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Radian Finserv, a leading Non-Banking Financial Company (NBFC) in India, is at the forefront of leveraging technology to transform the financial landscape.
Under the leadership of its Founder, Sumit Sharma, is leveraging digital innovations to streamline operations, enhance customer experiences, and cater to the financial needs of underserved communities.
In this insightful conversation, Sumit Sharma discusses how technology has reshaped the core functions of NBFCs, the role of digital platforms in improving efficiency, and the ways Radian Finserv is making financial services more accessible to MSMEs, SMEs, and rural populations in India. From AI-driven credit assessments to expanding gold loan services, Radian Finserv is at the forefront of providing innovative financial solutions to Real Bharat.
Radian Finserv's Founder Discusses the Future of NBFCs in India
How has technology transformed the core operations of NBFCs, and what specific areas have seen the most significant impact?
Technology has played a pivotal and positive roles across most industries. NBFCs typically lend money to customers, and with a physically distributed set of customers, have gained significantly in efficiency with the adoption of technology.
Apart from easier access to data and information, technology has played a significant part across the entire customer life cycle. For instance, customer connect is better served through web sites and apps, customer onboarding benefits from technology and digitisation, reducing the time for such activities, central availability of information helps faster credit assessments, and during the loan tenure, customers have easier access to information and payment gateways allow for smoother transactions.
Operationally too, NBFCs gain significantly with the adoption of technology and data analytics, making it easier for them to focus on customer needs.
Can you elaborate on the role of digital platforms in streamlining loan processing, customer onboarding, and compliance procedures at Radian Finserv?
Radian works on a physical first model, as this allows us to connect better with customers, especially as our processes involve an initial meeting with the customer (to assess creditworthiness for MSME loans, and to assess and take possession of gold ornaments in case of gold loans).
That said, all our operations are digitised, and Radian loan managers use our in-house app to record and process the customer journey. Starting with the customer onboarding, loan disbursals, servicing and loan closure, all aspects are done through the Radian app. We have seen that the customers are agnostic to the use of a customer app, and prioritise the service and personal interaction.
How are you leveraging data analytics and artificial intelligence to assess creditworthiness and personalize financial products for your customers?
We are early in the journey (2 years of operations since we received the NBFC license) and we have utilised this time to establish the platform with physical presence and building core operations. Data analytics helps us to see the trends and identify specific use cases where customers may need our assistance.
For instance, the credit assessment for MSME loans involves a thorough review, and we can predict the needs for specific financial products for customers. For gold loans, we are working on a deep tech module that would allow for remote assessment and identification. Creditworthiness assessment has benefitted significantly by the use of AI that predicts specific patterns for customers, thus helping in making informed credit decisions.
What innovative approaches has Radian Finserv adopted to reach the unbanked and underbanked populations in rural and semi-urban areas of India?
Our founding team has worked in microfinance and distributed businesses, and understands the value of financial inclusion and fulfilling the needs of underserved customers. Radian has a stated intent of growing beyond the metro cities, and has set up the bulk of it’s presence in tier 2 and tier 3 cities, with the intent to continue expansion into the hinterland of India.
Our endeavour is to help MSME customers with loans for income generation (as against loans for consumption), in line with the principles followed in microfinance.
In gold loans, most NBFCs and banks work with a minimum amount of gold that can be taken for a loan. We have recently launched a loan for smaller amounts of gold, where we provide small ticket loans to customers against a specific need. Similarly, we are in the process of setting up agri based loans for farmers in smaller cities and villages.
Can you discuss the role of mobile banking and e-wallets in facilitating transactions and access to financial services in remote areas?
UPI has seen significant proliferation across different parts of India. We see that this helps customers stay up to date with their payments, without visiting our branches, and without us having to deploy resources for such collections. Mobile banking is yet to penetrate the underserved customers in a meaningful way, but the payment gateways are making transactions easier and seamless.
How has technology enabled Radian Finserv to overcome challenges in providing financial services to underserved communities?
As mentioned above, the digital customer onboarding makes it easier for Radian to process customer requirements faster, and payment gateways make it easier for customers to process their payments. At the fundamental level, contacting customers and updating information has become easier with the advent of technology and apps.
How is technology empowering MSMEs and SMEs in India by providing them with access to capital and growth opportunities?
There are numerous examples of borrowers taking loans at usurious rates of interest from unregulated lenders. At the outset, the onset of NBFCs, and their expansion into the hinterland, allows customers realistic options to borrow from regulated lenders, and significantly lower rates of interests when compared to the unregulated market. Technology plays a pivotal role in reaching customers, and the credit assessment, in addition to faster and efficient processes.
Credit rating agencies use advanced data analytics and technology to provide a central repository of information, that assists both lenders and borrowers, and as the rating agencies start to cover a wider population, this will help more MSMEs and SMEs.
Similarly, technology platforms allow customers to evaluate and reach out to credible lenders that help address their financial needs.
What specific measures has Radian Finserv taken to enhance customer experience through digital channels, making financial services more accessible and user-friendly?
As mentioned earlier, Radian works on a physital approach, where technology is used at the back of a physical distribution, rather than instead of a physical presence. We provide customers a digital onboarding through the use of Radian app.
In any case, our customer journey is entirely digital, adding to the efficiency of process. After the loan sanction, customers receive information on their loans, and options for further processing, through the Radian app.
Can you share some success stories of how Radian Finserv's technology-driven initiatives have positively impacted the lives of people in Real Bharat?
We had a gold loan customer, who approached us for a further loan for his shop. We were able to process the MSME loan fast, as we already had information on him. He has subsequently expanded his operations in the shop, and is in the process of taking on additional space for his sweets shop.