India’s Digital Lending Landscape Post COVID-19
Digital lending is picking up pace in the Indian banking landscape. Even though traditional lending methods are still going strong in many country regions, the digital shift is happening rapidly. A traditional lending process requires the applicant to visit a branch, stand in queues, fill out large application forms manually and submit numerous document proofs. And even after doing all this, the loan sanctioning could take weeks. In contrast, digital lendinghelps people to complete the loan process in 15-20 minutes and approves the loan in a week.
In the year 2020, COVID-19 hit us while we were unprepared to face the challenges it had to offer. Staying home became the primary measure for safety, and the only way to access financial services was through laptops and smartphones. Owing to the restrictions imposed by the pandemic, many banks and financial institutions (FIs) started modernizing their infrastructure to harness financial services digitally much faster than ever before. This new wave of digitization has accelerated the growth of digital lending services across the country. Banks and FIsthat offer lending services have already started the upgrade to digitize their services to serve their customers better.
How easy would it be if one can finish their loan applications-digitally in just 15-20 mins? Customers can complete the process in one sitting seamlessly. You don’t need to visit the bank for any verifications or submitting document proofs. With the use of sophisticated lending applications and software, all procedures are executed with absolute precision.
Cutting-edge technologies like artificial intelligence ensure fraud prevention, and hence you don’t need to worry about your money being transferred into your account safely.
The new normal is going to be a world largely dependent on technological innovations. The fintech industry is already in boom and better days are coming ahead with newer, smarter, and efficient technologies. All the end-to-end banking operations can be streamlined by using digital technologies, eliminating the need for manual work. Traditional banking is still going strong in many major cities of the world but a digital revolution is happening rapidly. The pandemic acted as a catalyst to the evolution of digital banking.
Here are some key changes that will happen in the post-COVID era
1. A Digital first approach to every process:
We are already striving to push the procedures in digital format to increase the ease and efficiency of processes. Therefore, the day is not far when the majority of the banking operations will be carried out online.
2. A world where hard copies wouldn’t be needed:
With innovative initiatives like Digi Locker and Account Aggregator ecosystem to verify documents online, paperless verifications will be encouraged. People wouldn’t have to worry about documentation carrying and neither do the bankers, since everything would be accessible online!
3. Smartphone banking will be encouraged
Millennials are already keen on using smartphones and mobiles for banking operations and the pandemic has encouraged more individuals to opt for smartphones to carry out banking. Banking on smartphones will be a primary thing post-COVID-19. Your bank account will no longer be required to be attached to 1 particular branch of the bank.
4. Hike in digital lending
Digital lending is easy, convenient, and fast. When COVID-19 regulations were in place, stepping out for a loan wasn’t a viable option, and people started embracing digital loans for swift cash flow. Digital lending is up for promising growth in the upcoming years.
5. Better security
With numerous financial institutions and customers adopting digital banking, security will be a crucial aspect. Advanced technologies like AI will enable fraud prevention and stringent verifications will minimize the threats to privacy.
With multitudes of benefits over traditional lending, digital lending is not just here to stay; it’s just getting started! In the new normal, lenders will be facilitating effortless and efficient ways to provide digital loans to customers. In addition, advanced technologies like AI and Machine Learning (ML) can significantly boost the sales of lending products by an in-depth analysis of customer’s behavioural traits, income tax history, credit card payments, and other records.
With the power of financial APIs, multiple microservices that are often required for banking procedures can be collected and placed under one platform. These financial APIs aid banks and FIs to expedite banking for customers and simplify frequently used processes such as — Account opening, Fetching Bank statements, Facilitate Digital signatures, Customer Queries and many more!
Banks and FIs who are embracing digital lending as a service are definitely adding value to their customers and also generating better business opportunities for themselves. The future is digital and by the looks of it, the change is happening fast due to the pandemic. Lenders need to understand the change and craft a sublime customer experience for their customers. A smooth, frictionless lending process is bound to go a long way in the upcoming future of the BFSI market.