Transforming Lending with the Power of Cloud

Sarbpreet Anand
Sarbpreet Anand
Global Head – Cloud Business,
Nucleus Software

Businesses all over the world are taking advantage of the tremendous benefits that cloud technology brings. In fact, the global market for cloud computing is expected to grow from $272 billion in 2018 to $623 billion by 2023, according to an industry report.

The cloud market in India is also expanding quickly and expected to grow to $7.1 billion by 2022, as mentioned in a NASSCOM report. The financial services industry, powered as it is by IT, is rapidly adopting cloud technology. The disruptive wave of digital transformation that is sweeping the financial services segment draws a lot of its power from the cloud.

FinTechs are founded on the unique combination of advancements in technology and innovative business models. As startups, the FinTech companies have benefitted greatly from the agility, flexibility, modularity, scalability, security and cost optimisation offered by cloud technology.Nucleus

Let us take a look at how some of these translate into supporting the critical business drivers in lending today.

1. Business agility: With the customer driving the agenda for experience, lingering volatility in economic scenarios and prevailing dynamism in the business landscape, lenders need to be agile to align quickly to the evolving market needs. New products have to be anticipated, designed and launched in minutes and not months. Any changes in the regulatory regime have to be adhered to ahead of the timelines.

2. Personalised customer experience: We are long past the days of ‘one fits all’ approach. Today’s customers expect to be offered products and services tailored to their specific needs, delivered at a time and place they choose, using their preferred channels. Customers today are offered numerous options to choose from. Personalised and unique experiences across the loan lifecycle can be used as a source of competitive advantage.

3. Lean model: As profit margins are squeezed, focus shifts to leaner operations and cost optimisation. While the FinTech firms adopted this approach due to the resource constraints, the success of this model has emphasised the need even for the larger organisations to revamp their processes and benefit from the digital and lean model. Considerations include API based external interfacing, integration of disparate systems, seamless adoption of new channels, streamlining of workflows, removal of paper-based processes and continual fine-tuning of the overall design.

4. Real-time processing: Customers today expect their loan application processes to be simpler and easier, with approvals coming through in hours. In many instances, the trend has now shifted to instant approvals and that too without compromising on the comprehensiveness of the credit assessment. With an entirely digital process, not only is each customer interaction inherently faster but the speed of processing also unlocks additional capacity without requiring any more investment. Hence the lenders can process more applications and grow the business further without increasing costs.

5. Intelligent decisions: The explosion in the growth of data has opened up opportunities for lenders to integrate data-driven insights into their business processes to improve the effectiveness of areas such as marketing, customer acquisition, servicing, cross-sell, credit risk management and collections.

The success of new-age lenders has proven that the combination of digital operations powered by cloud technologies has helped them attain their ambitious business objectives. Many of them have established benchmarks for speed, high-quality customer service and increased transparency, which help set them apart in a crowded market place.

For example, Quicken Loans, an innovative digital mortgage lender, which had less than one percent market share of retail mortgage originations in 2008, rapidly grew, reaching 6 percent in 2017 and went on to overtake the third largest Bank, Wells Fargo, to become the leading direct-to-consumer mortgage lender in the United States.

At Nucleus Software, we have a deep understanding of the complex requirements of the banking and financial services industry because we have spent more than three decades helping some of the world’s most innovative financial services companies leverage advanced technology to achieve their business objectives.

We combined our business and technology expertise to create FinnOne Neo, the 10-time winner world’s best-selling lending solution, which is helping companies shape the future of retail and corporate lending worldwide. The solution, which can also be deployed on the cloud, covers the entire loan lifecycle from origination to servicing and collections across multiple channels and supports a comprehensive range of loan products.

(Spl. Note: Views expressed are a personal opinion of Sarbpreet Anand, Global Head – Cloud Business, Nucleus Software.)

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