The Transformation of Lending – Are You Ready?

Nucleus SoftwareLending is transforming and digitising. Powered by technology that is rapidly evolving, and underpinned by customer demands that are growing each day, the lending landscape is exploding with new competitors popping up every day. Ably demonstrated by numerous success stories, FinTechs are exploring innovative business models, targeting new customer segments and redefining customer experiences. The future is getting more exciting with real-time processing, voice-based servicing and bot-based human-less transactions set to become a norm in the near term. 

Sudeep Verma
Sudeep Verma
SVP & Head Retail Lending Business, Nucleus Software

The end-to-end digitisation of business is only the starting point for this transformation. Have you reached this critical milestone and are you ready to gain the first-mover advantage and lead the market? 

According to a McKinsey report, while most banks are digitising parts of their business, many are dissatisfied with their progress or are unable to gain the expected benefits, especially in credit. Some of the reasons for this gap include legacy IT systems, lack of trust in automated decision making, insufficient cooperation across the organisation, limited data access and scarce digital talent.

In some cases, the dissatisfaction even results in the de-prioritisation of digital initiatives or the replacement of end-to-end initiatives with incremental changes. The bottom line is that organisations are losing out in the long-term. 

However, as the transformation wave continues to sweep the financial services industry globally, lenders need to retain their focus on digitising their businesses completely and be ready to profit from new opportunities. 

Paperless operations and multi-channel capabilities are not enough as they will soon become table stakes. There is a need to redesign complete processes end-to-end, keeping the customer perspective and future scenarios in mind. Credit decisions need to be ‘process-oriented’ instead of ‘person-dependent’, powered by data-driven insights and completely automated. 

As the lending ecosystem expands and evolves, banks’ credit processes should be able to plug-in easily to offer an integrated experience. The personalisation of loan products and services to suit individual customer needs should be easy, fast and cost-effective. The systems should be flexible enough to scale fast and address evolving compliance needs while co-existing perfectly with other systems as the business expands. 

A number of innovative financial services companies have adopted this approach to power their digital transformation, an approach which resonates with their focus on customer convenience, speed, flexibility, and future-readiness. For example, Shubham Housing Development Finance – an innovative lender focused on providing affordable housing finance to families with informal incomes – reduced loan application processing times by 72 percent and reduced time for loan approvals by 50 percent by leveraging digital processing. Another firm, Roha Housing Finance, is able to offer 50 percent faster end-to-end housing loan processing as compared to the industry benchmark along with a ‘customer-first’ approach and innovative way to assess customers’ creditworthiness. 

These examples demonstrate that with the right vision, dedicated teams and the use of the right technology, digitisation initiatives can deliver outstanding benefits. 

Clearly, advanced technology has a fundamental role to play in helping firms achieve their digital ambitions and realise the vision of the ‘digital lender’. This vision is reflected in the latest version of our market-leading lending solution, FinnOne Neo, which comes with a range of new capabilities that further enable lenders to digitise their business and profit from it. In addition to enriching the solution’s comprehensive business functionalities even further, our focus has been on providing enhanced digital capabilities, improving scalability and delivering greater flexibility. 

With FinnOne Neo, lenders can extend the customers’ digital experience from front-end to back-end. The extensive API vault, now comprising more than 250 ready APIs, enables seamless and quick integration with the fast-evolving lending ecosystem. New straight-through processing (STP) experiences, voice-assisted loan servicing, split loans, geo-tracking, and integrated email approvals are some key additions in the new release. 

We have continued to enhance our unique extension layer, FinnOne Neo Xtend, which enables lenders to add custom capabilities based on their business, regulatory and customer needs easily. FinnOne Neo 4.0 also helps lenders to rapidly assemble and launch innovative product ideas and lead the market. FinnOne Neo, the 10-time winner world’s best-selling lending solution, provides lenders with much-needed business agility and end-to-end integration capabilities, which provide an edge to capture the market.

(Views expressed above are a personal opinion of the author)

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