Due to the cumulative effects of increased mobile and internet penetration in India, digital lending has seen a stratospheric surge.
Over the previous two decades, the financial services industry has changed dramatically, with COVID-19 recently hastening the business’s evolution. The capacity to communicate with customers online has now become a significant difference. This should assist in propelling the financial services industry into a new technological orbit.
In the previous 2-3 years, the payment system has been the most disrupted, and we believe that this disruption will continue for the better. Due to the cumulative effects of increased mobile and internet penetration in India, digital lending has seen a stratospheric surge. The industry has been working to provide secure, quick, and easy-to-use access infrastructure, as well as digitizing the loan application process.
NBFCs/HFCs and banks would work with start-ups and tech platforms that have a deeper understanding of their user base on a micro-level. This could lead to the creation of microlending start-ups, which will serve as venues for banks to reach out to their customers. On digital platforms, processing will be swift, allowing firms to get back on track quickly. It would also aid in the creation of a comprehensive client database as well as easy monitoring and tracking.
With the current low-interest-rate environment expected to last for the foreseeable future, demand for high-value loans, particularly in the housing sector, will remain strong. Changes in technology in terms of consumer information interchange is another area that will continue to evolve. E-KYC, video personal talks with consumers, online credit evaluation, and other projects are currently underway in this direction. In India, government actions and schemes such as PMAY have had a substantial impact on the home loan industry.
For the next few quarters, the capacity to have one-touch funding to facilitate this would dominate the loan business. The end of the epidemic would result in a large increase in consumer spending, particularly in the areas of travel and consumer experiences.
