'Technology Inducing Multifaceted Changes In Lending Space'

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The invasion of digital lending technology in the banking sector has gradually become evident. Its influence has also brought changes in the non-banking organizations.

Start-ups in the lending business are now investing in technology to obtain a clear understanding of their customer base. But, majority of banking organizations have barely taken initiatives to learn how digital lending can effectively engage customers. Experts say traditional banks need to increase investments in digital lending to create better customer experiences.

In a conversation with the Entrepreneur India at the Money Tech India Congress, 2017, Manish Khera, Founder & CEO, ‎Arth Impact shared his opinion on the role of technology and the future of lending space in India.

Technology Bringing Multifaceted Change In Lending Space

Manish feels technology is bringing in a host of multidimensional changes in the lending space.

"The first change is evident on the front, which involves sourcing of customers and offering services to them. It also involves moving money out and bringing it back. Technology also brings changes in analytics. In case of collating information about customers from the details they have provided and from what's available in the ecosystem, technology plays a vital role. Processing this information ensures that right customers get the benefit of friendly rates and bad customers are left out in the selection stage itself," he explained.

Will See Everybody In The Eco-system Grows

The past few years have witnessed the springing up of several lending start-ups, including a few in the section of personal loans and others in micro-finance.

According to Manish, the lending market is so vast that these new set of companies will grow at a steady pace, without disrupting the expansion of those existing in the ecosystem.

"The differentiators will enter the scene with customer experience and will eventually go to the depth of the credit model. We will see that growth happens for everybody in the ecosystem," he added.

The New Approach by Fintech Companies Bringing Disruption

When asked about the disruption by fintech companies in the Indian lending space, Manish said the new and novel approach of fintech companies towards lending is bringing in the disruption.

"As part of the new approach, a lot of information about a customer is being collated in an automated way there by raising the turnaround time and convenience factor of clients dramatically. A new wave of innovation has surged in. Soon, it will help in customer evaluation with a lot of effort being made on leveraging technology to develop new credit models and churn the data for customers. This is precisely the second level of disruption that all the fintech companies will make," he said.