 4 times more top-ups happening in a month compared to the average. He emphasized that digital innovation is no longer a luxury, but rather a necessity for businesses to succeed.”
Rupam Mazumdar, the Head of Digital Lending at Edelweiss Retail Services, discussed the impact of the pandemic on their business and the changes they made to adapt to the new normal.
Mazumdar emphasized “The importance of bridging the gap between the company and the customers, both in terms of selling and post-selling processes, including collections. The company introduced innovations such as sending links to customers for collection actions, which resulted in an increase in the adoption of mandate registration. Mazumdar also stressed the importance of automating processes, including customer profiling and credit underwriting, through APIs and other data sources. However, he cautioned against blindly integrating everything without considering Opex-driven efficiency and budget constraints. Mazumdar explained that the company designs each product with a different customer segment in mind, and they prioritize making the sourcing-to-dispersal journey smooth and automated to minimize time and avoid hampering collections.”
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