Category : Banking

Banking Fintech Insurance

InsurTech Challenges and Role of Technology for Growth of Insurance Sector

InsurTech Challenges and Role of Technology for Growth of Insurance Sector

In a world of unpredictable yet unavoidable change, individuals, companies and even governments turn to the insurance sector to be prepared. Insurance needs are changing in many ways, such as including risks related to climate change like floods or bushfires, or even novelties like ‘hole-in-one’ insurance (where a golf tournament insures itself to pay the prize bonanza on the off chance that a hole-in-one is achieved). With an increasingly online generation, even as traditional insurers bank on the credibility and trust they have accumulated, the new age InsurTech companies chip away at the market with digital experiences and new models.

When it comes to innovating with technology, InsurTech companies have an advantage over traditional insurers. They are nimble and flexible with their offerings, able to quickly establish low-cost digital platforms and new operating models. InsurTech companies’ biggest advantage is the hold they have over the customer’s pulse. With smartphones becoming commonplace, customers find that InsurTech offers comfort, convenience, and speed in making important insurance-related decisions and transactions.

Research indicates that 28 of the 280 FinTech firms that have turned unicorns to date have played an instrumental role in driving innovation or disrupting the way insurance is done. From claim management to reinsurance, asset management, customer onboarding, and engagement, InsurTechs have earned their colors across the insurance value chain and are here to stay.

Challenges to InsurTech

Despite these gains, experts believe that InsurTech market growth will have to endure several constraints. Foremost among them is a lack of awareness about the value InsurTech can deliver, and dearth of professionals who can expertly work with advanced technologies. These factors could restrict InsurTech companies from scaling their technology capabilities to the extent desired.

However, it is undisputed that the future of insurance will be tech-driven in the form of embedded ecosystems, AI & ML, blockchain, low code technology, and more. 85% of insurance companies recognize the need to prioritize digitalization, so it may not be long before traditional market leaders catch up with their technology capabilities or look to buy out smaller players. InsurTech start-ups have their work cut out in gaining the kind of trust and credibility enjoyed by established insurers. Now, they must rethink strategy to retain their technology advantage.

Insurance Market Concentration

If we look at the US which is the global market leader, InsurTech is expected to grow at more than 7% CAGR over the next five years. The competition is definitely heating up here.

Read more: The Rise of FinTech in Asia: Success Stories and Learnings

Business opportunities for insurance will continue to flow in as the world becomes increasingly digital. More aspects such as health, travel, auto, and home will be included under the umbrella of online insurance.

InsurTech companies will need rely on their strength – technology – to offer a wider, more personalized range of benefits shaped by data, new offerings like social insurance, and cost saving tools like virtual agents powered by conversational AI etc.

McKinsey research opines that five rapidly advancing technologies will significantly redefine the future of insurance. These include applied AI, distributed infrastructure, future of connectivity, next-level automation, and trust architecture. By putting the full force of their tech advantage here, InsurTech players can solidify their business and expand their portfolio.

1. Powering up core processes with AI

Since the pandemic, at least a quarter of life insurers in the US have expanded their automated underwriting practice to simplify the application process. From reducing claims processing time and cost to improving fraudulent claim detection and claim adjustment processes, AI and automation are proving be invaluable.

Take for example, the AI-enabled platform offered by Bdeo, available on their mobile app. It comes with a chatbot that uses Natural Language Processing principles to liaise with claimants, get first-hand info on the accident/damage that has occurred and helps them share photographic evidence of acceptable quality on the platform. The insurer can use the app to inspect and investigate the incident remotely using computer vision models. Doing so helps avert errors in evaluation and improves the overall claim processing experience for both the insurer and claimant.

Studies predict that AI will disrupt underwriting, claims, marketing, distribution and other core processes by enabling more human-like interactions across various customer touchpoints. There is a plethora of opportunities that can be exploited. For example, the associated customer data can be used for predictive analysis and forecasting, which can in turn, inform the development of new product and service lines.

2. Enabling intelligent insurance with distributed infrastructure on the cloud

Many core insurance processes that have been weighed down by legacy systems are finally modernizing. This allows insurers to leverage cloud-native infrastructure, ramp up to manage workloads without impacting customer experience and speed up their innovation efforts. Thanks to cloud computing, they will be better placed to harness the massive amounts of claim-related data available to benefit their customers and increase profitability.

This is a huge opportunity for traditional insurers to collaborate with InsurTech to form partnerships that leverage their strengths and quickly enable plug-ins, distribution channels, and other value-adds. For instance, InsurTechs can offer digital solutions to efficiently sift through vast historical data of established insurers, to identify and interpret customer patterns and insights to determine the kind of new product/service lines to be developed. In fact, at least 75% of insurers were found to be seeking out InsurTech collaboration to improve their customer experiences according to a Capgemini survey.

3. Developing insurance products using telematics

Telematics technology is increasingly being used to monitor, interpret, even influence consumer behavior. For example, innovation stimulated by IoT adoption is being applied in connected home devices to track humidity, temperature and other parameters, which potentially cause damage to property. Insurers can leverage the data generated on these devices to estimate risk over time. Similar innovations are being explored across the domains of insurance to life, health, auto, manufacturing, commerce etc. The advent of 5G will enable real-time data sharing and make it possible for insurers to turnaround services faster than ever.

For example, being covered against ride cancellations is a value-add for customers and digital solutions can be developed to enable this as a timely service using real-time availability of data. Another example of value-add is the coverage against bodily harm to earners and riders of every trip offered by Uber in partnership with a leading insurer.

4. Enabling human decisions via bots

While robotic process automation (RPA) has proved its worth in automating back-office functions in the insurance industry, there’s a lot it can do in terms of next-level process automation that will shape the future of insurance. For example, the IoT-enabled, real-time monitoring of factory equipment can predict maintenance needs and prevent repair or damage that result in insurance claims.

RPA also has a distinct role to play in supporting human decisions in a cost-effective and timely manner. As an example, it can expedite claims processing wherein photos of the damage to a vehicle are automatically assessed and verified for authenticity without requiring an in-person visit by a claims adjuster to the damage site. Likewise, building optical character recognition features into RPA will help extract text from claim applications in large volumes and ensure that the information it contains is distributed to the right functions for further processing.

5. Laying the foundations for trust with blockchain

Increased digitalization of insurance is raising security concerns due to the sensitive nature of customer data that is being shared across the insurance ecosystem. Building customer trust will be a priority for insurance players, which is where blockchain comes to the rescue.

Along with its advantages of transparency and efficiency, blockchain will play a leading role in helping carriers safeguard customer data from cyberattacks and data breaches. It will also simplify user authentication, identity management, and fraudulent claim detection etc. Through blockchain-based smart contracts, policies can be converted to decentralized lines of codes that will make consumer’s data immutable and easily available for immediate verification in the event of any claims made to the insurer. If it proves to be fraudulent, the contract will immediately be discontinued, and the premium amount paid returned to the insured. This kind of data transparency and responsiveness of the system will help build trust between all concerned parties.

