NBFCs need to focus on tech-driven innovations: Abhinav Arya, CIO, Shubham Housing Development Finance Company

Abhinav Arya

Digitisation has disrupted all the sectors and Non-Banking Financial Companies (NBFCs) are no different. To understand the new trends across the NBFC sector and the future course of action, Elets News Network (ENN) recently spoke to Abhinav Arya, CIO, Shubham Housing Development Finance Company Ltd. During the exclusive conversation, Arya said the NBFC is focussing on its digital landscape to the next level. He also said that that the company will be extending its cloud journey from cloud infrastructure to middleware systems and it will harness Fintech APIs like face match, Video KYC, e-sign technologies and amalgamate in our on-boarding process along with setting up a cloud based data lake.

1. What are some of the key trends in the NBFC space in India?

One trend observed is the mortgage ecosystem in India is gradually going digital. Technology acceptance and digital initiatives by the Government has disrupted the entire space, with key initiatives like property documents digitization and unique property ID allocation with geo coordinates. In addition, there is a growing trend of consumers searching online for loan options. And this is not limited to the tier 1 cities anymore. This will act as a catalyst to automate several offline processes and NBFCs will gradually compete with the Fintech firms in this domain.

Another key trend now is consumers mobile-first attitude. With low cost mobile phone options along with unlimited data plans, most users are now mobile. 90 percent of our new website visitors are through mobile. So, organisations need to have a mobile-first approach as well, with adaptive platforms and respond to requirements in a real-time mode. It is imperative that all products and services can easily be accessed by customers wherever they are.

2. What is the role of NBFCs in enhancing universal financial access?

NBFCs have played a huge role in fostering inclusive growth by enabling financial access to the unbanked, especially those working in the informal/unorganized economy. Owing to their strong customer relationships, knowledge of regional market dynamics, efficient recovery systems and customized services, NBFCs have worked to include non-salaried professionals, individuals, and traders in the formal lending system. Given that, NBFCs generate a considerable amount of economic activity, they also create employment in these regions. NBFCs are also promoting growth and driving entrepreneurship in the country.

3. What is your mantra to success?

Shubham was one of the early pioneers in the affordable housing space. We entered during a time when ‘Affordable Housing’ wasn’t the norm for a lot of players. This played to our advantage as we were able to spend time and better understand the market. We worked hard in realising our goal of driving financial inclusion amongst those in the informal income segment. We have a robust business model, with a strong focus on tech-driven innovations to elevate customer experience and help transform their quality of life.We have consistently focused on growing our loan portfolio, with new initiatives.We were one of the first organisations in India to move from traditional,document-based underwriting to customized credit programs for customers. We also have a laser focus on operational excellence.

4. How did you ensure business resilience amidst COVID-19?

With Covid-19 upending the way business is done, organizations’ BCP strategies were severely put to test. We fine-tuned our BCP strategy, and with minor modifications, ensured all our employees with active remote work access, capabilities. We used the time to innovate and launch some focused services such as a mobile helpdesk, WhatsApp-based communication and servicing channel, video conferencing-based personal discussion apps, amongst others.

More importantly, we realised the importance of being agile and resilient, and our technology investments and partnerships came good during the unprecedented situation last year. Our strategic partnership with Oracle is an example in this regard. We recently moved our core lending system ‘Finnone Neo’ by Nucleus Software, onto Oracle Cloud Infrastructure (OCI). Since moving to OCI, we have witnessed 2x improvement in application performance and 25% more cost savings vis-à-vis competition. Outcomes like these give us the impetus to sharpen focus on our core business and drive faster innovation, growth.

5. What is your growth strategy for the coming years? How important is technology in driving business growth?

Through our new age credit programs, we want to help build happy homes for people outside the formal income ambit – and do our bit to drive financial inclusion in India. Towards this, we look to technology to enrich our entire value chain, from customer onboarding to credit disbursement, enabling an end-to-end digital lending process.

Technology is central to our business growth strategy. As a company, we have consistently invested in modern technologies and this technology-first approach to business has helped us with robust credit decisioning and productivity improvements while enhancing customer experience. We are using technology more than ever and harnessing its benefits across the value chain of lead generation, customer onboarding, loan payment and collection.

6. What is your digital innovation roadmap?

We are focusing on taking our digital landscape to the next level. This will include disruption across dimensions. These will span sales focused mobility solutions to customer-focused servicing channels – including mobile apps, social media channels like WhatsApp – focused on delivering a unified experience across all channels to internal and external customers. Our focus will also be on extending our cloud journey from cloud infrastructure to middleware systems which can support the entire vision and enable the presentation layers’ applications to interconnect and interact seamlessly with the core systems.

In collaboration with the Oracle team, who are our trusted advisors, we are on track to transform our application experience for all stakeholders.

We plan to leverage artificial intelligence and machine learning (AI/ML) for predictive and prescriptive analytics in the coming months.This will equip us to measure individual customer insights and behaviour better, helping us serve them better.

We also have plans to harness Fintech APIs like face match, Video KYC, e-sign technologies and amalgamate in our on-boarding process along with setting up a cloud based datalake.

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