Gurugram and Bengaluru-based FinTech FinBox has partnered with Capital Now, a Hyderabad-based digital lender, to improve customer onboarding, in addition to supercharging bank statement analysis for risk assessment.
The partnership has enabled Capital Now to onboard its customers within seconds, reducing the overall turnaround time for digital loan disbursement by 25 per cent over their incumbent solution.
Risk assessment remains crucial to loan disbursement, primarily as the Reserve Bank of India (RBI) addresses unsecured personal loan surges. In response, the RBI has directed banks and NBFCs to bolster their capital reserves for risk weights.
These regulations are set to take immediate effect, urging mandatory compliance before the end of February this year.
The regulations will inevitably drive a more stringent focus on underwriting practices and proactive risk-based monitoring. However, the traditional process poses a significant challenge due to its time-consuming nature, rendering platforms susceptible to notable drop-offs.
The rise of unified payment transactions (UPI) for petty transactions has further complicated the analysis of the more extensive database. FinBox's bank statement analyser, BankConnect, analyses more accurately and speedily. This deeper insight into bank statements significantly strengthens the evaluation process for unsecured loans, mitigating risks and fostering more secure lending practices within the financial ecosystem.
“It has always been our priority at FinBox to ensure our products help our clients create real, tangible impact. BankConnect has been able to deliver desired results for Capital Now, but what makes this win sweeter for us is the sheer speed at which it has kept up with their burgeoning customer base,” said Rajat Deshpande, CEO of FinBox.
Fintech lending saw a 21 per cent increase year-on-year in FY23 and is only projected to grow further. Naturally, the spate in non-payment of loans in the unsecured digital lending segment has alarmed key stakeholders in the sector. However, partnerships between digital lenders and reliable technical service providers can help check NPAs while extending access to financial services to large portions of the population with responsible and scalable underwriting.
The software has been designed to collect, extract and analyse data to minimise customer onboarding time, thereby improving their experience on the host app. FinBox’s APIs fetch bank statements fast, and it processes bank statement data simultaneously as the user completes onboarding. Capital Now uses these insights to enrich its own risk assessment measures. The speed of such analysis in the backdrop ensures that the customer is instantly presented with their loan eligibility status.
FinBox supports a comprehensive list of banks and statement formats, thus allowing the digital lender to analyse statements shared by any customer. As a result of FinBox’s quick TAT and extensive network of banks, Capital Now has also improved the success rate of its platform by 30 per cent.
“In the fast-paced world of retail digital lending, Capital Now efficiently handles a multitude of loan applications, spanning various credit products. Our commitment is to streamline this process, ensuring each application receives the attention and precision it deserves, which is why we need extremely reliable tech integration. BankConnect has been nothing short of a secret weapon for us – it has empowered us to carry out a near-precise risk assessment at astounding speed,” said Dhaval Shah, product manager at Capital Now.