In the world of business, non-banking financial companies (NBFCs) play a vital role by providing loans and advances to businesses and individuals. These financial institutions cater to the needs of those who do not have access to banking services.
In India, the NBFC sector is growing at a rapid pace, and it has filled the gap created by the traditional banking system. The main reason for the popularity of NBFCs is that they are flexible and customer-friendly, offer loans at lower interest rates, and have a shorter turnaround time. Also, using NBFC software further streamlines the process and makes it easier for both the lender and the borrower.
NBFC Software: An Overview
With technological advancements, NBFCs are now using NBFC software to automate their operations. This software is a comprehensive solution that helps manage the entire lending process from start to finish, and it streamlines the workflow and makes it more efficient.
Before we learn about the features and benefits of NBFC software, let us first understand what an NBFC is and its role in the economy.
What is an NBFC?
A non-banking financial company provides financial services but does not have a banking license. These companies are registered under the Companies Act, 2013 and are regulated by the Reserve Bank of India (RBI).
The main activities of NBFCs include lending, leasing, money market activities, and investment in shares and securities. They also provide other services such as hire purchase finance, bill discounting, etc.
Role of NBFC in the economy
NBFCs help grow and develop the economy by addressing the financial needs of businesses and individuals. Some of the largest NBFCs in India are Bajaj Finance, Aditya Birla Finance Limited, Shriram Transport Finance, Mahindra Finance, and so on.
As of January 2021, there were more than 9,500 registered NBFCs in India. In 2019, the activities of these companies exceeded Rs. 5.4 billion which is about 25% of the banking sector’s assets.
In the coming years, the NBFC sector is expected to grow rapidly. This is because of the growing demand for credit, favourable government policies, and the easy availability of capital.
Why do NBFCs need software?
The software for NBFCs plays a vital role in the overall performance of the lending company. It helps you with all processes right from customer acquisition to customer servicing. Below are some benefits of using NBFC software:
Faster loan approvals
With the help of NBFC software, the loan processing time can be reduced. All the documentation and information will be in a digital format that can easily be accessed by the lender. The software helps automate the process, which will benefit not only the lenders but also the borrowers, who will get their loans approved faster.
Improved security
Security is a crucial aspect of NBFCs, and this software helps to maintain robust security by providing excellent encryption, which defines data accessibility, thus resulting in operational transparency.
Better risk management
An NBFC software allows you to track all the loans and their repayment history. This data can help identify defaulting customers and take appropriate action. The software also helps you set early warning signs for identifying the risks.
Increased customer satisfaction
Customers can easily access NBFCs software, which speeds up delivery times and increases customer satisfaction. It also notifies customers of upcoming payments via e-mail and SMS. This software’s multi-user system provides customers quick access and ensures NBFC operations transparency.
Features of NBFC Software and its Critical Role in NBFCs
NBFC software assists NBFCs in developing a robust operational infrastructure that ensures their database is managed smoothly. The following are the key features of NBFC software:
- The best software for NBFC should be user-friendly and highly versatile. It should have a simple user interface that can be understood by people with little or no technical knowledge. The software should also be able to handle a large number of transactions without any problem.
- Non-banking financial software helps generate high-quality leads for your lending business. It should have a robust management system that can track and manage leads effectively. A genuine software will be able to efficiently identify and follow up on finance leads.
- The software should be able to simplify complex processes such as loan origination, loan servicing, and collections. It should also assist NBFCs and their customers in calculating late fees/fines, providing information on unpaid instalments, tracking insurance, and generating a text file for loan payments in the bank format.
- If you want to identify trends and patterns in your loan data, then your NBFC software should have reporting and analytics features that will help you understand your loan portfolio better. With this feature, you can make better decisions about your lending business.
- You will be able to monitor the performance of your marketing campaigns and reduce order processing time with good NBFC software. With the help of the software, you should be able to identify which marketing campaigns are working and which are not.
- A good NBFC software can be customised to meet the user’s needs. Personlaisedloan options and custom artificial intelligence algorithms assist clients in obtaining services with the least amount of hassle.
The Bottom Line
Given current market trends and customer preferences, a company’s failure to adopt cutting-edge technology can put it in a stressful situation. Automation allows them to avoid potential delays and provide quality services to their customers. NBFC software is a must-have for every NBFC as it helps improve the organization’s efficiency and productivity.
Precisa is one of the leading financial statement analysis software that helps NBFCs to improve their lending business. It allows users to scan the statement in minutes and comes with in-built security checks that provide a loan repayment probability score. Sign up for a free trial to learn how Precisa can make your lending business easy!
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