Indian consumer behaviour is evolving, and financial institutions need to innovate to keep up. With increasing social media and smartphone penetration, the Indian customer today is tech-savvy, highly demanding, and experience-focused with a need for instant gratification.
The days of spending hours filling out an application form with hundreds of fields and providing reams of documents are over. Large consumer-facing companies that struggle to adjust to these changes are getting left behind in the race to innovate and digitise.
To face the challenge of fostering a strong enabling environment for change, banks and other financial institutions have started exploring new technologies to gain competitive insight, especially in emerging markets where access to the Internet & smartphones is driving new market trends.
Big data applications can be used to acquire unique readings on behavioural variables derived from the usage of social and mobile data. It allows a brand new approach to risk by clearly defining the propensity – or “character” – of an individual to repay their advances. Financial institutions in developing countries across the world including banks, credit card issuers and P2P lenders, are restructuring and streamlining their processes to better respond to an ever-changing environment. In India specifically, these new sources of data can be a game changer for millions of people who are currently not visible to financial institutions but potentially good borrowers.
Innovative solutions from disruptive financial technology companies use advanced machine learning techniques and strong model-building expertise to offer new and alternative ways to automate and analyse data, enabling credit decisions to be made in seconds. These Big Data & Machine Learning patented technologies mainly rely on opt-in data that is only available through the consent of the consumer. This data provides behavioural analytics from Social, Mobile and other digital sources. And with results completely automated and immediately returned through APIs within seconds, this technology can now create frictionless experiences for customers both online and offline.
In emerging markets, financial institutions are embracing modernisation and digitisation as necessary steps to continue to scale and remain competitive. These innovative uses of financial technology will ultimately greatly benefit consumers and other stakeholders.
The author Abhinav Haldia is Country Director-India for Lenddo