What are the major trends or opportunities you see arising post-COVID? How do you foresee the business landscape changing?
The present Coronavirus pandemic has clearly disrupted the world of banking. It is quite evident from the growing number of loan payment deferrals and in pay checks being stopped globally. The nature of this crisis is quite unique but we believe that there are abundant opportunities that can be harnessed post this period of slowdown.
Most financial organizations haven’t made any modifications to their basic lending structure for decades. Right from loan application to processing, and release of funds, the entire process still remains time-consuming and cumbersome for both the lending institution and the borrower.
Even if there is an opportunity to fill and submit the application form online, the rest of the journey the borrower takes until he/she receives the funds in their accounts remains the same that it was decades ago.
This is where the need for technology-oriented solutions step in. It’s pretty simple. Consumers in this digital era are craving for loan procurement to be as seamless an experience as online shopping is. Andromeda has historically strived to do exactly that and continues to do so successfully.
Clearly, there is an increased demand for digital lending platforms more than anything else. To meet the requirements of the current borrowers and to better serve the future borrowers, credit unions and banks need to do away with archaic methods and simplify the entire procedure of availing loans. They need to provide more options to the customers if they want to survive in this digital era where there is no dearth of innovative options.
COVID-19 has educated the masses as to how technology can simplify things, from purchasing essentials to everything else right from the convenience of their homes. A user-friendly interface, quick decision-making ability, and use of customer analytics make the entire process lucrative for a customer.
Andromeda has excelled at this thanks to our innovative staff adapting rapidly to the changing market requirement. To remain profitable in the lending market requires more than just mapping data points and working on performance metrics. The Andromeda team’s priority also involves lowering the loan cycle time and constantly improve approval rates to quicken the loan disbursal times for our consumers.
What can Financial Institutions do fundamentally?
The financial services industry is on the cusp of an unprecedented wave of credit decisions, both around new potential borrowers who will need funds to survive the crisis and around existing borrowers deferring payments. It will be essential to identify customers potentially in need of support and those without much of a financial burden.
Financial firms need to understand that the present crisis isn’t because of consumers. They have no choice but to continue serving consumers with small ticket loans, bridge financing, offer loan payment extensions and more. This will go a long way in building loyalty while limiting the credit risk for the institution.
Deploying advanced technologies is also the need of the hour. This will significantly cut down the cost of risk and loan processing and will help identify small businesses and consumers with the lowest risk/return profile. We at Andromeda haven’t shied away from investing in technology infrastructure towards this objective.
Even before the pandemic, the financial sector witnessed a new wave of FinTech internet giants. The dramatic change in consumer behaviour during the pandemic has only ushered the entry of new small-time lenders triggering competition. It’s high time that traditional banking institutions in India realize the potential and make the best out of the situation.
The world is indeed experiencing a phase of crisis but it is equally true that it has exposed us to an abundance of opportunities. This is the time for the lending industry in India to scale, benefit, and provide convenience to consumers who have long been waiting to reap the benefits of rapid technological advances.
