CEOs, CIOs and technology heads from the leading NBFC companies of India, share their views on the role of blockchain technology at the NBFC Conclave:
Kundan Patil, Chief Information Officer, Volkswagen Finance
Large banks of India have initiated blockchain technology. These banks have good IT budgets to back the blockchain technology. But, most of the NBFCs in India don’t have funds to adopt blockchain. Also, banks have customer data and they understand customer needs better than NBFCs. We are in the process of adopting latest technologies.
Hackers have already started using blockchain technology and we need to use blockchain for our benefits. BFSI companies need to come together for effective use of blockchain. NBFC companies face risks from the banks for scouring of the funds and business.
We need to eliminate the intermediaries to bring down the cost of funds, and to offer better rates to our customers. NBFCs are lagging in centralized data and dependent on other data, so we need to solve the problems related to customer data. In the future, blockchain technology will be useful to reduce the intermediators and it will increase the speed of the business. Blockchain technology will also bring down the cost of business and will further reduce the frauds.
Dr Dhruv Desai, Director & COO, Tradebulls Securities
Digital ledger technology is like the blockchain technology. We are a trustless society; blockchain and DLT helps to bring trust back to the society. India has leapfrogging technologies. The prevalence of credit card was there from many years in western countries, it has taken time in Indian market. The use cases of DLT and blockchain technology are limited in India. Most of the startup financial organizations use blockchain technology because the startups don’t have funds like big banks. In UAE, all the government documentation related to land, property and law matters are stored in DLT. It has reduced / eliminated the role of accountants and lawyers. Blockchain technology is still maturing in India.
Jyothirlatha B, CTO, DHFL
NBFC companies require a lot of digitization in housing finance, credit decision process, verification of property and legal obligation of the property. Data should be available to the NBFCs. There are use cases of blockchain especially in mortgage – blockchain will help in reducing the dependence on credit agencies, land survey, etc. The obligation of the property and other work need to be through digital channels. In housing finance there is rise in cost to income ratio because of the intermediaries.
It is easy for fraudsters to attack the central customer data base of the company. The blockchain technology helps in replication of the customer data in multiple places, so it is not easy for the fraudsters to manipulate the customer data. Blockchain will evolve in the coming years.
Sunit Vakharia, CIO, BOB Financial Solutions
NBFCs have adopted traditional methods for doing business, most of the NBFCs follow banks for understanding business and market. There are more blockchain cases in Indian banks compared to NBFCs, especially in transactions and treasury business. NBFCs in India are mainly divided into housing finance, lending and MSME lending. We need to search the areas where blockchain technology will play a crucial role for us, but still we are not able to find out the purpose of the blockchain technology. For us, digital lending means satisfying the customer needs in near real time. Blockchain technology can help us to identify the good and bad customers. The technology is still under the verification stage for the industry.
Suresh Shan, Head – Business Information & Innovations, Mahindra Finance
Mahindra Finance has deployed blockchain technology 8 months ago. It has helped us in verification of customer documents. The Indian customer prefers NBFC over banks for lending as it requires less documents. Blockchain is created by someone who does not like the traditional banking. Till date we have received only 6-7 blockchain transactions from our customers. It means people are still be afraid of the use of digital technology for transactions; customers still prefer manual process for authentication. We have 2 types of customers – one has money and others don’t. 58% of the people don’t have the money, so we must target 42% of the customers who have the money.
The rural customer has good knowledge about the latest technologies. The BFSI industry is going through tougher times, majority of our suppliers don’t have money. E-business is more depend on emotions and less on electronics.
