Praveen Paulose, MD & CEO, Celusion Technologies

Born in 1978 in Mumbai, Praveen completed his schooling from St. Mary’s High School, Mt. Abu(Boarding School in Rajasthan).He completed his Bachelor of Engineering in Computer Science from D.Y. Patil College of Engineering, Mumbai. After a brief period of employment, he became a first generation entrepreneur when he started Celusion Technologies.The idea was based on the premise that they could build great software but today their software is changing the way people look at finance.

 

In India, more than 70% of the population live in underserved areas with only 10% having access to organised credit. and a pent up demand of $600 billion needs to be met.The medium and small enterprises which contribute around 38% to India’s Gross Domestic Product remain starved for credit. The situation created by the pandemic did not help things either. A ready solution had to be found and the answer was lying with digital solutions. The smartphone data revolution had ensured that over 600 million Indians had access to the internet. This made it easy for fintech to set up digital lending platforms to reach out to the remote areas and make credit accessible at the click of a button. The COVID pandemic hastened the digital transformation process in most businesses with the financial sector taking the lead. 

The Digital Lending platform covers the entire loan lifecycle from the start point of the application to the logical endpoint of disbursement in the customer’s account in a seamless fashion. The traditional lender has been replaced by an intelligent digital platform that manages every process in the loan origination cycle without any credit risk or compromise to data integrity.

The Digital Lending platform optimises the time taken to complete the cycle. From a matter of several days, the entire process is reduced to minutes due to the efficiency of the platform. The first step involves the submission of an online application followed by the upload of the relevant documents. The inbuilt Decision Rule Engine evaluates the application in seconds. It matches the loan file parameters with product policies to offer the right product to the customer. The platform has EMI and Eligibility calculators that can be used by the sales team to assess the application.

The Digital Lending Platform software retrieves credit scores from bureaus, authenticates PAN / GST / Aadhaar with regulators, analyses bank statements, and verifies bank accounts through online API. This leg of checking which used to take days in the manual checking process is now completed in a matter of seconds.

Employment/business details are checked in the background including fraud analytics using AI-based technologies. The credit history reveals past defaults and helps to reduce the lender risk. Once the loan is approved digitally, the contract is generated which can be signed online. The bank details which have already been verified using penny drop is used for the disbursement of the loan amount. The entire process cycle enjoys the benefit of significant time and cost saving.

What are the benefits of a Digital Lending Platform?

A digital lending platform harnesses the power of new-age technology to yield far-reaching benefits to both the consumers and the lenders.

Customers stand to benefit from –

  • Easy processing – The traditional loan process can be quite cumbersome and puts off many borrowers. The Digital Lending Platform makes it very easy by limiting the activity to filling in the name and uploading the identification documents.
  • No paperwork – The usual loan application involves a lot of documentation whereas a digital lending application seeks only the basic information and can pull the rest from the database.
  • Quick approval and disbursement – The digital lending process is quick compared to the manual process. A matter of several days has been reduced to minutes which delights the customer.
  • Easy access to credit – Several areas of the country that were previously underserved now have access to online credit.
  • Real-time status updates – The earlier process involved several trips to the lender for status updates all of which is available in real-time on the smartphone in the Digital lending process.
  • Comfort and convenience – Being able to conclude a loan process without leaving the home is indeed a great comfort to customers and a departure from the usual.

Lenders benefit from-

  • Wider access to credit-starved customers – With the Digital Lending Platform lenders are able to serve a wider customer base.
  • Efficient and error-free processing – Since the applications are filled using smart forms, the process is efficient and error-free which saves time and costs.
  • Quick conversion of leads to sales – Since the process is very simple, customer onboarding is much faster.
  • Lower customer acquisition costs – Optimising the entire loan lifecycle on one platform leads to a lower cost of acquisition as most of the human intervention is eliminated.
  • Lower risk due to use of AI for risk evaluation – Using AI-driven algorithms to assess applications reduces the risks of errors due to human judgement.

In these times when physical movement is limited due to the pandemic, a digital lending process eliminates the need for travel. A simple upload of the identification document and selection of the product required allows the platform to smart fill the application using OCR technology. This minimizes the chance for human errors and speeds up the process as well. The Digital Lending Platform keeps the customer informed by providing real-time updates. 

The Digital Lending Platform has found wings after the onset of the pandemic as increasing numbers of borrowers switched to online options. They found it easy and convenient to have their loan processed in minutes from the comfort of their home. 

It is a given that Artificial Intelligence and Machine Learning will actively participate in the coming years as digital lending picks up pace. Banks and Fintech lenders are using the smartest algorithms to assess creditworthiness. Their decision rule engines  use alternative data sources to assess credit behaviour and evaluate risk profiles eliminating the risk of frauds. This is bound to reduce the NPA in the lenders’ books.

In the future, account aggregators will have an important role to play in digital lending. Account aggregation is a common platform for capturing all financial details in one place. The account aggregator will help individuals and small businesses to share their financial information with third parties in a safe and secure manner and have more control over the use of their data. To promote this account aggregator ecosystem a body named Sahamati has been formed to build awareness about the new technology and support the implementation and integration, This is expected to spur digital lending.

In the times to come, customers will expect to be served in seconds at a time and place of their choice. The digital lending platform is a precursor of the way the lending industry is shaping up. It will eliminate geographical barriers and lenders will be able to penetrate into the most underserved areas of the country. It will widen the customer base and provide the small, medium and micro businesses with access to easy credit.

Digital Lending platforms have irreversibly changed the way lenders do business and the way customers approach financing products. Lenders have the flexibility to offer a fully- digital lending process using the benefits of AI technology. A great lending platform should be able to offer a simple online application submission, fast approvals using the decision rule engine, compliant lending processes and the flexibility to continually enhance process efficiencies. Digital Lending Platforms will continue to increase their penetration as India embarks on its mission of financial inclusion.

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