Every business has undergone a revolution due to the rapid speed of technological advancement, and the financial technology (fintech) industry is no different. While FinTech companies, especially Lending Service Providers (LSPs), still struggle to obtain loans and enhance their book in the traditional manner, they are beginning to see a glimmer of hope in robust AI solutions. Rezo.ai’s Chief Growth Officer, Dr. Rashi Gupta, demonstrates how conversational AI solutions are revolutionizing loan collecting efforts with creativity, compliance, and unmatched efficiency.
RBI guidelines being tightened:
According to Dr. Gupta, the RBI’s recent guidelines regarding lending arrangements between digital lenders and Non-Banking Financial Companies (NBFCs) serve as the context for the industry-changing innovation in loan collection. She notes that prior to these, digital lenders frequently provided guarantees to their lending partners, including banks and NBFCs, ranging from 20% to 100%, to safeguard them against losses brought on by loan defaults. However, the RBI has since established a cap, requiring that the total amount of these guarantees not exceed 5% of the total loan portfolio.
“The RBI’s tighter restrictions have given lenders a sizable 95% of the possible losses in the event of defaults. In order to adjust their business models to deal with escalating costs, NBFCs and FinTechs in the digital lending sector have been obliged to make significant operational changes. NBFCs and LSPs must employ proactive measures to get loans and enhance their financial status in order to navigate this difficult terrain and maintain their relationships, the expert warns.
Diversification:
According to Rezo.ai’s Chief Growth Officer, conversational AI solutions are a safe haven for FinTech companies and LSPs in the face of regulatory challenges because they not only increase automation but also the ability to reach large audiences, which would not be possible without traditional contact centers burning a hole in the pocket. Innovative Conversational AI-powered products are giving FinTech and LSPs a helping hand in optimizing their financial portfolios by recovering loans with extraordinary efficiency.
NPAs are a major issue in the lending sector, whether it be with conventional banks, financial services firms, or third party LSPs, according to Dr. Gupta. In a sense, what we’ve seen is that lowering NPAs requires a tailored approach to each borrower from the very first payment that’s due.
Human loan recovery agents frequently overlook important components of a borrower’s profile, which, if used well, can be quite tactical in getting them to make on-time payments.
Elevated Connect Rate:
The AI agents distribute calls while taking into account timings, preferred languages, and other pertinent aspects based on the customer’s past data, resulting in an impressive 90% connect rate.
The lower the NPAs, the better the recovery, which emphasizes the preventive effect of AI solutions on preventing loans from becoming NPA. This not only boosts LSPs’ revenue but also lowers their operating expenses, according to Dr. Gupta.
Capacity development
The capability of a contact center with tens of thousands of human agents is comparable to that of conversational AI systems, which can manage millions of automated calls each day. She claims that many NBFCs, banks, and FinTechs, now including LSPs, have been able to optimize their financial portfolios and significantly cut NPAs using AI-driven insights and automation due to the capacity-building capabilities of AI-powered technologies.
Getting Past the Language Barrier:
FinTech must deal with rural markets as well because of its inherent flexibility in offering loans to borrowers with various demographics. Contrary to popular assumption in some places, rural markets are quite diversified in terms of varying regional languages, dialects, accents, and communication styles. According to Dr. Gupta, it’s critical to understand the subtleties of an AI-powered connection with rural consumers. For instance, a phrase may have several meanings or have varied connotations depending on the context. The capacity of today’s AI systems to communicate and record responses in a variety of Indian languages and dialects provides a hugely beneficial benefit when reminding a borrower of his or her payment default.
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