{"id":18885,"date":"2020-11-03T16:46:40","date_gmt":"2020-11-03T11:16:40","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=18885"},"modified":"2020-11-03T16:46:43","modified_gmt":"2020-11-03T11:16:43","slug":"contribution-of-emerging-technologies-towards-nbfcs","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/contribution-of-emerging-technologies-towards-nbfcs\/","title":{"rendered":"An Inclusive Guide on Contribution of Emerging Technologies toward NBFCs"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Non-Banking Financial Companies has attained unparalleled value in financial sector in recent times due to hassle-free lending. These entities are usually touted for delivering easy fiscal aid to individuals and businesses without imposing stringent stipulates, unlike a traditional bank. RBI is continuously striving to tighten the norms for NBFC to ensure better control. This leads to the increased borrowing rate and it is forcing NBFCs to look out for other niche markets. NBFCs are also focusing on the development of new products that cater to the need of the low-income group and urban sectors residing in the unorganized sectors.\u00a0In this article, we will look into the contribution of Emerging technologies towards NBFCs. <\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"651\" height=\"494\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/image-6.png\" alt=\"Contribution of Emerging Technologies toward NBFCs\" class=\"wp-image-18886\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/image-6.png 651w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/image-6-300x228.png 300w\" sizes=\"(max-width: 651px) 100vw, 651px\" \/><\/figure><\/div>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/contribution-of-emerging-technologies-towards-nbfcs\/#Emerging_Technologies_towards_NBFCs\" >Emerging Technologies towards NBFCs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/contribution-of-emerging-technologies-towards-nbfcs\/#Deployment_of_Artificial_Intelligence_AI_and_Machine_Learning\" >Deployment of Artificial Intelligence (AI) and Machine Learning<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/contribution-of-emerging-technologies-towards-nbfcs\/#Incorporating_Robotic_Process\" >Incorporating Robotic Process<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/contribution-of-emerging-technologies-towards-nbfcs\/#Conventional_Operating_Model_and_its_Quandaries\" >Conventional Operating Model and its Quandaries&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/contribution-of-emerging-technologies-towards-nbfcs\/#How_are_Growing_Technologies_setting_up_newer_Standards_for_NBFCs\" >How are Growing Technologies setting up newer Standards\nfor NBFCs?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/contribution-of-emerging-technologies-towards-nbfcs\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Emerging_Technologies_towards_NBFCs\"><\/span>Emerging Technologies towards NBFCs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In this circumstance, NBFCs are opting for business models underpinned by emerging technologies that seamlessly facilitate the design, deployment, and execution of services. Investment in newer and upcoming technologies and collaboration with financial institutions also led NBFCs to avert cost constraint when it comes to escalating their market size and providing services to customers. It also helps them to conquer the dominance of traditional lending in an expanding economy.&nbsp;<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/terrorist-financing-and-money-laundering-for-nbfcs\/\">A Comprehensive Analysis on Terrorist Financing &amp; Money Laundering for NBFCs<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Deployment_of_Artificial_Intelligence_AI_and_Machine_Learning\"><\/span>Deployment of Artificial Intelligence (AI) and Machine Learning\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The newer NBFC\u2019s are taking advantage of\nthe latest technology to improve every dimension of their services. It also let\nthem set up collaboration with multiple counterparts to create a productive\necosystem to ensure seamless management of existing services.&nbsp;<\/p>\n\n\n\n<p>Things like AI and machine learning led the lender to analyze customer\u2019s insight and set up an effective model for optional credit scoring. The current era of digitalization has permitted the NBFCs to establish a prompt connection with low-income customers who rely on smart devices to engage with banking-related services.&nbsp;With more and more startups opting for <a href=\"https:\/\/corpbiz.io\/nbfc-registration\"><strong>NBFC registration<\/strong><\/a>, it become essential for existing rivals to deploy digital technology within their system to gain the competitive edge. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Incorporating_Robotic_Process\"><\/span>Incorporating Robotic Process<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The robotic process helps in optimizing the\noperational workflows and escalating accuracy within the system which consequently\nleads to increased cost saving. NBFCs are rigorously testing distributed ledger\ntechnologies on multiple grounds such as e-KYC, data exchange, cybersecurity,\nand loan disbursement. Application programming interfaces (also known as API)\nare also set up and experimented for a dynamic connected eco-system for\nmultiple stakeholders and institutions.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conventional_Operating_Model_and_its_Quandaries\"><\/span>Conventional Operating Model and its Quandaries&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>There are several obstacles linked with the conventional operating model which are as follows:-<\/strong><\/em><\/p>\n\n\n\n<ul><li>Unexpected delays in lead generation and processing time;<\/li><li>Increase operating expenditure;<\/li><li>Limited scope for credit appraisal and risk profiling;<\/li><li>Manual intervention is required to execute the workflow;&nbsp;<\/li><li>Rely on human judgment in decision-making;<\/li><li>Provide shorter credit for a longer tenure;&nbsp;&nbsp;<\/li><li>Stuffed with branches and people;&nbsp;<\/li><li>Runs on outdated IT infrastructure;<\/li><li>Absence of productive data.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_are_Growing_Technologies_setting_up_newer_Standards_for_NBFCs\"><\/span>How are Growing Technologies setting up newer Standards\nfor NBFCs?