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Digital Transformation is key to all business offering

Yashoraj Tyagi, chief technology officer, CASHe, and Bhavin Patel, Co-founder & CEO, LenDenClub, explain factors responsible for the growing segment of fintech lenders:

Mumbai-based LenDenClub is India’s first P2P lending company, hosting investors and borrowers to integrate with a tech-based distribution network to avail last-mile connectivity. It leverages technology to support borrowers. LenDenClub has partnered with agencies having offline distribution networks to bring them into the digital fold.

Bhavin Patel, Co-founder & CEO, informs: “With the partnership, customers visiting a nearby Vakrangee Kendra can now seamlessly lend and borrow through LenDenClub. Vakrangee, through its Nextgen Kendras and BharatEasy app, will now offer lending and borrowing facilities even in the remotest parts of the country. With 70% of Nextgen Vakrangee Kendra outlets, situated in tier-5 and tier-6 towns, the partnership will aid in new-age borrowing and lending permeate inner cities and remote rural towns across the country. The partnership will thus offer easy access to a large section of the unserved/underserved populace who otherwise have no access to formal credit.”

CASHe is a technology-first fintech lending company, where digital transformation and initiatives are key to all areas of its business offering. Being a fintech company, it fundamentally changes how it operates and delivers value to customers. Yashoraj Tyagi, chief technology officer, claims: “Through our tech-led initiatives in the financial ecosystem, we have successfully been able to democratise financial services by making credit available to hundreds of thousands of new-to-credit and the underserved segments of the population. Hence technology is core to what we do and is deeply interwoven into nearly all components of our business model.”

Leveraging Microsoft Tech

Apart from in house technology developed on Python and React platform, LenDenClub, is selected under ‘Microsoft for Startups, a global program dedicated to accelerating the growth trajectory of high-potential startups. Patel points out: “The engagement is helping LenDenClub leverage Microsoft’s technology and innovation to build a robust tech ecosystem and reduce NPAs to less than 1%. This came at a time when LenDenClub has been consistently achieving the lowest NPAs in the industry.”

Additionally, the technology-backed program will aid in further accelerating the company’s future growth plans in expanding its market footprint while tackling operational bottlenecks, including fraud. Patel adds: “We will use Microsoft Azure’s comprehensive AI/ML capabilities to reach a wide-scale audience in a short time, with built-in redundancy and security. Apart from technology, the platform will provide us access to Microsoft’s network companies spread across the country and the globe, for collaborations, mentorship and business support.”

Social Loan Quotient

CASHe has very robust credit lending system in place that is completely focused on automation. Yashoraj explains: “The Social Loan Quotient, an AI-based algorithm developed in-house, assesses the risk of a borrower based on the users social and mobile data footprints. The model goes beyond traditional credit-risk metrics and assesses the goodness quotient in the borrower and the ability to repay.”

CASHe is challenging the status quo and offering a viable and affordable alternative to traditional banking channels for accessibility to financial products to its customers. Yashoraj further says: “Our out-of-the-box business model leverages technology to deliver financial services in a cost-effective, swift and convenient manner. We operate in a digital world that surpasses that of a high-touch model in terms of scalability and have thus used a combination of artificial intelligence and big data to eventually build an engine that trains, learns, adapts and predicts human behaviour, which otherwise is a monumental task.”

Analytics Tools

The tech platform has helped LenDenClub to identify the right set of borrowers and lenders, leading to controlled NPAs in the company. Patel indicates: “With the integration of modern technology and analytics tools, onboarding time has been reduced.”

It is vital to employ analytics to improve marketing at every stage of the customer journey starting from onboarding them on the platform. Yashoraj affirms: “We employ the right technological infrastructure to bring together valuable insights from customer data, obtained from multiple sources to improve the efficiency of the marketing spends. For instance, at the top of the funnel, multiple data points both internal and external are leveraged to predict the propensity of customer to take the next action & their interest in the offering, in addition to the inherent risk associated with each customer. This allows us to direct our marketing spends towards individuals who are most likely to respond. Similarly, data and customer analytics used to create customer personas and segments based on risk, propensity, demography, and behaviour help define a more personalized customer experience. This is key to optimize customer engagement, improve retention & loyalty, and increase performance of marketing campaigns. The ability to put structure to all the above activities aids in process automation which allows us to build for scale, increases productivity and gives us a powerful advantage.”

Marketing On Social Media

Social media is a critical channel for CASHe to increase its user base as well as promote its products with the target audience. Yashoraj says: “Around 30% of customer acquisition happens though social media platforms. With a sizable budget allocated for marketing spends on the social media, we primarily use this medium to conduct marketing activities including announcing offers, product launches, run promotional ads and employ many other innovating strategies like influencer marketing and release product specific marketing videos that increase engagement and subsequently result in increased user adoption of the service.”

Enhancing Digitalization

As the economy rebounds post-pandemic, the critical priority for P2P lending credit managers is to build a sustainable lending environment with enhanced digitalization, both for strategic partnerships and services. Patel clarifies: “We strive to use advanced data intelligence regarding servicing and collection to make pre-emptive default forecasts based on customer repayment behaviour, account insights, and web and digital habits.”
Most market players acknowledge that black-swan events like covid are likely to become more regular in the future and that organizations should become more robust and resilient to mitigate the impact of such catastrophes. Patel feels: “Lending organizations now have a chance to restructure their operational models and emerge as contemporary, powerful, and lean entities attuned to overcoming future challenges.”

Even before the pandemic hit, CASHe was on track to outpace competition in terms of investing considerable capital to scale up its IT infrastructure and hiring the right talent. Yashoraj underlines: “We invested in cutting-edge technology that helped us to scale our platform. We developed the roadmap for the future by determining what capabilities the platform will need to remain competitive and innovative in the coming years. Hence, cloud technology has become central to our transformation efforts. As part of our digital expansion initiatives, we have embedded our platform in some of the leading payment, telecom, and financial platforms to seamlessly offer credit to a larger customer base.”

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