The future of digital insurance paved by tech-led design

As insurance becomes more digitally driven, user experience (UX) will be all the more crucial for branding. While an omnichannel insurance experience is the norm today, creating memorable user experiences at all possible touchpoints will be paramount to carving out stronger market positions for the InsurTech brand.

For example, the silver agers generation are no longer the most dominant consumers of insurance. In fact, studies that the interest now being shown by millennials and Gen-Zers towards insurance products exceeds that of the older generations.

Percentage of people using app to manage insurance

Or, as this chart indicates, nearly half the individuals in the 65+ age category are unlikely to use an insurance app. If the insurer wants to attract more consumers from this cohort, they will need to leverage data to understand preferences, simplify interfaces, customize their offerings and so on.

According to the World InsurTech Report 2021, half of the insurance customers are willing to explore solutions offered by new-age digital players. The insurance market will experience disruption and a new order will emerge. Traditional insurers are more likely than ever to engage in partnerships with InsurTechs to stay relevant. Niche players and start-ups in InsurTech will not only need to leverage emerging technologies but also understand the complexities of insurance better and closely follow changing needs of their target demographics.

Led by research, data analytics, and empathic and intuitive design of user-centric interfaces, InsurTech players will be able to create market differentiation that can help them explore opportunities to build partnerships with traditional players so that both survive and thrive.

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Banking Fintech Insurance

BNPL – Passing Fad or Promising Future for Fintech?

BNPL passing fad or promising future for fintech

Taking a loan to pay for higher education is a common phenomenon in the US. But who would have imagined that due to food inflation, even essentials such as groceries will be considered for the ‘Buy Now Pay Later’ (BNPL) phenomenon? On Klarna, a leading player in this domain, more than 50% of the top 100 items bought on the app belong to grocery or household items.

As more younger consumers go online, they have been experimenting with alternative payments methods. The rise of smartphones and e-commerce, now integrated with social media platforms is among the top trends impacting online sales and payments. The creator economy too is fueling social commerce. Such trends have attracted a new demographic – the millennials and teenagers. Now wonder that Fintech players are crafting new solutions to meet this demand. Pre-paid cards and digital bank accounts for teenagers are meant to address this trend. Fampay, Junio in India and Revolut <18 in the UK are a few examples.

BNPL: ‘credit’ where due

Over the last couple of years, the BNPL trend also referred to as ‘Pay in 4’ model, is meant to address a market opportunity. The post-COVID scenario and inflation in many countries has made it even more attractive – especially for a demographic with limited income resources.

In a 2021 research in the US, it was found that 60% of those surveyed had used a BNPL service. The main incentive of course is the interest-free instalment option which reduces the spending pressure and provides an incentive for online purchases. Klarna, claims a 41% increase in order value and 30% increase in conversion through their BNPL solutions.

The adoption of BNPL is a worldwide phenomenon. According to research in 18 countries from YouGov, Indonesians made the highest proportion of purchases using a BNPL plan (27%) – almost double the global average of 15%.

BNPL adoption rate worldwide

Source: YouGov

The same survey also mentions that in India, BNPL services grew a mind-boggling 637% in 2021. Naturally, such solutions are popular among the younger demographic. A whopping 75% of BNPL users in the US are Gen Z or millennials. Credit card penetration in India is still in single digits. BNPL was seen as the answer to a demographic which could be denied a credit card.

Fintech brands too were quick to spot the opportunity. In mid-2021 there were already 50+ companies offering ‘Buy Now Pay Later’ services across the world. The number is likely to have gone up in the ensuing period. In India, brands such as UNI have positioned themselves as a revolution in credit offering payment options in three or two instalments.

BNPL players are also tying up with large retailers such as Amazon, Macy’s and Target – thereby gaining access to a large, ready customer base. Aside from the smooth user experience, some serious technology is at play behind BNPL experiences. Apparently, Affirm uses over 200 consumer data points for risk management, while its existing loan users improve its AI algorithm.

Some of the aspects BNPL pay attention to from tech POV are:

Infrastructure: The cloud infrastructure should help scale up operations easily, provide new products and services using on-demand computing. It should also safeguard consumer data and aid in maintaining regulatory compliance.

Risk Management: machine learning comes into play here in developing models for better risk identification and management, real-time credit score prediction, and payment management.

Security: BNPL players are expected to maintain the essential infrastructure in accordance with security standards. Major players such as Klarna collaborate with AWS’s compliance and security assurance teams.

Analytics: The integration of data workflows should make it simple for data to be absorbed from a variety of structured (such as transaction and payment history) and unstructured sources (such as social media activity, credit bureaus, and spending behavior). Such information gives early warning signs of credit degradation during times of difficulty and assists in the creation of a 360-degree perspective of the consumer. The data analytics tools aid businesses in understanding the preferences of their customers and the performance of their own products.

Tech partners: to create better products and solutions, fintech companies merge or partner with services who add value. Block (formerly Square) acquired Afterpay a pure play BNPL company. To enhance its underwriting capabilities and speed up automated credit decision making, particularly to draw in millennials and Gen Zs, Klarna purchased the Italian payment business Moneymour. Additionally, Provenir, a provider of credit risk analytics, and Klarna have teamed up. Credit scoring, underwriting, and real-time decision-making at the point of sale are bundled as a result of their combined efforts.

So does all this point to a rosy future for BNPL? According to industry experts it may be prudent to exercise caution as regulators have taken steps affecting the business model of several players, in markets like India. What’s driving such actions is the fear of triggering overspending leading to credit risk and worse still, poor financial discipline among a young audience.

Buy Now, Pain Later?

In June 2022, the Reserve Bank of India issued a circular banning non-banks from loading pre-paid instruments (PPIs) such as digital wallets or cards using credit lines. Several brands suspended their BNPL offerings following this development. According to Euromonitor:

The Financial Conduct Authority (FCA) in the UK has named the key risks the model holds for consumers and the wider credit market. These include, but are not limited to, the lack of information for consumers around the features of BNPL, the lack of consumer creditworthiness assessment, and the potential creation of over-indebtedness.

Nearly 70% of BNPL users admit to spending more than they would if they had to pay for everything upfront, according to LendingTree. What’s more, 42% of them have made a late payment on them. While consumers maybe attracted by simple onboarding experience and ease of payment, the offline experience has not always been pretty in India. According to reports, lending apps have used unsavory methods to coerce users who have defaulted on payments.