&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>The following explains the exposure of emerging technology available to NBFCs.<\/strong><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">FinTech Companies Facilitating the Latest Technologies<\/h3>\n\n\n\n<p>FinTech has been creating a lot of buzz around value chains in the <em><strong>financial sector<\/strong><\/em><sup><a href=\"https:\/\/economictimes.indiatimes.com\/topic\/financial-sector\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>. Due to its immense potential of disrupting the existing banking system, the FinTech footprints are extending in the areas of asset management, deposits, and lending. In the current scenario, the FinTech companies facilitating the latest technologies to dominant the obstacles and built services related to delivery, regulatory compliance, accounting automation, regulatory compliance, and fraud detection.&nbsp;<\/p>\n\n\n\n<p>Conventionally lenders have utilized a\nstandardized method, thereby analyzing customers from different backgrounds\nagainst a single credit policy which has led to the exclusion of creditworthy\ncustomers. The FinTech is now adopting a business model underpinned by AI and\nMachine learning. Of course, this would help them to create a system that can\neasily coordinate with required data sources so that lenders can make informed\ndecisions to tweak their services and workflow accordingly.&nbsp;<\/p>\n\n\n\n<p>The approach would allow the lender to\nincrease its existing market size and escalates the sales figure. The inclusion\nof AI in the existing model would empower the lenders to provide optimized\nservices to the right pool of customers and avert overhead costs.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">NBFCs Coordinating with FinTech for Automation<\/h3>\n\n\n\n<p>Some NBFCs are willing to experiment and\nimplement solutions in co-ordination with FinTech software to automate the\nworkflows that seek manual intervention. These entities also seek to deploy\nmiddleware software which would be responsible for processing inputs from the\ncustomers and produced well-structured data for further usages.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Technology to Boost Turnaround Time and Productivity<\/h3>\n\n\n\n<p>Technology boosted NBFC would strike the\nright balance between work efficiency and quality services. The incorporation\nof the latest tech in the system which increases cost-effectiveness and ensures\nprompt turnaround time as contrasted with the conventional lending models of\nthe bank.<\/p>\n\n\n\n<p>Instead of having resources for determining\nthe credibility and risk in lending, the latest tech like robotic automatic can\ntweak such resources for better outcomes.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Automating Manual Task<\/h3>\n\n\n\n<p>Prompt and subtle decision-making is yet\nanother key benefit of emerging technology. Technologically advanced NBFCs can\nautomate pain-staking manual tasks in no time so that they can focus on their\ncore competencies. Artificial Intelligence and machine learning can\nconsistently tweak risk models for the betterment of the services.&nbsp;&nbsp;Automation\nis certainly the most part of emerging technologies towards NBFCs. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Discard Inefficacy and Improve Collection Ability<\/h3>\n\n\n\n<p>A periodic assessment helps in detecting\nthe pain points within the system when tested in real scenarios. It can also\nrender optimize the solution for maximum efficiency. Advanced analytics and AI\nempowers NBFCs to gather payments and analyze decisions robustly.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Increased Database for Better Analysis <\/h3>\n\n\n\n<p>For years the majority of NBFC\u2019s take\nadvantage of customer account balance &amp; credit scores to prioritize\nsuspicious or non-performing accounts and outlines methods for its collection.\nWith such disparity at disposal, the lenders have to increase the data sets and\ncapabilities of data processing to extract and blend insight current and old\ndata sets of the suspicious account by focusing on big sets of\ninformation.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>NBFC has changed the dimension of the\nfinancial sector by incorporating strategies that support easy lending. People\nwho tend to approach the bank in the first place for credit is now favoring\nNBFCs due to ease of services. With so many individual rushing toward NBFCs to\navail credit, it becomes vital for them to automate the system from the ground\nup. <\/p>\n\n\n\n<p>The advent of AI and machine learning will certainly help NBFCs to take a huge leap toward digitization. Now, this would improve the overall efficacy of their system and maximize their profit in the longer run.&nbsp;Contact <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz<\/strong><\/a> team in order to get precise info on emerging technologies towards NBFCs. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/future-of-nbfcs-in-india\/\">Future of NBFCs in India \u2013 A Reality Check<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Non-Banking Financial Companies has attained unparalleled value in financial sector in recent times due to hassle-free lending. These entities are usually touted for delivering easy fiscal aid to individuals and businesses without imposing stringent stipulates, unlike a traditional bank. RBI is continuously striving to tighten the norms for NBFC to ensure better control. This leads [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":18887,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[91],"tags":[1173],"acf":{"service_id":"8"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":3723,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/18885"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=18885"}],"version-history":[{"count":12,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/18885\/revisions"}],"predecessor-version":[{"id":18916,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/18885\/revisions\/18916"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/18887"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=18885"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=18885"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=18885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}