There are stricter set or rules and regulations that modern money lenders and banks along with all other financial institutions must follow. This has resulted in raising the cost of borrowing by the NBFCs in particular. This means, NBFCs and private money lenders now have to focus on niche markets to make their hay and therefore it warrants them to sharpen their agility and streamline their business process.
As customers are the key elements for success and play a vital role for any business, financial corporations, therefore, need to differentiate them from their competitors. It is, for this reason, you will see that some companies offer better services and financial products than the others. When it comes to the private online money lending sources, you will see that few sites are more reliable and favored, such as https://www.libertylending.com/ than the others by the people.
This is because the financial corporations focus on different aspects that will make their services better such as:
- Developing innovative and new financial products
- Make the loaning process simpler with less documentation and
- Cater to low-income customers in the unorganized urban sectors.
Given such a scenario, it is essential for the NBFCs and private money lenders to adopt and know the ways in which their business models will be more successful and productive. The only and most obvious way seems to power their services with modern and most sophisticated technologies. There are several good reasons for it.
- Investing in implementing newer and better technologies will facilitate designing and launching of customized financial products more effortlessly.
- This will, in turn, help them to serve their customers in a better way by meeting their expectations that seem to be ever changing.
- New technologies will also help the NBFCs and others to lower the cost of their operation which in turn will encourage more and more customers to avail their services or products enabling them to increase their customer base.
- They will find that servicing their existing customers as well as the new ones is easier by de-risking their portfolio with better screening and accurate evaluation of eligibility requirements of the borrowers.
In short, it will help them to overcome the ever-increasing ceremonial credit penetration in this growing economy.
Catering to the new age customers
The customers of today are more tech-savvy than before. They have extensive knowledge about the market as they can use the best tools and technology to research on the financial market, compare different financial products and service levels and then make an informed and well-educated decision. They are now in a better position and have more confidence to make more justifiable newer demands when it comes to credit facilities and borrowings.
With such increased knowledge and enlightenment, it is not easy to cater according to their demands and needs without the proper use of technology to know their needs and demands in the first place. These technologies include different sophisticated and useful analytical tools, artificial intelligence and machine learning capabilities. These tools will help them to connect and cater to their new age customers in a better way with perfectly personalized products.
Avoid the risks
Most of the public sector banks today along with a few private banks are found to be badly hit and gripped by bad loans. This has been on the rise in the last few years which has, in turn, provided the NBFCs and private money lenders with a tremendous opportunity to step in the market easily and quickly with their offers perfectly designed keeping the business goal and growth in mind.
The growth in the NBFC segment can be summarized as:
- The sharpest rate in the last six years
- The credit growth CAGR is at 24.3 percent which is much higher in comparison to the 21.4 percent of the traditional banking sector.
Over the years, the dynamics between NBFCs, private money lenders and the traditional banks have changed rapidly. That means it is even more crucial for the NBFCs to bring in and use the best technology available to boost their business growth.
Benefits of investing in tech services
Implementation of tech services is a wise and productive investment by the NBFCs as it is guaranteed to provide high returns down the road. There are lots of reasons as to why the financial service industry may greatly benefit from technology.
- Customer data management: It will facilitate acquisition and management of customer data which is apparent and most significant to meet the risk factor more effectively. The public sector banks have a reduced risk appetite to lend money because they are more concerned about bad loans, NPAs, and mounting debts. Technology will help the NBFCs to acquire and target these applicants rejected by the leading commercial banks apart from the general populace in the rural areas. This will create a huge opportunity for them to have a larger customer base and expand their business further. Technology will help them to analyze and leverage such data to make better lending decisions.
- Customized products: In order to reach to their target audience, financial corporations need to draw up better and lots of strategies constantly. One such is to make their products customized. Use of technology once again will allow them to think over and beyond traditional home loans, personal loans and car loans. Their tailored and creative products will cater to the needs of small business owners, low-income farmers and even people with bad or poor credit.
- Reach and expansion: Technology will help them to be flexible and provide more value to their customers that will not only increase their reach but will also help in further business expansion as well. Technology will help them to send automated messages that are well targeted and provide more efficient services with enhanced personal access to the customers.
With the lower cost of operation and a better personal relationship built with the customers, not investing in technology will be unwise. Technology will ensure better utilization of manpower and available assets in less time and using fewer resources.