These developments point to the industry being regulatory dependent in the near future and rightly so. What could be the broad contours of solutions for both end consumers and Fintech players? According to financial industry insiders, full-service banks seem to be better placed to make the most of the real demand for ‘pay-over-time’ services. Pure-play BNPL service providers may have to tweak their core offering based on the regulatory oversight in their home markets.

Trust, convenience and ease of use are three critical aspects of BNPL success. Traditional banks score better on trust – a critical factor in financial service products. According to YouGov study, only 36% in the 18-24 age group trust BNPL companies as compared to 61% in the same group for traditional banks.

Trust metrics on financial services by age

Source: YouGov

The implications for the ecosystem

There are several pointers for both end-consumers and the fintech ecosystem from this emerging trend.

Brands in the BNPL sector have a real obligation to educate users about financial prudence, especially to the younger demographic. It must be made clear to the end-user in every touch point that this is a loan and there are consequences for missed payments. Consumers must also be educated about the risk of over-spending and its fallouts. This is important as a key metric for BNPL players is the re-use of a service. According to PayPal 70% of their customers use the service within six months of first use. In the US, as BNPL is offered at more merchants the older demographic too is coming into the fold. So, it’s not just the Gen Z’s and millennials who will be target audience in the future.

For brands, convenience could translate to ubiquitous acceptance across online portals and POS at physical locations. Clubbing all BNPL payments with one brand would also make it easy to manage for the end user. Ease-of-use comes into play with respect to the app experience. The onboarding should strike a balance between being friction-free and conveying the details of the financial terms in a transparent manner, especially the repayment schedule and penalties for delay.

In sum, BNPL is a useful and convenient product feature especially for those with limited leeway in upfront spending capacity. But industry growth aided by great digital experience will depend on regulatory constraints and educating the consumer about the need for financial prudence.

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Banking Fintech Insurance

5 key FAQs on neobanks and their digital experiences

5 FAQs in Neobanking and digital experiences

Founded in 1472, Banca Monte Dei Paschi di Siena is said to be the oldest surviving bank in the world. Since then, the banking industry has come a long way. It has not only grown in size but also wields huge influence across the world. Several powerful local and global brands have been established and many of them are synonymous with trust and financial safety. But as with every other industry, change is the only constant in banking too.

The onset of the internet, smartphones and better mobile connectivity has given rise to digital banking. For a large set of customers there was no reason to visit a brick & mortar branch office as all transactions could be completed on the web or on the mobile. Over the last few years, the term neobank has been used to describe digital-first or digital-only banking services. Europe, India and the US have been home for several successful neobanks in the recent past. What’s more, as a sign of its popularity, several niche services have already been launched in the domain:

– Launched recently, Lucy is a neobank targeted at women entrepreneurs.

– There’s a neobank exclusively to meet the needs of musicians: Nerve merges user experience and financial technologies to help artists build stronger communities and sustainable careers.

What makes neobanks an attractive proposition for consumers? Let us attempt to answer a few basic questions about neobanks, the reasons for their popularity and the role of digital experiences.

1. What are neobanks? Are there different types of neobanks?

When banking began the digitization journey, the FinTech industry emerged, providing technology to digitize several processes in financial services. This enabled online banking, payments and other services like insurance and wealth management. Customer preferences shifted as they embraced the convenience of online transactions. They prioritized convenience over the traditional approach of trusting a person at the local bank branch or an insurance agent. They preferred digital payments over cash, removing the need for ATMs. Neobanks emerged at the intersection of technology and banking in this industry shift. The concept of neobanks emerged around 2015, and in a very short span of time disrupted the entire banking industry.

“Neobanks are digital first, born in the cloud, completely online banks, with absolutely no physical presence. They provide banking services only via web or mobile a smartphone app.”

In Europe and the US, neobanks are also referred to as ‘challenger banks’ or ‘open banking’. They all have the following key characteristics:
– Customer first: understanding the generation that are digital natives, and rely on their phones for everything, neobanks adopt an entirely digital approach to the customer experience, offering crisp, user friendly and intuitive interfaces.
– Technology powered: Neobanks are entirely technology driven, using technology to acquire customers and deliver services. They deploy artificial intelligence to create personalized, customized offers based on data. Traditional banks rely on in-person or phone customer service, while neobanks may rely on chatbots or Robo-Advisors.
– No physical presence: Neobanks have no physical presence at all; they operate without branches, offices, ATMs or any type of physical infrastructure.
– No banking license: Neobanks typically do not have a banking license and offer services along with a banking partner, although some countries that allow digital banking licenses have seen some licensed neobanks.

Robosoft Neobank eBook download

In general, a neobank is different from a traditional bank, a mobile wallet or a digital bank, and can fall into these categories.

1. Independent neobanks that work with banking partners: most neobanks follow this model, where a FinTech firm creates a digital experience with a mobile or web platform, and they collaborate with conventional banks to offer services and products. Yolt, Lunarway, and Moven are examples of neobanks that work in this model.

2. Neobanks owned by traditional banks: several traditional banks have realized the value of a digital-only, customer first approach. Aside from their online banking portals, banks set up wholly owned neobanks as part of their digital initiatives such as DigiBank set up by DBS.

3. Licensed neobanks: some countries such as UK, Brazil, Germany, South Africa, and Singapore allow digital banking licenses, and as a result, some neobanks have acquired banking licenses. This allows them to offer more valuable, regulated services. Monzo, N26, MyBank, Starling Bank, and Revolut are some examples.

Additional read: Mobile Fintech vs Traditional Banking products

2. Aside from lack of physical outlets, how are neobanks different from traditional banks?

What neobanks did best is understand the new age consumer and use technology to create a user-first banking experience, rather than a regulation and process first banking experience.

Traditional bank vs Neobank Challenges

Neobanks create a purely delightful digital journey with easy to use and attractive interfaces. New solutions are built based on a mobile-first experience over a branch-first experience. They use data to create unique solutions and understand the pulse of the customers to create digitally enabled experiences.

3. What aspects of neobanks do customers like?

It is believed that the incredibly easy account opening and smooth, quick on-boarding are hugely attractive to those who have signed up with neobanks (Niyo in India anchors its advertising on the fact that its account opening takes just 100 seconds).

Deloitte surveyed millennials in over 20 countries and found that 68% say that new financial players understand their needs. They expect banks to offer a slick and sophisticated app, with new offers tailored to their needs. 79% of millennials access their mobile banking app multiple times a week. With Gen Z entering the workforce, there will be new expectations of social media integrations and deeply unique experiences.

Consumers want fully connected services from neobanks, which means creating products and services that cross over the traditional industry lines.
– Hyper-personalization options such as bundling services like real estate with home loans, peer to peer payments, personal finance planning, and even lifestyle related features are being integrated into the digital experience.
– For small and medium enterprises as well, neobanks are offering integrated services of banking as well as financial management including accounting, invoicing and taxation.

