NBFCs Leveraging Fintech to Build a Customer-Centric Business Model

Narendra Kumar

06 Sep, 2022

In the present scenario Fintech companies are efficiently making use of new technologies to build a Customer-centric business model and to detect fraud, minimize the compliance. Non-banking financial companies
(NBFCs) are the companies registered under the Companies Act 2013^[1] which lend and make investment and their activities are like that of banks. NBFC has principal business of receiving deposits under any scheme or arrangement in lump sum or in installment. Fintech startups, though operating under different revenue models, also act as the right supplements to the banking business, these services include loans like private education loans, home loans, personal loans, and retirement planning.

What is Fintech?

Fintech reflects financial technologies. Fintech represents a company that provides financial services to the consumer through new technology and software. Through new technology, Fintech products are designed to have a direct connect consumer’s finance with technology.

Earlier the technology of Fintech was used in the back-end systems of bank or other financial institutions. In 2019, to build a customer-centric business model, Fintech has provided a platform in crowd funding platforms which allows internet and application users to send or receive money from others on the platform and to pool funding from a variety of sources all in the same place.

GOFUNDME, PATREON ARE FEW COMPANIES PROVIDING CROWDFUNDING PLATFORMS OUTSIDE TRADITIONAL BANKING.

What is Customer Centric Business Model?

In the present era, where the customers are very much aware of the things, Customer centricity is not just about offering better services, but to give a great experience from the awareness stage.

The core business model strategy is to put your customer first, at the core of your business.

The characteristics that are important to build a customer-centric business model and digital native culture:

• Customer centric – Understanding the customer
• Innovative – Understanding the customers need and empowering the frontline
• Data driven – Feedback drives customer improvement.
• Collaborative.

In India, NBFCs are adopting latest technology innovations much faster than many banks and insurance companies.

Read our article:How are emerging technologies helping NBFC’s?

Lending Based On Customer Scorecards

Lending based on CSC establishes the need for business expansion and reflects customer‘s ability to service the loan-

Fintech to Build a Customer-Centric Business Model

NBFC has increased the fintech customer base considerably registering an annual growth rate of 20%. NBFC have quite successful in expanding their retail customer base and transformed the banking value chain by disbursing loan acquisition faster and easier. To build a customer-centric business model NBFCs must ensure that they not only build a new customer base but to retain them successfully.

In today’s business environment where competition is so high, keeping customer satisfaction Centre is very important. To meet the end-to-end customer need and requirement, NBFCs have highly trained staff to resolve the queries in a faster manner and this helps in retaining the customer base.

Stepping into the age of the internet, the Indian consumer today is well informed and has a clear idea of what they actually want, NBFC’s to have to take an upfront look at their offerings on products and assess if they are strong enough to hold the attention of the consumers of today.

For retaining their customer base, NBFC’s goes a long way base by having strong loyalty programs time to time Like the Banks, NBFCs have a very strong focus on managing relationships with their customers, end number benefits right from discounts, air miles, etc. Loyalty programs are a key tool in the finance sector and have been used as a tool to generate revenue in the company. Developing and implementing strong loyalty programs by using customer data, NBFC understands patterns and develop customized loyalty programs that suit their consumer.

Present Scenario

In the present competitive world, customer’s satisfaction is of paramount importance. Rendering high-quality end-to-end customer experiences help in mobilizing resources. NBFCs have highly trained staff to resolve queries and issues faster and in a professional manner. This also contributes to increasing customer satisfaction and increasing retention.

Technological advancement and their implementation can be the great enabler of business. Technology can be used to improve the application process and make it easier and faster; it provides the application review capabilities to allow –

The customers to see the status of their application,

• It provides multiple payment options,
• It enables the secured transaction,
• Promotes the provision of better interest rates.

With the help to new technology, NBFCs launch new products and services with increased business opportunities. New Technologies helps in identifying NBFCs loopholes through customer portfolios, Business opportunities and their improvement are the game-changing assets of the NBFC. It is implemented by enabling targeted profiling of customers which ultimately help in increasing customer engagement with NBFCs. Establishing themselves as India’s financial landscape NBFC helps in meeting the financial needs of various sectors and individuals. NBFC’s must focus on their core strengths in order to remain relevant and to keep their existing customer base.

Conclusion

Read our article:RBI Merges Three Categories of NBFCs Into NBFC – Investment and Credit Company (NBFC-ICC) to Ease Operational Flexibility