THE Banking, financial services and insurance (BFSI) sector has been the hotbed of innovation and has gone through a major transformation, thanks to the rapid adoption of modern technologies in the past few years. However, the sector has seen its share of challenges as well. While banks have streamlined operations such as onboarding new consumers, credit risk monitoring and its back-end loan processing through conversational artificial intelligence (AI) solutions, loan recovery is one segment where cumbersome manual handling is still in practice. Rezo.ai, a homegrown conversational AI startup, is trying to change that.

This Noida-based firm, founded by Manish Gupta and Rashi Gupta in 2018, has developed an AI-driven product, called ‘Collection Product’, to help non-banking financial companies (NBFCs) recover loans efficiently. The pilot phase has already helped a financial services leader — with a book size of more than $10 billion and a customer base of more than 15 million — achieve a 10% jump in collection efficiency, said Manish Gupta, co-founder and CEO, Rezo.ai. “Our collection product will prove to be virtuous for NBFCs that suffer from often taxing and cumbersome manual handling of loan recovery and recurring default rate.”

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According to Gupta, the NBFC sector needs innovative automated solutions. Since the Covid pandemic, the default rate in NBFCs has increased two-fold. The tightening of regulatory norms around using loan recovery agents made it necessary to have an effective communication tool to remind borrowers of their delinquency in their preferred language and dialect and make the process hassle-free for the lender and the borrower. Additionally, real-time integration and usage of structured and unstructured data are challenging problems being faced by all traditional lenders.

Because of the dynamic customer experience (CX), there is a need for real-time data processing and a personalised approach. AI and analytics are helpful in filling such gaps, said Gupta, adding, “Rezo’s experience in delivering large volumes of AI-powered voice bots and analytics solutions has come in handy while designing the collection product.”

Speaking on the idea of automating and augmenting loan recovery, Rashi Gupta, co-founder & chief data scientist, Rezo.ai, said, “The idea was to find a personalised and innovative way to recover loans from the borrowers. We found that borrowers have varied reasons for missing payments – from lack of funds at the moment to forgetfulness to wilful payment default. Addressing each reason required using a different type of customer conversation and creating a unique customer journey. Our collection product fills that same need gap for the NBFC sector.”

Rezo’s collection product offers AI-driven human-like conversations with the ability to handle more than 10 languages and over 500 dialects. Being an auto-engage product, it analyses every borrower’s profile and payment delay reasons to classify them based on the future risk of missing payments. By analysing the reasons behind missed payments, it can predict the delinquency pattern of borrowers. Rezo’s AI product then devises different types of innovative and tailored customer conversations and creates a unique customer journey for each and every borrower.

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This AI-powered personalised approach to loan recovery fills that same need gap in the loan collection segment. AI and ML empower lenders to distinguish between conventional and behavioural data.

Conventional data are of little use in analysing the borrower’s real capacity to pay when compared to behavioural data which gives more insights.