Introduction
The introduction of Artificial Intelligence ("AI") and robotic process automation is providing spectacular customer service to borrowers. Research conducted by Accenture on the impact of AI on profitability found that AI has the potential to boost profitability by an average of 38 percent by 2035, across 16 industries. Fintech companies are well-equipped to provide this infrastructure.
NBFCs, meanwhile, are at the forefront of financing in the para-banking sector. With each passing year, they are penetrating deeper into Indian society in order to extend their financial services. During the 8th Associated Chambers of Commerce and Industry of India National E-Summit on the NBFC sector, held in 2021, Ketan Doshi, Managing Director of PayPoint India, said: "NBFCs are going to be the forefront of the credit outreach which is required in the country, and this can happen with the partnership model with Fintech. It can bring a credit revolution in the country."
Contribution of Fintech in the Collaboration
- Chatbots and 24x7 assistance;
- Automated systems for e-KYC, undertaking the repetitive and mundane task of customer acquisition; and
- This results in channelising the workforce into strategising and taking up human-interaction based services.
Contribution of NBFCs in the Collaboration
- NBFCs have surmounted key defects of the traditional banking system;
- They provide speedy and flexible lending solutions to people and companies;
- Borrowers can avail services irrespective of their credit scores; and
- Relatively lenient regulatory compliances also work in their favour.
Fintech companies provide technological infrastructure to brick-and-mortar NBFCs, facilitating customer acquisition, risk management, analysis of the lending process and other logistical functions. For example, fintech companies and NBFCs are coming up with co-lending and peer-to-peer lending services.
Conclusion
NBFCs majorly tap into the market that the traditional banking system tends to marginalise. In such a scenario, collaboration with tech-based companies can accelerate reach and generate large sources of revenue. Additionally, with the effects of the pandemic phasing out, demand for credit is at its peak. This collaboration between NBFCs and fintech companies can prove to be valuable to the economy.
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