RESEARCH REPORT

In brief

In brief

  • To stay relevant in a rapidly evolving digital era, Indian banks and NBFCs must transform their lending business.
  • A scalable lending platform will help banks and other lenders pivot at speed and scale, be agile, and innovate quickly.
  • The proliferation of new players – online and retail banks, fintech companies and NBFCs – is a threat to legacy Indian banks.
  • Investing in the latest technologies – AI, blockchain and cloud – could help banks increase loan volumes, cut costs and enhance user experience.


A testimony to changing times

As digital proliferates all businesses and industries across the globe, traditional lending business, as we know it, is dying a fast death. Over 58 percent of retail customers purchase financial products online through the company’s website or a third-party online service provider, according to Accenture’s Global Consumer Pulse Research 2018. About 60 percent customers use digital channels like portals, text and voice chat for post-purchase self-service. Additionally, 15 percent use tele-helpdesks for addressing their servicing needs.

This is just the beginning. About 67 percent of banking executives believe consumers will do most of their saving, investing, and borrowing through non-finance platform companies like Amazon.com, Inc. and Google LLC in five years, according to a 2018 Accenture and Oxford Economics study. And, over half of customer interactions will be handled by virtual assistants.

The key takeaway: Indian banks and lenders can’t turn their backs on technology. They need to make and sustain customer-centric digital experiences at scale and speed. How do they do this? By adopting a scalable lending platform that is integrated into the daily digital lives of customers and transforms the lending experience to be relevant in the New.

The adoption of a flexible and scalable lending platform, and a decoupled technology architecture, could boost loan volumes by 15 to 20 percent and cut operational costs by 20 percent, as indicated by our experience with global banks.

The lending platform of the new in action

New players in the lending space are reimagining business by harnessing the latest technologies. They are stepping up investments, especially in AI, blockchain and cloud, to offer seamless, new-age user experience via intelligent applications. Here are some of the ways they are reinventing legacy lending processes.

Disrupting the customer onboarding journey

Onboarding a borrower has been a complex process, especially for collateralized loans. It involves lead management, application, documentation, underwriting, fraud checks, valuation, decision, disbursal documentation and final loan disbursement. Fintechs were the first to pivot to digital onboarding, followed by other financial services players. They use digital footprints of customers to proactively propose offerings. This is followed up with seamless customer interactions across channels — from identical mobile-first to other digital interfaces. They use digital verified data to speed up the application and verification process. In addition, leading banks leverage analytics for efficient underwriting and fraud detection. AI and deep learning technologies help banks identify patterns in unstructured data from various digital sources to assess the credit worthiness of clients and detect fraud.

Unlocking “trapped” value

The digital lending journey based on a scalable platform can drive significant value for lenders through improved sales effectiveness and lower operating costs. Our experience reveals that loan volumes can go up by as much as 20 percent, while loan processing can speed up by 25-40 percent. A digital platform can also cut onboarding costs through elimination of paper and resources, as well as lower underwriting and fraud-related costs by implementing intelligent decisioning.

In the thick of things

Accenture has already implemented its Digital Signal to Sales (DS2S) tool for its banking clients in North America and APAC. DS2S is helping clients capture consumer digital footprints to generate millions of curated leads at a fraction of marketing costs. We’re also helping global clients move to WhatsApp and AI-based loan application journeys that seamlessly fit into the everyday lives of customers.

Digital lending platform of the future

To transform to future-ready lending platforms, banks and NBFCs must weigh in critical implementation factors.

  • Reimagine the customer onboarding process to offer paperless, omnichannel and seamless experiences.
  • Plan for exceptions in terms of process design and subsequent implementations. Sticking to the design principles will help contain costs and prevent negative business implications.
  • Implement a decoupled architecture will help banks and other lending businesses to align to a dynamic environment.
  • Create a device and form-independent design and the platform to accommodate changing job roles and mobile-first experiences.
  • Chart out a solid roadmap to prioritize different products, along with related processes and cultural changes.

The Accenture digital lending platform

To make loan origination flexible and relevant amid rapid changes in the lending market, the Accenture Digital Lending Platform (DLP) helps clients quickly adapt to any change across any part of the origination journey. It is an in-house solution that reduces dependence on vendors and helps manage both retail and commercial lending journeys.

Download our latest thought leadership to know how Indian banks can align their lending processes to the digital paradigm and stay relevant in a mobile-first landscape.

Sonali Kulkarni

Managing Director - Financial Services, Accenture India


Debayan Sinha

Senior Manager - Financial Services, Accenture Consulting

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