Neobanks have seen widespread adoption and growth as they are agile and easy to set up, and customers find it simple to engage with them.

Easy account creation: customers can easily open an account in a few clicks, without having to visit a bank branch or provide reams of documentation.

Personalization: the user experience is unique and tailor-made with data available on spending patterns and other insights

Range of services at lower fees: not having to bear costs of labor or branches as well as less spend on regulatory compliances allow Neobanks to offer services including banking, debit and credit cards, forex, loans and others free or at very low service rates

4. What’s in it for neobanks?

Low cost and agile: Neobanks are 100% online, so they have no investment on physical infrastructure and low operational spends such as customer support, ATMs or bank branches.

Wider reach of customers: the ease of account creation via mobile phones and simple user interfaces, enable neobanks to reach the unbanked populations including small and medium enterprises, blue collar workers and youth.

Data on consumer patterns and trends: being completely digital allows neobanks to collect and analyses consumer data, understand the patterns, and behaviors. Using machine learning allows them to provide a customized experience, and artificial intelligence helps neobanks create personalized services.

Benefits for the Neobank

5. What is the industry shifts which were favorable to neobanks?

Digital acceleration: The pace of adoption of new technologies and relying on digital solutions for everything (be it ordering food or hailing a cab) increased recently. The pace of this change accelerated after the Covid-19 pandemic and has impacted several industries including media & entertainment and delivery services.

Hyper-personalization: Product or service parity is common across categories. While consumers may see very little difference between brands, the ones which cater to a ‘segment of one’ are bound to have an edge. Consumers expect unique services, ongoing communication and access to relevant information and data.

Change in the notion of trust: An imposing building and presence over decades was equated with solid performance and trust by the older generation. Millennials and Gen Z don’t see such as markers of trust. They expect the digital experience to work and work best for them.

Shifts in technology capabilities: The foundational elements of technology put in place in the first wave of digitization by banks and FinTechs have a lot to do with the success of neobanking. API integrations allow data and information to be shared by various applications, which allows neobanks to offer simplified services, and fast digital experiences. Account aggregator system reforms such as India’s UPI (Unified Payments Interface) have enabled ways to connect, bypass legacy-infrastructure hurdles, and innovate using technology.

Technology-enabled design as brand edge: Both B2C and B2B enterprises have come to accept that design can be a secret weapon in creating brand affinity. While slick user interfaces attract users and simplify the digital journey, machine learning and artificial intelligence are bridging data and user experiences. With these AI / ML applications, neobanks draw from individual data to create a personalized experience, or offer unique services or products by predicting a user’s need.

Additional read: 5 factors set to impact the future of banking

Despite the rise of neobanks, traditional banks which have adapted well to the digital world still have an edge due to brand recognition, positive equity and a huge customer base. All in all, it promises to be a win-win for the end consumers who can get the best of banking facilities, customer service and digital experiences.

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Banking Fintech

The Rise of FinTech in Asia: Success Stories and Learnings

The success story of Asia’s FinTech industry is something that the rest of the world is now trying to emulate. FinTech in the US is just beginning to catch up, especially after the pandemic hit and digital channels became a necessity.  This Economist article suggests that in the US the volume of transactions on PayPal was 36% higher in March 2021 than last year. The number of people using Square’s digital Cash App rose by 50% to 36 million during 2020. While the FinTech market in the US is growing, it is yet to achieve the scale and maturity that the Asian markets have achieved in the last few years. 

Asia is a hub for some of the most advanced FinTech markets and it continues to be so. A recent EY survey shows that Asia has retained its global leadership in FinTech adoption this year too. FinTech adoption in Asia-Pacific markets has grown enormously in the last two years. Markets like Hong Kong, Singapore, and South Korea have seen a consumer adoption rate of 67%, but China and India are spearheading the FinTech growth and are at close to 87% adoption rate.

Factors responsible for this accelerated growth and adoption include consumer demand, market-friendly government policies, high mobile penetration, and reliable internet infrastructure. The rise of Super Apps is also one of the most important aspects that have led to Asia’s FinTech growth. 

Defining Trends From the Asian FinTech Landscape

The FinTech landscape in Asia has matured significantly over the years. COVID-19 is also driving a major shift in user behavior towards financial services. There’s been a rapid increase in the use of digital payments, online shopping, adoption of open banking, and more that have reset the BFSI sector as we know it.

Here are some of the key trends from the Asian FinTech landscape and what they could mean for the rest of the world.

Rise of Neobanks or Digital-Only Banks

Neobanks are online-only banks and do not have any physical branches. In the present context of the global pandemic, it is only natural that neobanks have become popular. However, aside from the pandemic, the other factors that have fuelled the popularity of digital banking in Asia are:

  •  A large unbanked population got access to credit and essential financial services at lower costs through these FinTech players. 
  • The ASEAN population is primarily young, and Neobanks are especially appealing for younger people who don’t want to go to the physical branches.
  • The governments and regulatory agencies support the digital movement in these areas. In 2019, regulators in Hong Kong issued eight digital banking licenses. Singapore has also granted some digital banking licenses while Malaysia and the Philippines are opening up applications gradually. 

The recent player in the field in India is Niyo, committed to making banking simpler, safer, and smarter through its suite of services. Fintech has partnered with some of the leading banks in the country to revolutionize traditional banking services through technology integration.

Niyo - India's leading FinTech company

Various offerings from Niyo 

At Robosoft, we partnered with India’s first cross-border neobank to create an app that allows users to conveniently operate and spend money across the globe. The app enables users to open and operate a multi-currency bank account digitally and instantly on the app.

Growing Importance of eKYC in Digital Onboarding

In the present times, even though consumers want to engage with a bank, they’re unwilling to visit a branch. The ongoing pandemic has been a major driver of this shift. In such a scenario, businesses that offer a superior onboarding experience and digital services are critical.

At Robosoft, we partnered with India’s first virtual private wealth management platform, to create a seamless UI/UX design for the app to allow for KYC-compliant (Know Your Customer) easy registration and onboarding and Touch ID enabled login. 

In Asia, the FinTech market is led by China and India, two economies with already well-established systems of civil identity. WeChat Digital Identity in China and Aadhar in India are leveraged by tech providers to enable eKYC, making the onboarding process frictionless.

WeChat Digital Identity

The Ecosystem Approach to Selling Insurance

Acko is a fully digital general insurance company based in India. It provides personalized pricing to customers using deep-data analytics. It also studies customers’ behaviors and interaction patterns to suggest insurance products accordingly. Another innovative offering by Acko is Ola Ride Insurance. If you’ve booked an Ola Ride, you can notice a checkbox to insure your ride. The service allows you to instantly secure a cover for lost baggage (including laptops), missed flights, as well as unplanned medical expenses. Pretty convenient, right?

