NBFC

Automation and Value-Added Services for NBFCs

Non-Banking Financial Companies started operating in large part through automated and value-added services. Customer experiences are improved as a result of automation’s ability to boost efficiency, minimize human error, and streamline numerous procedures. On the other hand, value-added services allow NBFCs to stand out from rivals and draw in more business by providing their clients with extra benefits and distinctive features.

NBFCs may provide quicker, more personalized services and maintain competitiveness in the changing financial landscape by combining automation with value-added services. Let us discuss the automation and value-added services for NBFCs in detail.

What is Automation?

Automation is the application of technology to jobs that need little or no human involvement. This comprises commercial applications like business process automation (BPA), IT automation, network automation, automating system integration, robotics in industry, and consumer applications like home automation, among others.

Automation is the development and use of technology to manufacture and provide goods and services with little or no human involvement. Many tasks that were formerly carried out by people are now more productive, dependable, and quick because of the use of automation technologies, techniques, and processes. Manufacturing, transportation, utilities, defence, facilities, operations, and, most recently, information technology are just a few of the sectors that use automation.

How does it help in NBFC Development?

Automation-based process optimization initiatives are also assisting NBFCs in improving their relationships with their clients. Automation is assisting NBFCs in reducing their target market and enabling wise resource allocation for niche markets and customized goods and services in the face of stiffer rules that have raised the cost of borrowing. The objective is to adapt to shifting market environments and maintain competitiveness.

New-age NBFCs are using innovative technologies more than ever to utilize partnership ecosystems across the value chain of lead generation, client onboarding, underwriting, credit/loan disbursement, and collection. Operational agility is being provided via process automation at a rate never previously witnessed. Artificial intelligence (AI), machine learning (ML), and big data are tools that lenders can use to evaluate specific consumer insights and develop alternative credit rating models.

The following are some of the new tasks that automation is assuming in NBFCs:

• To maintain a competitive edge, NBFCs have always placed a high priority on personalizing the customer experience. Automation is assisting them in going above their commitment by disproving the ‘one size fits all’ theory of client evaluation and a single credit policy. To provide current and potential clients with a curated experience, technology is enabling a personalized approach to credit evaluation. Inadvertently, this is assisting NBFCs in diversifying their customer base through smart market segmentation.
• Another essential component for NBFCs to endure disruption is data monetization. When submitted to analytics tools, collected data can reveal insights into consumption habits. This, when translated into smart technology, functions as an assistant to human supervisors for speedier and more accurate decision-making as well as quicker system implementation to increase NBFC profit output.
• As worries about the frequency and sophistication of cyberattacks grow, NBFCs have always faced difficulties with cyber security and identity protection. Smart technology, on the other hand, is allaying these worries and boosting customers’ trust and confidence in adopting automated processes rather than human ones.
• In India, Aadhaar-based KYC is bringing digitization to the masses by supporting digital footprints with biometrics. Numerous NBFC firms now have a solid basis due to Indian Prime Minister Narendra Modi’s recent push to promote programmes like the Jan Dhan Yojana¹, Aadhaar, and the advent of UPI. As a result, they can now cater to potential demands across the nation. This turned out to be incredibly helpful for keeping things running during the epidemic despite movement constraints, a reduction in staff, and disrupted value chains.

Value-Added Service

Value-added services are additional features that a company provides in addition to its basic goods or services. While a business promotes and sells a certain good or service, it can improve its offers in a number of ways to give customers more for their money. By making the original product better, a company can increase revenues and expand its operations by attracting additional customers. An organization can identify consumer needs and offer them a useful solution to produce a value-added service.

Value-added services are frequently provided without cost to the customer. Making consumers feel welcome and satisfied at a business can be accomplished by offering complementary goods and assistance. Here are a few general illustrations of resources that add value both during and after purchase:

• Free samples
• free refreshments
• Luxurious waiting areas
• Free samples of products
• Discounts for membership
• Carry-out services
• Free delivery
• Thank-you notes

 What advantages do value-added services offer?

