NBFCs play a vital role in the financial ecosystem by extending a broad range of banking services to SMEs, entrepreneurs, and individuals lacking access to traditional banking services.
A report by Research And Markets forecasts a promising future for the NBFC sector, with an anticipated CAGR of 18.5% between 2021 and 2026.
Financial institutions are increasingly harnessing technology to provide inventive solutions and improve their services to keep up with this pace. NBFC software is one such essential fintech technology driving growth and innovation in this sector.
This article will explore how NBFCs are utilising NBFC software to drive growth and innovation.
What Are NBFC Software?
NBFC software is a specialised fintech solution designed for NBFCs. These solutions provide a range of features and functionalities to help NBFCs manage their operations more efficiently. This includes crucial activities such as loan management, credit scoring, risk assessment, document management, and compliance management.
NBFC software also enables NBFCs to offer their customers a more seamless and convenient digital experience, including online loan applications and disbursements, payment processing, and customer self-service.
Additionally, these software solutions typically integrate with other financial systems and platforms to provide NBFCs with a more comprehensive view of their operations and performance.
How NBFC Software Drives Growth for NBFC
NBFCs are steadily gaining momentum in the financial industry. These institutions offer loans, insurance, and investment services. In recent years, they have been using NBFC software to drive growth.
Here are some ways NBFCs are using cutting-edge fintech solutions:
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Streamlined Operations
NBFC software automates and streamlines the core operations of NBFCs, reducing the time and effort required for routine tasks. This helps them to operate more efficiently, reduce costs, and improve customer service.
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Automated Lending Process
One of the most significant benefits of NBFC software is the ability to automate the lending process. This allows NBFCs to streamline their operations and reduce the time required to process loan applications.
With automated lending, NBFCs can make quick decisions on loan approvals and disbursements, which improves customer satisfaction and reduces the risk of bad debt.
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Improved Risk Management
NBFC software also enables NBFCs to better manage risk. The software can analyse customer data to identify risky borrowers and offer customised loan terms to minimise risk. By using these solutions to manage risk, NBFCs can reduce the number of non-performing assets and increase profitability.
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Improved Customer Experience
NBFC software provides a comprehensive CRM solution that enables NBFCs to manage customer interactions, track customer behaviour, and provide personalised services. This enhances the customer experience and strengthens customer loyalty.
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Better Compliance Management
It also has a robust compliance management system that enables NBFCs to comply with regulatory requirements, such as KYC and AML. This reduces the risk of regulatory penalties and enhances the reputation of NBFCs.
NBFC Software: Role of Emerging Technologies
Emerging technologies like Artificial Intelligence (AI), Machine Learning (ML), and Robotic Process Automation (RPA) are transforming the financial sector. NBFCs are leveraging these technologies to improve their operational efficiency and offer better services to their customers.
For instance:
- AI-powered chatbots can assist customers with their queries and provide personalised product recommendations.
- NBFCs also use ML algorithms to analyse customer data and offer tailored financial products.
- RPA is being used to automate routine tasks such as loan processing and underwriting, reducing turnaround times and improving accuracy.
NBFCs also embrace other digital technologies such as cloud computing, big data analytics, and blockchain to streamline operations and enhance customer experience. These technologies have enabled NBFCs to offer their customers faster, more efficient, and more secure services.
Strategic Partnerships Between Fintechs and NBFCs
Through strategic partnerships with fintech companies. NBFCs can prompt innovation and expertise to expand their reach, become agile, and generate more revenue. For example:
Platformization model
One such partnership model is the “Platformization” model, where NBFCs partner with FinTechs to offer loan products on their platforms. This model helps NBFCs leverage FinTech’s platform and customer base to expand their reach and create new revenue streams.
At the same time, fintech benefits from the NBFC’s expertise in risk assessment, credit scoring, and compliance.
Enabler model
Another partnership model is the “Enabler” model, where fintech provides technology solutions to NBFCs, enabling them to improve their operations and enhance customer experience.
This model helps NBFCs reduce costs, improve efficiency, and increase productivity, while fintech benefits from the NBFCs’ established customer base, regulatory compliance, and credibility.
An Innovative Model for Fintech and NBFCs Based on Technologies
The financial services industry is undergoing a significant transformation driven by technological advancements. Besides NBFC software, leveraging innovative technologies to provide customers with improved financial services is becoming more mainstream. For example:
AI
Artificial Intelligence (AI) is a crucial technology defining this new paradigm. AI-enabled fintech solutions can enable NBFCs to analyse vast amounts of data, gain insights into customer behaviour and preferences, and offer customisable financial services.
Blockchain
Another technology driving this transformation is blockchain. It provides a secure and transparent way to store and transfer financial data. This technology is also being used to develop smart contracts, which automate the execution of contractual obligations.
Mobile Technologies
Mobile banking apps enable customers to perform various financial transactions from their smartphones, including deposits, withdrawals, and payments. Mobile payments and digital wallets are increasingly being used to facilitate contactless transactions, further promoting financial inclusion.
Cloud Computing
Cloud computing reduces NBFC’s IT infrastructure costs while enabling faster and more flexible deployment of new services. Cloud-based solutions also provide enhanced security, scalability, and performance, enabling fintech companies and NBFCs to scale their operations rapidly.
Summing Up
NBFC software has become a game-changer for NBFCs in driving growth and innovation. With the software, NBFCs can streamline operations, automate processes, enhance customer experiences, reduce risks, and generate revenue streams based on data-driven insights.
With artificial intelligence and machine learning integrated into NBFC software, NBFCs can improve their operations and provide better customer service.
Precisa is a leading software solution provider that assists NBFCs in their day-to-day operations. With built-in security functions, customisable workflows, and trend analysis, it is a suitable platform for any NBFC.
In addition to simplifying the analysis process, we provide easy-to-use dashboards that provide actionable insights to help businesses make informed lending decisions.
Precisa tool is user-friendly, has a very low learning curve, and can be rapidly deployed alongside the existing NBFC software.
To learn more about Precisa, book a free demo today!
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