This is an example of embedded insurance that solves one of the biggest problems of the industry – that insurance is sold, not bought.

ACKO Insurance – a single platform for Bike, Car and Health Insurance 

We partnered with Aviva Aviva Life – one of the leading life insurance companies in India, to redesign their website. The website revamp changed the perception about life insurance products by connecting them to the celebration of life instead of being a risk mitigation tool. We created a multi-engaging experience design that was engaging and showcased Aviva’s range of products aligned with individual milestones in a person’s life.

Aviva Life Insurance web and mobile platform

Aviva Life Insurance Web and Mobile Platform

Mobile Peer-to-Peer (P2P) Lending Platforms

Asia Pacific has emerged as a leader in the mobile peer-to-peer (P2P) money transfer market. According to data, Asia Pacific is the home to more than half of the smartphone users across the globe. The availability of low-cost smartphones and increasing disposable incomes in the region have fuelled the popularity of P2P financing platforms. Most governments in the APAC region have also been actively promoting digital payment initiatives, which has helped reduce the costs associated with money transfer (such as UPI in India). 

KoinWorks is one of the leading digital lenders in the growing P2P lending space in Indonesia. The FinTech firm has enabled thousands of SMEs to access credit and grow their business through a simple app-based lending platform. In India besides Paytm, players like Phone Pe, BHIM UPI, etc. have become popular.

KoinWorks – cash business loan credit platform

The Rise in QR Code Payments

Alipay and Tencent kickstarted QR code-based payment systems, making mobile payment the most popular payment method in China. Presently, QR code payments have reached Africa, and other countries in the Asia Pacific are rolling out national QR code standards for broad adoption. In the present times, social distancing and personal hygiene have become essential aspects of our lives. In this situation, QR code-based payment systems provided a safe and utterly contactless method for sending and receiving money, which was a great enabler for small businesses in most parts of Asia. During the lockdown restrictions in 2020, India’s 12 lakh robust Kirana retail system drove the cashless revolution in the country. Many shifted to digital payment systems to meet the needs of their customers in a safe and contactless manner. Paytm went a step ahead to launch Paytm SoundBox, a voice-activated POS (point-of-sale) machine for small merchants. Shaped like a small speaker, the SoundBox supported multiple payment methods.

Paytm Sound Box

Use of AI/ML for Personalized Service Offerings

Personalization is the solution to building trust and loyalty for any organization. This is one of the main reasons behind the growing popularity of AI in banking and other FinTech solutions. ML algorithms can help analyze customers’ information and predict the services that would be the most appreciated by them. For instance, Coverfox uses AI-based insights to enable users to compare and choose from a range of insurance plans from various companies.

Paytm, on the other hand, uses an AI-based routing engine to achieve better payment success rates.

“Our partnered merchants spend massively on customer acquisition and retention. The last thing they want is losing a customer due to payment failure. We are excited to introduce an AI-based routing engine that addresses this problem by optimising the payment workflows and routing the transaction to best-performing payment aggregator in real time. Further, this will help online merchants reduce development effort to enable various PG providers and achieve faster time to market.” – Puneet Jain, Vice President – Paytm Payment Gateway 

The Super App Revolution

Super Apps, the “One app to do it all” concept that became popular in China has now become a global phenomenon.

Paytm, India’s largest mobile payments and e-commerce platform can be safely called India’s first Super App. It allows users to do multiple things like transfer money, buy gold, book tickets, and even make hotel reservations. Presently, Paytm has over 150 million+ monthly active users and the highest market share in offline merchant payments with 15% month-on-month growth. Paytm has also invested heavily in its wealth management and investment portfolio.

As rightly quoted by Terry Angelos, SVP, Global Head of FinTech at Visa

‘’There are many lessons to be learned from emerging markets for the U.S. FinTechs, but perhaps the most important trend we’re seeing and could learn from today is the Fintech super app.’’

Lessons from the Asian Fintech Landscape

Here are some key lessons gleaned from the Asian FinTech majors and disrupters that could help you build the next fintech unicorn.

Look Beyond Your Horizons

Ping An, a well-known Chinese FinTech, started as a state-owned insurance company. Today, customers can keep their cash with Ping An’s bank or invest it through Lufax, its wealth-advisory arm. They can also sign up for education services or buy a car and then finance the payments through its consumer credit unit. Lufax also uses a facial recognition tool for account opening, like many other fintech companies in China that are leveraging the power of AI/ML to make digital banking more secure.

Tencent is yet another interesting example in this category. Tencent’s core business is not financial services but social networking channeled through its social messaging platform – WeChat. Using WeChat, Tencent offers users a wide variety of services, such as online shopping, booking taxis, and ordering meals. By integrating these services and designing powerful experiences centered on consumers’ everyday needs, WeChat has gained relevance in users’ daily lives and has almost become indispensable for most Chinese people.

 Create a Frictionless Customer Experience

The rise of technology in financial services has thankfully dispensed the need to wait at physical branches to carry out simple monetary transactions. Modern customers are increasingly looking for personalized solutions to manage their money and other aspects of life. For the same reason, payment apps have become exceptionally popular, thanks to the simple and easily navigable UX/UI.

For instance, Piggipo, a Thailand-based app for managing multiple credit cards via one interface, securely monitors spending and helps with scheduling payments, saving money and time. Besides convenience, Piggipo enables users to see their credit card statement in real-time, set spending limits, and view each card’s due date.

Focus on Creating Engagement

WeChat Pay is one of the best-known fintech disruptors from China. At the time of its launch, Tencent used an exciting gamification feature known as digital red envelopes to increase engagement and retention. These red envelopes could be filled with virtual cash or games and sent by users to other groups. The users in a group would then compete against each other to win the red envelope, making the platform highly engaging and adding to its popularity.

 Here’s another example from Ant Financial that launched Ant Forest to reward customers using AliPay to pay their bills or perform activities to lower their carbon footprint, such as using public transportation.

Engagement is not just limited to customers. The best solutions come from hiring the best talent in your team. To achieve this, Gojek made a conscious effort to make working in the company an attractive proposition. They encouraged content on platforms like Medium, of their designers and engineers writing about how they solved several consumer problems. By highlighting their employees’ achievements, the company gave an insight into its productive work culture that acted as a hook for attracting more talent.

 Increased Focus on Customer-Centricity

Asia is home to a few of the world’s biggest Fintech unicorns, and the venture capitals keep flowing in. Conducive market conditions, including a large number of tech-savvy audiences, along with the disadvantages of the traditional banking model have cumulatively meant that the consumers have been targeted at just the right time. For example, half the population of Indonesia is under 30, and the smartphone penetration crossed 50% very recently. This means consumers are waiting to avail themselves of services through their smartphones and the internet.

