Rashi Gupta is the co-founder and Chief Data Scientist at Rezo.ai, India’s fastest evolving AI-powered contact center. With a keen eye for detail, Rashi is a seasoned data science professional with over 15 years of academic and corporate experience. With a double master’s in Mathematics and Computer Applications from IIT Delhi, Rashi had been an exemplary student in academics since the beginning. She graduated in Mathematics Hons from Delhi University and also holds her Ph.D. in Data Analytics (mathematical modeling on genetics data) from the University of Helsinki, Finland. Prior to stepping into the corporate world, Rashi assumed the role of Assistant Professor at JNU for 4 years. Giving birth to a futuristic business like Rezo.ai and further scaling it up effectively has been an exciting roller coaster ride for her.
After nearly two years of disruption, economic activities in the country have picked pace. The pent-up consumer and industrial demand indicates that we can expect a sharp growth in consumers’ and businesses’ borrowing from non-banking financial companies (NBFCs). As per a Feb 2022 report by India Ratings and Research, NBFCs would maintain loan growth of 14% year-on-year in FY 23 compared to 7–8% growth in FY 22. Sufficient capital buffers, stable margins and sizeable on-balance sheet provisioning, and adequate system liquidity will help NBFCs make the most of this situation.
Beyond delinquency management and new business
Typically, after lending to customers or businesses, NBFCs pursue a straightforward approach, i.e., keeping a tab on repayments and managing delinquencies. Thankfully, AI-powered contact centers make delinquency management very efficient and effective. NBFCs can collaborate with a technology partner to automate the pre-and post-delinquency management cycles. The solution enables lenders to send reminder text messages and emails to borrowers at the pre-delinquency stage. The contact center can also make automated calls to borrowers to remind them about their EMI dates in remote parts of the country with low digital and financial literacy. These calls can be customized in different languages and dialects to convey the right message. The conversational AI capability allows the borrower to respond like a regular phone call. The automated speech recognition enables the system to assimilate the audio data, convert the speech to highly accurate text, and conduct sentiment, empathy and tone analysis. This analysis helps in predicting the intent to pay. In case of any red flags, NBFCs can take additional measures.
NBFCs rely on marketing and sales teams to bring new customers onboard for business growth. This is a costly and time-consuming cycle. However, NBFCs must undertake this to build the future business pipeline.
In an attempt to focus on critical business areas, i.e., delinquency management and new business generation, an often-overlooked area by NBFCs is retention and activation of existing clients. Existing clients who have had a good experience with the lender are more likely to return to it for future needs. According to a global study by Accenture, 34% of customers who switch their banks (we can read this number as a proxy for NBFCs) cite due to better customer service available elsewhere. Therefore, by revamping customer service through an automated contact center, NBFCs can reduce the hopping lenders’ customers.
Apart from reactivating the old clients, there is also an opportunity to cross-sell more financial products or solutions to an active lot of clients. According to a study by Bain & Company, a 5% increase in retention by NBFCs can lead to a rise in profit between 25% to 95%. Hence, the inactive current clientele is a goldmine waiting to be mined.
AI-driven analytics helps NBFCs better understand their inactive clientele and make a personalized pitch (for new products, reviving an old relationship, etc.). The system draws historical data and context to create the correct pitch. Post this, the automated contact center deploys outbound voice and non-voice conversations to deliver the pitch to the clients. In some cases, this revived conversation can help NBFCs generate up to 30% higher revenue from their erstwhile inactive client database.
AI and automation have already been redefining the customer experience for financial institutions. It is a multi-billion rupee worth of opportunities to engage and reactivate their existing client set and boost their bottom lines (when NBFCs borrowing cost is expected to rise). The first step is to identify a technology partner that can provide an end-to-end contact center analytics and automation solution.