CXOToday has engaged in an exclusive interview with Vishal Sharma, Cofounder & CEO, AdvaRisk, an ICICI and NABARD backed Fintech startup enabling financial institutions with end-to-end collateral management using its AI-powered data intelligence platform.
- What are the current challenges faced in collateral-based lending ecosystem?
The collateral-based lending ecosystem in India faces several challenges, primarily due to the complexities of managing and verifying real estate and land records used as collateral. A significant issue is the fragmented and manual nature of property data management. Property records are often maintained in various regional languages and formats, making standardization and accurate verification difficult. Additionally, the unorganized nature of databases leads to inefficiencies in legal due diligence, increasing the risk of fraud. This time-consuming process can delay loan approvals and heighten the risk of Non-Performing Assets (NPAs), which is a major challenge for financial institutions.
- What led you to start AdvaRisk?
AdvaRisk was founded in 2016 with the vision to address the growing challenges in the financial sector, particularly in identifying and mitigating the risks associated with corporate loan defaults. We initially focused on analyzing early warning signs of potential defaulters to help banks stay ahead of risks. However, our approach didn’t gain the expected traction with banks. Determined to make a meaningful impact, we pivoted to managing bank collaterals, including real-time monitoring for red flags, with the crucial support of ICICI Bank, one of our earliest investors. This shift allowed us to evolve and expand our services, leading to the comprehensive solutions we offer today.
- What are the key products and services that AdvaRisk offers?
AdvaRisk’s two primary products are AdvaSMART and AdvaNPA. AdvaSMART leverages digitized government land records to help financial institutions find new leads, swiftly onboard customers, evaluate collateral for deviations, and monitor those collaterals throughout the loan cycle, thereby reducing instances of fraud. A key feature of AdvaSMART is the standardization of property databases across different states, enabling financial institutions to process loan applications more efficiently.
On the other hand, AdvaNPA supports banks and NBFCs in their recovery efforts by identifying undisclosed assets of defaulters and conducting forensic analysis.
- Can you explain how AdvaRisk leverages technologies to help banks and financial institutions navigate the complexities involved in maintaining their credit portfolio and reduce frauds and NPA?
AdvaRisk leverages cutting-edge technologies like Generative AI and Machine Learning to automate the standardization of property records, which are often maintained in various languages and formats. This standardization is essential for accurate verification and legal compliance. Additionally, our AI-driven tools help banks identify anomalies and detect fraud early in the process, which contributes to a reduction in Non-Performing Assets (NPAs). By fully digitizing the life cycle of real estate mortgage collateral, AdvaRisk not only enhances operational efficiency but also equips financial institutions with the tools needed to maintain a robust and secure credit portfolio.
- Which financial institutions/ banks have collaborated with AdvaRisk?
AdvaRisk serves over 40 financial institutions, including some of India’s leading private, public, urban cooperative, and regional rural banks. Notable clients include ICICI Bank, Axis Bank, SBI, Punjab National Bank, Saraswat Bank, UCO Bank, SIDBI, RBL Bank, IndusInd Bank, Kotak Bank, Bank of India, IDFC, and Canara Bank, among others. These collaborations reflect the trust that major financial institutions place in AdvaRisk’s platform to effectively manage their real estate collaterals.
- Banks are strengthening their tech systems to enhance their risk management. How can Fintechs partner with banks to improve this and comply with regulatory standards?
Fintechs like AdvaRisk play a crucial role in helping banks enhance their technology, particularly in risk management and compliance. By integrating AI-driven platforms that offer real-time data analytics and automation, Fintechs can help banks streamline operations, reduce manual errors, and ensure compliance with regulatory standards. This includes real-time fraud monitoring and automated reporting systems that keep banks ahead in managing risk. Additionally, by partnering with Fintechs, banks not only increase operational efficiency but also improve risk management and compliance with evolving regulations.
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