Typically, a business’s main objectives are to make money and carry out a certain mission. It can achieve those objectives by offering value-added services. Businesses can benefit in a number of ways by offering these features, including:

Bringing in clients: Customers frequently prefer to do business with companies that offer high-quality, considerate services and goods. You may engage audiences, draw in new clients, and boost revenue for the company by adding value to your products.

Getting noticed among the competition: Customers in most markets have an absurdly large number of options when looking for goods and services. Making your services and customer experience stand out from the competition can be done by incorporating special features.

Customer Loyalty: Increasing the likelihood that customers will remain loyal to a brand over time can be achieved by consistently delivering value to them. When attempting to raise client retention rates, membership discounts and loyalty programmes can be extremely beneficial. Customers frequently look for companies that can offer value-added services. This is true because customers can benefit greatly from these resources. 

Receiving complimentary services: As part of a value-added service programme, businesses frequently provide complimentary goods or services. Customers can therefore receive additional goods when they make a regular purchase.

Getting a strong return on your investment: It is important because when clients spend money, they often hope to see a positive and long-lasting result. They can get more value than they paid for by investing in a value-added service.

Developing a relationship with a provider: Customers can get to know a business provider and forge a lasting relationship by taking part in value-added service and loyalty programmes. It’s advantageous to have a company or brand that you can trust.

Importance of Using Automated and Value-Added Service

The benefits of using automation and value-added services are:-

The Best Possible Customer Experience: In the banking and non-banking sector, customer service is where automation is most prominently used. The majority of you would have firsthand knowledge of this. Many businesses have chatbots on their websites; when you visit the website, the chatbot appears and, based on the answers you give to pre-programmed questions, it can offer you a solution or point you in the proper direction.

The banks and NBFCs can handle account opening and loan disbursement in less time due to the implementation of automation and value-added service. Improved processing speeds significantly increase overall client satisfaction.

Personalized Solutions: Customers who use artificial intelligence-based solutions receive solutions that are specifically tailored to their needs. For instance, depending on your needs and credit score, you may be eligible for a financial plan or loan. Banks utilize AI systems to analyze consumer data to get insights, provide loans with cheaper or higher interest rates, and cross-sell items based on the user profile.

Increased effectiveness: Financial organizations can greatly increase their efficiency with the aid of technology. NBFCs benefit from their personnel and procedures being more productive as the processes become faster. Customers stand to win as well when service providers’ efficiency increases with a quicker turnaround time.

Saving money: By lowering the need for human resources, improving productivity, lowering errors, and reducing defaults, automation and value-added service implementation in the banking sector can help businesses save money and boost their profitability. As service fees decrease over time, consumers also benefit from lower prices.

Automated Debt Recovery: Lenders can automate their debt collection with the aid of automated debt recovery AI systems. The lender can send automatic reminders, which save time and money and help to some extent, reduce bad debts if they have access to a detailed overview of the client’s borrowing history. Receiving notifications of past-due payments benefits customers as well. With prompt reminders, they are less likely to forget their EMIs and avoid paying late fees that could result from missed payments.

Quick Loan Access: Customers of NBFCs with value-added services get quick loans whenever they are in need. This ensures the relationship between the customer and the NBFC. This makes them the ready-to-go service provider for customers.

Financial Planning Tool: Giving clients access to tools and resources for planning their spending, saving, and investments will help them make more educated choices.

Access to Exclusive Offers: Offering alliances with other companies to give customers access to exclusive discounts or advantages might enhance the value of the NBFC’s services.

Conclusion

Automation is reviving the NBFC industry with quicker decision-making turnaround times, process amplification, and focused outreach. As a result, processes are becoming more efficient, standardized more quickly, and streamlined to offer everyone impartial services. Customers with no credit history were allowed to borrow due to this, and they also had the opportunity to establish good credit by making on-time payments. The firm and the client both gain from the increased usage of contemporary technologies. NBFCs may effectively integrate automation with value-added services to streamline operations, improve customer satisfaction, and maintain competitiveness in the financial sector.

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NBFC Related Links

1. https://pmjdy.gov.in/hi-home