May 28, 2021 ●15 min read
Innovative Technology-Enabled Services
Technology has been the key player in spurring innovation and growth of financial services. Non-Banking Financial Companies (NBFCs) rely widely on innovative technology to expand their customer base. The new technology has helped the companies to come up with e-KYC, digital payments, cashless transactions, creating digital identity of their customers which also goes hand-in-hand with the government's initiative towards a cashless economy.
The technology driven approach has helped to cut down the manual work of the employees and boosted the automated processes which has vastly improved the accessibility. Technology has completely changed the scenario of lending business by making it cost-effective, efficient, quick and hassle-free.
Innovative technology has opened the gates for the unserved or underserved sectors. MSMEs (Micro, Small and Medium Enterprises) have remained neglected for a long time but now NBFCs have come as a blessing for them. Innovative technology has made it possible for rural and suburban areas also to take advantage of these lending companies. The companies can take well-informed decisions and customers can also avail an instant personal loan at the best rates in minimum time.
Some of the innovative technology Non-Banking Financial Companies are adopting are as follows:
Financial market is a very sensitive and regulated market. A substantial amount of data is involved with the business of lending and borrowing, which needs in-depth analysis and integration and it also needs to be customized according to the customer’s needs. If we do all this work using old traditional ways, it will become a hefty task which will take days and sometimes months of human effort. Use of cloud computing has made this task quite easy. Cloud computing is not only cost effective, it is easily available and quick to implement. So, cloud computing has become the need of the hour and most of the financial companies have adopted this technology.
With the expansion of digitalization, the financial companies need to upgrade their security levels for the customers. Biometrics identification system is the answer to the question of security. eKYC, Attendance System, Payment Authentication, Merchant Payment System and Micro-ATMs are some of its widely used benefits.
With the use of aadhaar linking to the bank accounts, eKYC of the customers can be done instantly by banks and other non-banking financial companies using the fingerprints or IRIS, which helps in reducing frauds.
To curb the fraudulent transactions and win the customer’s trust, banking and non-banking companies are using Biometric devices to authenticate the payments. Payments through digital wallets and mobile apps are becoming popular. By including biometric techniques, banks are promoting a reliable payment system.
Accessibility of banks is scarce in rural and suburban areas of our country. To provide banking services to the population of these areas, banks are opting for merchant payment systems, which is made possible through aadhaar-enabled biometric merchant applications such as BHIM Aadhaar Pay.
Micro-ATMs are improved versions of Point of Sale devices. By using fingerprints or IRIS, you can make payments to merchants or vendors. These Micro-ATMs are connected to the bank’s core system.
Numerous NBFCs are using the power of Artificial Intelligence in their daily affairs. Artificial Intelligence has helped in making such smart machines which can do tasks normally done by humans. Artificial Intelligence provides a massive amount of data, making processing of data easier in a minimal amount of time. It also helps in making the processes automated and accurate.
Chatbots and robo-advisors have made the process of various services so easy and hassle-free to avail that most of the NBFCs are availing the services of chatbots and robo-advisors. They can interact with customers and prospects, help in round the clock customer service and even in the employee-related services.
Automation is another innovative technology widely used by NBFCs. Which has contributed in speeding up the lending processes and has brought consistency in decision making. Now, we can get the real time data, that is all because of automation. Customer and service provider get the information of the transaction that is happening in the real time.
So, we can say that innovative technology has brought a remarkable difference in the world of financial services, be it banks or non-banking financial companies. The difference has come only for good and improvements in the systems can be seen clearly.
Blockchain is another innovative technology which has the potential of minimizing financial frauds remarkably. Using blockchain, multiple parties can access the digital information simultaneously from totally different places. Blockchain has a unique feature that it is unalterable. We may call it the future of the lending industry. It helps in reducing human errors and promoting transparency. A single view of the customer can be created using blockchain and e-KYC can also be done.