Additionally, many of these companies have spent heavily on loyalty and user retention, whether it is through point-based reward systems (Cred), offering discounts and coupons (Gojek), or earning positive equity through various campaigns aimed at genuinely helping people in their times of need (KoinWorks). For instance, KoinWorks launched the KoinWorks Cares program to educate users about safe investment options during the pandemic. They also started a massive donation campaign providing a sizable insurance cover for free to all the donors and used the collected funds to purchase test kits for Indonesian citizens.

In Asia, the appraisal of loan applications, approval, and disbursement have all become simplified. There is no dearth of digital payment options, with giants like Amazon and Google recognizing the potential market for payment in India. Meanwhile, China already boasts three of the highest-grossing digital payments companies in the world. This has also created opportunities in Asia for venture capitalists to fund start-ups that provide FinTech services – something that the US needs to work on. Although the USA has more FinTech startups (5,799) than Asia (2,849), the FinTech deal counts the difference between the two, at the end of 2019 Q3, was 152 (Asia) as opposed to 156 (US).

Uncanny Partnerships Lead to Big Rewards

No business is an island, and cross-industry partnerships could help in optimizing customer experiences across the board. The data interoperability agreement between JD Finance and Tencent is an example. JD uses data from WeChat’s messaging platform to make product recommendations to customers and helps vendors with their products.

The EY Global FinTech Adoption Index 2019 also points to the rise of non-financial services companies such as retailers, technology platforms, and automakers developing their technology-enabled financial services offerings. These organizations have built upon existing relationships with customers to offer holistic propositions accompanied by complementary services, such as insurance and lending that were once the exclusive purview of financial providers, says the report.

Leveraging Emerging Tech to Drive Better Customer Experiences

While the use of AI has become commonplace for Asian FinTech players, many are now dabbling into newer tech like blockchain to disrupt the financial services industry further. While there are only a few examples of companies presently using blockchain in their product or service offerings, technology’s decentralized nature will be a significant game-changer regarding security and speed for fintech companies.

Galileo Platforms, a technology platform company serving the insurance sector in Hong Kong, uses blockchain technology to connect distributors and insurers, enabling them to process real-time transactions. Mai Capital specializes in blockchain and cryptocurrency investments. Their flagship product is the Blockchain Opportunity Fund, a multi-strategy hedge fund deploying quantitative trading and arbitrage strategies.

In Conclusion

The world of financial services has undergone tremendous developments in the past few years. However, a lot of these changes are not attributable to bankers. Instead, people in business, entrepreneurs, and engineers have been chiefly responsible for the FinTech revolution in Asia and beyond. Instead of waiting for the traditional banking industry to evolve, these people took it upon themselves to address customer needs by involving key players.

 Another factor responsible for the growth of FinTech in Asia is the constant evolution and rapid digital transformation. Take the example of China’s Ant Financial: In 2019, the company had a reported valuation of around USD 150 Billion. That’s almost equal to the valuation of Goldman Sachs (USD 79.46 Billion) and Morgan Stanley (USD 79.05 Billion) combined. This was possible after the company shifted from a sole payment provider to an all-around financial services provider in a year. They were able to encompass the needs of the market and predict the upcoming trends well in advance. This ensured they could become a global force by providing convenient finance options to the majority unbanked population in both China and Asia as a whole.

 Even if we look further than FinTech, there’s hardly any industry that can resist digital transformation at this time. Whether it is building efficiencies in product design, employee and customer experiences, or building more transparency into the supply chain – upgrading your existing technology stack is the most viable solution to meet your organizational goals. 

 Furthermore, the pandemic has fuelled the requirement for remote experiences and touchless transactions. As a result, enterprises are increasingly investing in cloud management platforms, digital payment solutions, and employee experience management tools to build more productivity into their day-to-day work.

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Customer Experience: The Next Battleground in Digital Lending

Customer Experience in Digital Lending

The banks and lenders today face a stern test of how they can reduce the customer attrition rate for their institutions. Today’s borrowers expect the onboarding and lending process to be fast and convenient – more and more customers now expect it to be done digitally without an actual visit to the lender’s premises.
It is the driving factor behind lenders going through a digital transformation for their services to provide the best customer experiences.

Digital Lending has been an exponentially growing global phenomenon over the past few years. It may have been initially dismissed as a ‘buzzword’ with no universally articulated definition, but the bold foray of Fintech startups and tech giants into the grey space has resolved all market doubts.

And the result has been spectacular.

The global market size of digital lending platforms reached a value of $8.6 Billion in 2021 and expected to reach US$ 20.3 Billion by 2027. This translates to a Compound Annual Growth Rate (CAGR) of 15.39% during 2021-2027.

Increasing consumer demands and expectations have created new markets for alternative methods of borrowing money. And businesses have been quick to understand the importance of customer experience as a differentiating factor. They are proactively leveraging the opportunity to drive efficiency, cut down on costs, and expand.

The competition in the post-pandemic digital lending market is intense, especially for the prime Millennial segment. With a plethora of such players in the market today, it is indeed becoming increasingly difficult for companies to differentiate their offerings. This is precisely where customer experience takes precedence. A great digital customer experience involves understanding user needs, creating a strategic design framework, creating design with emotion and empathy among others. With all other key variables being in a level field, customer experience in digital lending is set to be in the driving seat.

Digital lending: primary drivers of growth

Here’s a close look at the primary factors that are driving this revolution and contributing to superior customer experience in digital lending today:

Digital Lending key growth drivers

Market Impact of Millennials and Generation Z

An influx of tech-savvy Millennials and Generation Z consumers into the financial markets has brought a fundamental shift in consumer ideologies and behaviors. ‘Instant gratification’ is the key for them and digital habits such as online food delivery, cab booking, and grocery/essential shopping has only reiterated this mindset. They have a stronger emotional connection with technology and new-age brands such as Apple, Uber, Amazon, and Google. The perceived ease of use and delight of digital-only products (e.g. Dropbox) is sought to be emulated across all digital experiences.

Hence, this is both an opportunity and a threat for financial organizations. To stay relevant in the market and fend off competitors, there was a dire need for both short and long-term financial instruments that fit into the profiles of such consumers.

Data Collection and Associated Analytics

The proliferation of smartphones in consumer habits is driving more than half of the traffic on the Internet today. With access to a number of digital services, engagement is being driven like never before. The result is an accumulation of data points that can be smartly leveraged by financial companies.

The silver lining? Lenders have the ability to actively analyze the spending habits and repayment schedules of users and profile them with unprecedented accuracy. With such abundant data sets, significant value in the financial sector can now be driven.

Added capabilities in their arsenal include:

  • Generating new revenue streams via data-driven offers and recommendations.
  • Extending better services and security features to customers, such as the detecting card frauds.
  • Managing the risk of lending to customers by determining the probability of repayments.
  • Leveraging Machine Learning techniques to connect relevant card members with the right merchants.
  • Offering market insights to customers while boosting engagement and trust.

