Non-banking finance Companies(NBFCs) have witnessed exponential growth globally and within the country. They are playing a crucial role in providing people and businesses across India with access to basic financial services. Emerging technology has also enabled the NBFC software to widen and deepen its reach; they have been instrumental in ensuring last-mile connectivity. So, whether it is insurance, small business, or vehicle loans, these finance companies provide them to their customers.
However, this exponential growth comes with challenges, including increased fraud, risk analysis with limited available information, tracking repayment schedules, and more. Traditional approaches and legacy systems are often not appropriate for meeting these challenges.
Therefore, NBFCs need innovative solutions designed to meet their requirements. But how should they choose the right NBFC software? What features should they look out for? Read on to find out more.
Crucial Capabilities for a Robust NBFC Software
An NBFC software is a comprehensive loan management application that automates lending procedures from beginning to end. The solution should manage the front-end and back-office functions related to all loan types.
The chosen software should have the following features:
1. Customer Centric
The NBFC software that a lender chooses must be customer-centric and cater to the needs of all product users. NBFCs offer different financial products to their clients; the software should provide customer details, the complete history of clients, and information on financial products used by customers in the past and currently.
Apart from that, it must facilitate the following:
Streamlined Onboarding
The solution should facilitate customer use by ensuring simplified document submission, tracking applications through self-serve options, and providing anytime, anywhere services.
Automated Due Diligence
AI-driven customer due diligence helps identify fake documents and identity thefts and hastens the credit approval process.
Reduced Branch Visits
The NBFC software should do away with the need for the customer to visit the branch numerous times to complete loan formalities or submit multiple documents.
Informative Dashboard
A unified dashboard provides access to information about application status, repayment schedules, and outstanding dues. Customers should also receive timely alerts for payments or any other crucial information.
Elevated Experience
Ideally, the NBFC software should significantly boost the customer experience.
2. Promote Lead Generation
NBFCs can thrive in this competitive environment by ensuring they do not rely solely on customers who approach them or walk through their doors. They need to reach new customers, and an ideal NBFC software solution should help them do so.
It should help lenders run targeted location—and profile-based campaigns to drive leads for maximum conversions and minimal resource wastage.
Social media interactions and activity can help identify potential candidates, who can be sent personalised emails and offers. The existing customer database also offers cross-sell and up-sell opportunities. Lead scoring mechanisms are instrumental in helping assess interest levels for prioritised follow-ups.
A robust NBFC software should also allow lenders to run and manage lead-generation campaigns.
3. Scalable And Adaptable
The NBFC environment may often change due to changes in regulatory framework, market dynamics, innovation in fintech, or changes in its internal policies and goals.
So, lenders should look for scalable NBFC software that allows them to expand their operations. The solution should allow them to open more branches, handle more customers, and add more products seamlessly.
This software should be flexible and adaptable to changing technical, regulatory and market environments. The NBFCs should not find it challenging to introduce new offerings, tweak their eligibility criteria or change interest rates periodically.
The software architecture must provide API options and ensure agile reconfigurability so that the platform does not hinder the NBFCs from launching new initiatives and tapping opportunities.
4. Streamline Operations
Loan management starts much before loan disbursal; it involves a series of steps, starting with the onboarding of customers.
Efficient Operations
The ideal NBFC software should facilitate streamlined processing at each stage. So whether the customer approaches a loan query, fills out forms, carries out the due diligence process, verifies documents, or follows up for repayments, the solution should be able to carry out all functions in a streamlined manner.
Seamless Data Flow
The data should flow seamlessly across critical nodes along the lending value chain without any need to make manual entries or paper movement. The customer should not have to submit multiple forms or documents or provide the same information repeatedly.
Automated Decision-Making
Credit checks based on rules and guidelines should happen in the background, with decision triggers sent to relevant teams. An end-to-end automated process ensures faster, efficient, and error-free loan processing.
Scalability and Satisfaction
A robust NBFC software allows lenders to manage high application volumes for varied products without compromising speed, accuracy or customer satisfaction.
5. Supports Efficient Accounting, Reporting and Compliance
NBFCs, being financial intermediaries, need efficient accounting and reporting systems that also take care of compliance. The NBFC software should be able to reconcile bank and loan accounts, prepare financial statements, and provide real-time visibility to lenders.
The software system should reduce manual errors by helping lenders reconcile transactions across banking interfaces. NBFCs have to meet the requirements laid down by the statutory bodies; the solution they choose should be able to generate reports per the required guidelines, on time and in the required format. Generated reports help lenders assess their performance and improve customer service.
6. Effective Collections Management
Lenders need an effective collection management system to ensure reduced defaults and delays in debt repayment.
The NBFC software should send borrowers automated reminders for their upcoming repayments. Since lenders may have loans with different repayment schedules and frequencies, they should be able to handle the variations.
The system should allow for repayment through multiple channels and have delinquency management tools for early intervention and recovery efforts.
The solution should also empower customers to track and manage their loans. It should offer dynamic dashboards that display complete loan details, the amount due, repayment schedules, and interest rates.
To Sum It Up
NBFCs play a crucial role in the economy; they must thrive and remain profitable to continue contributing to its growth. A robust NBFC software ensures smooth functioning and helps NBFCs grow and maintain profitability.
Lenders should focus on finding the perfect solution that meets their requirements and not try to cut corners when making choices. Opting for a solution that costs less can prove expensive in the long run if the NBFC software is not evaluated carefully.
Precisa offers multiple web-based solutions for NBFCs and banks to help them in smooth operations and fuel growth. For example, the Bank Statement Analyser is one such tool that helps improve productivity by 8X and reduce processing time by 5X.
Contact us now to learn more.
Mumbai