The modern society is experiencing a transformation in technology, and the non-banking financial companies (NBFCs) are no exception. Currently, NBFCs are using cutting-edge technologies like artificial intelligence (AI) and the Internet of Things (IoT) to reshape their operations, enhance customer experiences, and navigate the dynamic financial terrain with confidence.
Speedy Operational Efficiency
Imagine a world where mountains of paperwork are replaced by efficient algorithms. Loan applications, credit assessments, and document verification can be automated with the help of AI in today’s world. This not only reduces the processing time but also minimizes the chances of human error. NBFCs can leverage data-driven efficiency to broaden their reach, access untapped markets, and grant faster approvals. This mutually beneficial arrangement benefits both institutions and borrowers.
AI is not only about getting things done faster – it’s about creating deeper connections. Take the example of an AI-powered chatbot that can work as your 24/7 financial assistant. It understands your needs and preferences through data analysis, further offering personalized support, answering questions, and recommending tailored solutions. This human-like, always-on service fosters trust and loyalty, ensuring customers feel seen and valued. And with more conversations, it can get deeper data insights it learns and fine tunes its responses to ensure users get efficient recommendations.
Proactive Risk Management
AI is a game-changer in the financial industry. By leveraging predictive analytics fueled by historical data and real-time insights, AI can model multiple consumer, market and macroeconomic trends to proactively identify potential defaults, and even detect fraudulent activities before they cause any harm. By taking a proactive approach, NBFCs can strategically allocate resources, effectively manage risks, and ensure the safeguarding of their financial well-being.
The Interconnected Ecosystem
Apart from AI, the Internet of Things (IoT) has also permeated into the NBFC ecosystem. The Internet of Things (IoT) is an extensive network of interconnected devices, machines, and objects embedded with electronic components, software, sensors, actuators, and connectivity. This enables seamless data transfer and connection over a network.
Picture your loan assets, for example, your car, being equipped with sensors that provide valuable data on usage patterns and maintenance needs. NBFCs can leverage this sea of data to introduce innovative financial products such as pay-per-use financing, enable remote asset monitoring, and streamline automatic insurance claims for damaged equipment. This creates a mutually beneficial scenario for NBFCs, customers, and asset manufacturers alike as good behaviour is rewarded with better economics for everyone involved.
Intelligence at the Core
The integration of AI and IoT goes beyond being a mere technological upgrade. It signifies a fundamental shift in the way NBFCs operate as they evolve into intelligent financial institutions. This transformation empowers them to navigate complex landscapes, personalize customer experiences, and proactively manage risk with foresight. Therefore, NBFCs are leading the way in financial innovation, pushing us towards a future where financial services are easily accessible, tailored to individual needs, and powered by intelligence.
The NBFC and MSME sectors have embraced digital technologies, opening up exciting new opportunities for growth. The use of digital lending, AI and ML, and digital payment systems has transformed how businesses make credit decisions, carry out transactions, and analyze data. This technological revolution is paving the way for efficiency and success in these sectors.
The NBFC and MSME sectors have a promising future ahead. By embracing digital technologies, they can unlock countless opportunities for growth and development. However, recognizing the importance of adopting digital technologies entails taking a comprehensive approach to address the challenges that come with their use.
This article has been authored Anshul Agrawal, CTO, Branch International.