Introduction of Innovative Business Models

The inception of multiple digital lending business models to meet varying customer needs and regulatory requirements has only made the case stronger. With niche operations, companies are now able to reach customers who were not able to access financial services in the past. Innovation in space has fended off challenges related to geography, higher transaction costs, and transparency.

Primary digital lending models today include:

  • Online and Mobile Lending Platforms: Offer end-to-end digital lending products via purely mobile or web-based platforms. The entire workflow of lending ranging from customer acquisition, loan distribution, and customer engagement is digital.
  • E-commerce and Social Platforms: Lending is not the core value proposition of such platforms. They instead leverage it as an engagement strategy to boost customer retention and sales.
  • Marketplace Platforms: A typical marketplace where specific algorithms match borrowers and lenders. An initiation or subscription fee is usually charged by lenders.
  • P2P Platforms: Such platforms use profiles and data to match borrowers with institutional or individual lenders. They often include support for repayment and collection processes.
  • Supply Chain Lenders: Short-term and digital working capital loans for SMEs for various needs such as purchasing inventory from distributors or pay-as-you-go financing.
  • Tech-powered Lenders: Traditional lenders with digitized lending processes that include digital acquisition channels and repayment options.

Enablement of Regulatory Environments

With the economic benefits of digital lending now evident, governments around the world have been embracing the shift. In fact, they have been coming up with regulatory frameworks that protect the interest of all the involved stakeholders. Prominent motivators in the sector by global governments include:

  • Issuance of Bit Licenses by the US Government for businesses that deal in cryptocurrencies.
  • Drafted rules for digital lending, such as the ‘Guiding Opinions on
  • Promoting the Healthy Development of Internet Finance (GOPHD)’ by central regulators in China.
  • Implementation of India Stack, an open architecture platform for authentication and data access in India.
  • European Union’s PSD2 (Second Payment Service Directive) regulation enables customers to share sensitive financial data through secured third-party APIs.

With a legal and officially recognized framework of operations, market inhibitors have been efficiently combated. For instance, due to the legal, regulatory vacuum in China, ‘shadow banking’ participants prevailed in the market. This often led to funding mismanagement and liquidity issues for key stakeholders.

Better Speed of Operations and Lower Costs

Digital lending is backed by technologies that eliminate operational bottlenecks and significantly speed up the process of loan approvals and dispersals. An ideal tool can automate the underwriting and approval processes. As a result, lenders are now able to:

  • Execute real-time data assessment for application approvals or rejection.
  • Undertake quicker loan decisions and maximize customer engagement.
  • Constantly monitoring the creditworthiness of borrowers.

At the same time, digital lending business models are much more cost-effective than traditional banking models. Lenders do not have to maintain brick-and-mortar structures or pay for expensive legacy IT systems. Hence, with a significantly lower cost structure, customers receive more affordable loans and access to new financial tools.

How to build a great customer experience in digital lending

The first step to building a great customer experience in digital lending begins with the onboarding process. The very first contact with your website, company and services need to leave a lasting impression. You need to prove why your lending terms are good for users, how they can get money, and which services might be in their scope of interest. The whole interaction should make the potential customers familiar with your services. It inadvertently increases the chance of them wanting more and coming back often to you. Below are 5 ways you can enhance the customer experience to lower the churn rate.

4 Ways to Enhance Customer Experience in Digital Lending

#1. Allow customers to self service

Lenders can provide a good customer experience by eliminating excessive or unreasonable document requests or the submission of multiple applications for multiple products. They can include provisions for easy-to-use and quick processes such as eKYC, e-sign and digital locker with intuitive third-party integrations. Also, easy access to credit scores from the relevant credit bureaus and the subsequent verification of documents in real-time enhance the experience.

A borrower will need more than just necessary product information to make an educated choice. A website or app that can provide support related answers to all their queries across the platform is what every customer requires. Allowing such self-service capabilities improves consumer satisfaction levels, customer retention, and increases conversion rates. User-friendly design, cohesive domain, and consistent web design show customers that they can trust you.

#2. Maintain consistency across all touchpoints

Modern borrowers expect an omnichannel experience from their lenders.

People using digital lending services often switch between devices before completing the activity. Today lenders need to understand the importance of cross channel journeys and the need to extend innovative cross-channel integrations. Also, frictionless digital experiences with near-real-time accountability and continuity across digital and in-person experiences go a long way.

Successful digital lending customer experiences are the ones that deliver a truly seamless multichannel experience.

#3. Adopt financial technology

The time is now for lenders to catch up with the latest technologies to find great opportunities to improve their customer experience. Enhanced security of platforms using biometrics such as voice identification and eye scanners is a great example of how digital is improving the lending business in appeasing customers. Not only this, lenders now have provisions in place for detecting frauds and integration with payment gateways for quicker decision making and disbursal.

Old obsolete banking systems are one of the major attrition factors for lenders as customers now have multiple options to choose from. Good-architectured mobile apps, statistically, have lower churn rates after customer onboarding. This is because the majority of users download an app following the reviews in the Play Store or App Store or recommendations of friends or relatives.

However, when developing an app, consider making it easy to navigate. Solutions with everything at hand are highly appreciated by customers.

#4. Curate personalized customer experience

Personalization and segmentation of messaging and services using marketing automation tools such as CRM systems help a lender stay relevant in this highly competitive market. Successful lenders offer relationship and loyalty pricing tiers and exclusive benefits in a bid to boost retention. They also extend real-time visibility into the status of applications and deliver effective customer-centric communication.

Lending institutions need to leverage customer data to capture untapped opportunities for personalization. According to HubSpot, 59% of customers value the personalized banking experience approach over response speed when it comes to customer service.

Transforming the loan origination journey

#1. Customer Acquisition and Data Capture

Banks use a combination of online channels like emails, social media, SMS blasts, AI chatbots, etc. to attract customers and gather customer data. Banks then use this data to curate personalized digital lending offerings to the customer in an attempt to acquire them to offer their services.

Once the customer data is acquired, banks use the eKYC (electronic Know-Your-Customer) system to automate identity verification. The customers no longer need to physically visit a facility to submit documents for verification. The majority of eKYC platforms also give users access to public or private sector records, which can be useful when a bank wants to improve the quality of its customer data.

#2. Analytics & Data Consumption

Digital lending is mostly about having access to more data and using that data to generate more precise, timely, and automated underwriting decisions. Banks can quickly rate customers and make credit decisions automatically by deploying sophisticated algorithms and data.

