Harnessing Technology to Transform NBFC Operations: The Radian Finserv Approach

CXOToday has engaged in an exclusive interview with Sumit Sharma, Founder-Radian Finserv. 

1. Can you provide an overview of how technology is transforming the operations of NBFCs?

Advancements in technology are revolutionizing the financial services industry, and NBFCs are leading the way. Technology enhances the reach and efficiency of financial services, providing real-time access to loan information and seamless payments through integrated gateways. It enables faster credit scoring using standardized protocols, supports better decision-making with advanced MIS and analytics, and streamlines processes through user-friendly apps. Additionally, technology ensures consistent tracking and monitoring of operations at scale, significantly improving overall service quality and efficiency.

2. Could you elaborate on the specific technologies that Radian Finserv has implemented to enhance its operations?

Radian is an NBFC specializing in secured lending, leveraging a cutting-edge technology platform that rivals the best in the financial services sector. Our use of Loan Origination System (LOS) and Loan Management System (LMS) enables us to centralize all individual loans under one platform. Our in-house app streamlines the entire customer journey, incorporating quality checks to ensure consistent and compliant processes. Through our customer app and website, clients can easily track and manage their loans. Centrally managed operations ensure consistent loan processing and servicing across all locations, with data stored and analyzed to inform decision-making.

3. How are these technologies helping in improving customer service and operational efficiency?

Radian ensures consistency across locations and individual loans, making operations more efficient and faster. We provide customers with the information they need to manage their loans effectively, eliminating the need to visit branches through digital information movement. Additionally, we offer convenient doorstep services for a seamless experience.

4. How is technology playing a role in promoting financial inclusion in the rural and semi-urban areas of India, often referred to as Real Bharat?

India’s hinterland is quickly embracing technology, aiding financial inclusion. Payment gateways simplify and secure repayments. Smartphone and app adoption gives customers real-time access to information. Technology boosts financial literacy, making rural and semi-urban borrowers more responsible. Consistent credit scoring models enable faster, reliable evaluations, while improved operations and tracking ensure accuracy and efficiency.

5. Can you share some success stories or case studies where Radian Finserv has successfully used technology to reach underserved populations?

Radian is building a secured loans organization with diverse products and offerings. Our customer segments across MSME loans, loans against property, and gold loans often overlap, allowing us to meet various customer needs. Starting with gold loans, we’ve seen customers seeking other, larger loans. For instance, a shop owner who previously took an MSME loan recently obtained a gold loan. With information stored in our app, we quickly referenced basic data and KYC to proceed immediately. In another case, a gold loan customer smoothly released their ornaments for a period, thanks to the easily accessible information in the Radian app.

6. What are the biggest challenges NBFCs face in integrating new technologies, particularly in rural areas?

One challenge relates to connectivity, where we occasionally struggle to capture all information at the customer doorstep when visiting the customer residence as part of the evaluation process, or as part of the gold loan offering at the customer doorstep.

Another is the adoption of the technology and the digital savvy among customers. This is not related to rural India alone – even in cities, while customers are comfortable with technology, there are instances where effective in person communication provides far greater comfort than a nifty app an tech based solution. In many ways, we have experienced that customer service is effectively enhanced through the use of technology, but meaningful and sustainable customer acquisition, particularly in the field of lending, leans heavily on in person interaction rather than pureplay digital adoption.

7. How is Radian Finserv addressing these challenges to ensure seamless implementation and adoption?

As mentioned above, while relying on technology, Radian is working to build a physical distribution to help ensure that we reach and engage with customers directly. Technology is being used at the back of a physical distribution rather than instead of.

On the issue of connectivity, we have not yet faced this issue, as we are early in the org life cycle and have not expanded yet beyond about 20 cities. However, we expect this concern to crop up as we start to scale beyond the cities – we are working to capture data at the customer location, and upload it at the branch so as to ensure that all data resides on our systems.

8. What initiatives has Radian Finserv undertaken to ensure that even the most remote populations can access financial services through mobile technology?

As we start to venture deeper into semi urban and rural areas, we would work on having our branches and extensions of branches with full connectivity in these areas. We would also look to onboard customers through the digital channels and provide them the opportunity to access data and information through their smartphones using our in-house app. We conduct regular sessions with customers to provide financial education.

Radian’s stated aim is to enhance financial inclusion through the use of different products and services, including small ticket loans to individuals for income generation. We would continue to build processes and capability to enhance customer knowledge and understanding so as to be able to use technology to access their loans. As we expand into the hinterland of India, we would continue to bring in our product offerings through the Radian app so that customers can use their mobile phones to access and service the loans.

9. What advice would you give to emerging NBFCs looking to leverage technology for operational efficiency and financial inclusion?

It would be presumptuous of us to proffer advice to other NBFCs. However, happy to speak about our experience, which suggests that in the lending space (particularly for secured, collateral based lending), customers value ease and comfort, together with strong engagement, more than just a highly evolved app and technology offering. This is particularly true given the need for a physical interaction as part of the assessment/ handover of the collateral. We thus feel that it is important to have a connect on the ground, and that technology would struggle to replace this connect, at least in the foreseeable future.

For unsecured app based lending, technology builds the backbone of the operation, and there is no physical meeting needed. However, Radian does not presently operate in that space. On financial inclusion spearheaded by microlending, which is also unsecured, technology plays a part in building efficiency, but has not replaced (and is unlikely to replace) the impact of the regular physical meetings in the group lending model.

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