The move enables a seamless work from the home scenario for Edelweiss: Mehernosh Tata
Are MSMEs open to accepting and adopting digital processes? Through constant customer engagement, Edelweiss Retail Finance has found the answer to be in the affirmative. As Mehernosh Tata, CEO, says, there is a marked shift in the customer mindset in opting for digital loans, provided the process is simple, hassle free, ensures minimal documentation and faster processing while maintaining data privacy.
The company has used this insight to create an end-to-end digital lending platform that ensures speedy decisions. Says Tata: “Currently, the platform is being used by our sales team and channel partners for contactless transferring of customer data to our platform for review and decision-making. We expect this platform to significantly improve our sales efficiencies and also bring down file processing costs. Additionally, it helps us decide cases faster, meeting the needs of our micro and small enterprises.”
6 MONTHS’ REVIEW TO DECIDE
Edelweiss Retail Finance has designed surrogate products that review a customer’s banking behavior, GST, etc, over the past 6 months and arrive at a loan decision quickly. Tata mentions that using micro services, the company also looks at implementing more innovative offerings for its MSME customers. “We have implemented AI-based tools in risk analytics and have segregated our customers basis their payment behavior in the last 6 months, their propensity to bounce in the current covid period, etc. This helps create customer cohorts and improve our collection efficiencies. These propensity models have worked out well in the last 2 months, and we continue to improve them via AI/ML as more data points are added to it,” he adds.
The company’s objective is to work towards capturing data in a structured manner. It uses analytics to have a targeted and focused approach to cohort customers and come up with the right fit for clients.
CLOUD ADOPTION
Tata feels the covid pandemic has heightened the strategic importance of integrating digital channels into how financial services providers engage with customers. Financial institutions are rapidly adjusting to serving customers almost entirely digitally. In late 2019, Edelweiss Retail Finance had moved nearly all its applications to cloud and rolled out Office 365. Tata says both these moves have enabled a seamless work from the home scenario for the company and since March, it has started leveraging SaaS platforms wherever relevant and also simplified its WAN to operate over standard broadband.
Edelweiss Retail Finance has re-aligned its processes and digitized customer journeys in tandem with shifting consumer behaviour and needs. Tata says: “We are working on a contactless process to receive loan applications and further process there. We have implemented solutions like machine-learning based banking analysis, video KYC, video PD and VoiceBot enabled collections. These integrations have helped us enhance customer acquisition, deepen engagement and lower our per file processing costs. It has also helped enhance the efficiency and speed of loan approvals and disbursements.”
TECHNOLOGY PARTNERS
Edelweiss has been one of the early adopters of technology in the lending space. It has been at the forefront of testing and adopting several digital initiatives spanning customer acquisition, credit decision architecture, onboarding and customer life cycle management. Tata says this has helped the company to stay ahead of the curve while anticipating the future needs of its MSME clients. “We work with several technology partners across the value chain, right from large enterprises to fintechs. We have made good inroads in building low-friction user journeys. We are exploring ways to have machine learning assist users to improve their interactions further, reducing errors and bringing about better operational efficiencies,” he points out further.
DISRUPTIONS TO AID LENDING
Even in the current testing times, the company’s strong belief in customer engagement has been a key differentiator for it. While it has been physically distanced, it has come closer to the customer, through its quick adoption of technology, says Tata.
He adds: “Technology will gradually transform MSME operations in India and provide solutions to address financing needs of this segment by making access to credit more viable. Digital disruptions such as cloud computing, analytics, machine learning and AI, will aid sustainable SME lending.”
Of the 63 million MSMSEs in India, only 12 million have registered under GST. Tata feels there is a need to encourage more enterprises to move to formal channels of business by offering interest subsidies, tax breaks etc in the first few years. Encouraging more MSMEs to move to the formal sector, he feels, will further assist them in obtaining debt capital at cheaper rates than currently.