A lending software called a Loan Origination System (LOS) uses relatively little manual intervention to automatically gather customer information from pertinent sources, score their credit, and make loan credit choices. The data is loaded into sophisticated algorithms or a ready-made solution to forecast customers’ ability and willingness to repay. The result is obvious: decisions are taken quickly, turnaround times are shortened, and customer satisfaction levels are raised.

#3 Disbursement and Repayment

In the case of digital lending, banks use digital means to both remotely disburse loans and collect repayments. Effective channels for loan disbursement and repayment from partners include things like mobile wallets and e-commerce accounts. By removing pointless paperwork, these cashless channels demonstrate that operational efficiency may be increased.

Additionally, they offer a transparent audit trail, which can help lenders stop fraud. Banks can also consider a Loan Management System if they wish to get a comprehensive perspective of each customer’s lending journey. Customizable repayment plans and durations, aid banks in the proactive identification, classification, and management of loans.

#4 Collection and Asset Management

Data and algorithms are used by banks to support their collecting efforts. Software called Loan Collection System can also assist banks in streamlining disbursement and repayment.

Digital loans, like other loans, include delinquent borrowers being blacklisted and losing access to future credit, which can be a great motivation for them to repay. To help customers comprehend the long-term financial consequences of a bad credit score and to minimize collection efforts, banks are advised to provide them with the required information.

#5 Customer Engagement

By utilizing digital channels and client data, one may create an intuitive, practical, and customized customer experience. This is a two-way communication that involves both inbound (borrower to lender) and outbound(lender-to-customer) channels.

Banks analyze a customer’s spending pattern and send them personalized messages, reminders, and product offers. Customers also can take control of their loan account and manage repayment schedule, raise complaints, ask queries via simple SMS services, contact center help, self-service portals, chatbots etc. This clear open two-way communication enhances a bank’s effort to improve customer experience at every touchpoint of the customer’s digital lending journey.

Additional tips to design a human centric borrowing platform for customers

Appeal to the rational mind

When it comes to money, the rational mind takes over the emotional mind for humans. And if someone had a bad lending experience previously, they are less likely to entrust a new lending platform. Thus, it is important to be as transparent as possible in all the digital lending steps from onboarding to payback by customer. Despite all that, some customers just won’t use your platform more than their utmost requirements and you have to accept that fact.

Give back control to customer

People like to be in control of their finances. A lending platform that allows customizing loan offers based on loan tenure, loan amount, repayment dates, repayment modes, etc. will always be preferred by customers. Designing the app for simple navigation and actions allows customers to have a great experience during the whole lending process.

Keep it simple

Customers already feel overwhelmed by their monetary needs, they don’t need a poorly designed app to add to their misery. The whole process of onboarding, loan assessment and EMI calculation, document uploading and verification, and loan disbursement should be as simple as it can be. Every step should be clearly instructed on what’s been asked from the customer and how to proceed further.

Build intelligent chatbot AI

Another factor that can surely enhance customer experience during the whole lending process is the presence of an assistant. An intelligent chatbot AI can actively help the user to not only guide to their required sections in the app, but also provide necessary information on the go to help ease the whole process.

Consumer credit market trends in the USA

The immediate effect of the COVID-19 pandemic saw a dramatic slowdown of unsecured credit products such as personal loans and credit cards when compared to previous quarters. However, after the reopening of America and the expected addition of jobs and wages helped turn around the declining trend and enable consumers to manage their debts going forward. The US consumer borrowing witnessed a month upon month surge in March-April 2022. This growth was aided by rising prices and continued purchasing power of American consumers.
As the image below shows, the total credit increased $38.1 billion from the prior month after a downwardly revised $47.3 billion gain in March.

Digital lending trends

Source: Bloomberg

Digital Lending Platforms: many players, many intents

Let’s take a quick look at the existing digital lending ecosystem and look at what global market players are offering in this space:

  • U.S Bank: Recently launched a digital lending platform that automates the process from application to funding. Applications can be submitted and reviewed on any device and borrowers can even review loan terms remotely and electronically sign documents. And with an integrated ecosystem, customers can initiate application processes on one channel and pick them up on another.
  • The Halo App: This is a peer-to-peer digital lending platform that leverages an intuitive mobile application to connect borrowers and lenders. It has been specially created to cater to the small-dollar loan requirements of users. It is borrower-centric in the sense that they can slice their payments into smaller pieces. Lenders are available round the clock and borrowers can receive instant cash.

The Halo App

  • Kabbage: Dedicated platform for entrepreneurs and small businesses that provides them access to up to US$250,000 in loans. It takes users just 10 minutes to verify their eligibility. A highlight of the platform is the elimination of origination fees and prepayment penalties. And with an integrated interlinking of business-related information, users can drive automated financial reviews.
  • Faircent: a P2P lending platform that ‘connects individuals in need for credit with individuals and institutes willing to lend their access funds’
  • TurnKey Lender: Intelligent and all-in-one lending automation platform that leverages AI and big data to streamline the elements of a lending process. This ranges from origination to underwriting and servicing to the collection.
  • Better: Better provides mortgage lending, real estate, title insurance and homeowner’s insurance while removing lender fees and commissions. Better’s lenient lending policies and large agent network resulted in acquiring more than $400M in funding and providing $7.9B in home loans to date.
  • PayPay: PayPay is a fintech giant in Japan who is revolutionizing cashless payment. It has more than 47 million customers and offers a range of financial services, including banking, securities, loans, investments, and insurance, to services available across various scenes, such as tax & bill payments, online shopping, restaurants, hotels, and more.PayPay
  • Open Lending: Open Lending serves automotive loan borrowers using big data and high finance to provide risk modeling and decision-making software. The company’s Lenders Protection solutions help lenders utilize proprietary data and advanced decision analytics to increase near and non-prime auto loan volumes, leading to higher yields with less significant risk.
  • SALT Lending: The unique feature of SALT is that it lets borrowers leverage their cryptocurrency for loans. Borrowers can agree to terms ranging from one to 36 months on loans available for Bitcoin, Ether, Litecoin and Dogecoin. It uses blockchain evidence-based, chain-of-custody smart contracts to ensure the crypto is safely transferred. After its huge success in the US, SALT is now expanding its business to countries like New Zealand, Brazil, Switzerland and the U.K.
  • OnDeck: OnDeck is a B2B digital lender which provides personalized loans and lines of credit to small and midsize businesses. Businesses can identify the type of business they operate (restaurant, retail, tech company, etc.) and even define the purpose of the loan (expanding business, hiring employees, etc.). OnDeck accordingly personalizes the payment structure that best fits the situation.

The Verdict

As we venture into a bold new era of digital lending, customer experience is set to play the lead role in the story of financial empowerment. Lenders that can smartly manage ever-changing customer expectations, emerging technological capabilities and shifting market conditions will always be a step ahead of their competitors. As sources of consumer data grow every year, lending institutions will be able to increasingly focus on consumer needs.

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