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CXOToday took an exclusive interview with Mr. Yashoraj Tyagi, CTO & CBO, CASHe.
- Please shed some light on the factors fueling the growth of the Indian digital lending market in the last two years.
The FinTech ecosystem has gained immense popularity in recent years, especially since the outbreak of the pandemic. The BFSI sector in particular has risen with digital credit services transforming the borrowing process and disbursement methods. There are many factors that have caused the growth of digital lending in India. Some of them are mentioned below.
An easier process: The The digital infrastructure built by fintech lending companies has made it possible for them to make the lending process much easier. Almost everyone these days prefers to work online rather than in person.
Introduction of e-KYC: The introduction of e-KYC was an important factor in the rise of digital lending. e-KYC checks help lenders verify the customer’s Aadhaar credentials and their identity, among other details. It certainly helps financial institutions speed up the loan application process, thereby making lending and borrowing a better experience.
government initiates: Various government initiatives have also fueled the growth of digital lending in India. Over the last few years, significant funds have been allocated for Digital India initiatives. Initiatives such as having a Fintech ecosystem were part of this plan, which played a vital role in transforming India into a digital economy. Further support from the government can ensure that digital lending gains more traction.
User friendly interface: Digital lenders pay particular attention to the user interface of their online digital lending platform. This platform can be in the form of a mobile application, a website or both. It is important that the interface is user-friendly, otherwise the borrower may not find the platform attractive and lose interest in working with it. New age lenders, especially fintech companies, have the ability to make interfaces extremely attractive and super easy to use.
2. How has the advent of technology helped the lending space?
Lending firms have adopted state-of-the-art technology that has helped borrowers get almost instant loan approval and money in their bank accounts. Digital lenders today are taking advantage of AI and ML to avoid time-consuming activities and foster customer relationships. AI-based chatbots, for example, handle a significant amount of customer interactions that were previously handled by humans. AI predictive analytics also helps digital lenders optimize the lending process, allowing lenders to focus on customer engagement and retention. In addition, new age technology drives efficiency by empowering digital lenders with early fraud detection.
Data Science: Data Science also plays an important role in improving the digital lending service by making it more user-centric and secure with robust verification and monitoring, thus making it convenient for both the borrower and the lender.
Robotic Process Automation (RPA) helps digital lending firms quickly process loan initiation, document verification and handle any exceptions, if any. Faster processing leads to an improved customer experience (CX).
Various other technology-enabled services help automate loan processes, making them more secure and efficient. For example, video KYC facilitates a paperless, low-cost solution for remote customer onboarding – essential for a future where more and more customers will prefer contactless services. e-Sign can further help lenders obtain customer signatures on key documents in a completely contactless manner through digital platforms/apps.
3. For the first time, CASHe in association with IRCTC has announced the option of travel now and pay later for train commuters. What was the traction in space?
Ever since we launched the TNPL payment method on the IRCTC Rail Connect app in October 2022, we have been getting a positive response from users as it makes it an accessible and affordable option for Indian Railways passengers. This is India’s largest pay later built-in EMI payment with IRCTC of its kind. We are already witnessing a 25-27% jump in registrations on a monthly basis. So this is a healthy sign and we expect this to continue to rise in the coming months. The flexibility of the TNPL option on the IRCTC Rail Connect app helps users act on their deferred travel desire as people can repay the money in three to six equal interest-free installments. We are optimistic that this emerging trend in travel loans will encourage people to go out and fulfill their travel bucket lists, while giving the industry a significant boost.
4. CASHe is transforming from digital lending to the wealthtech space – what is the range of products and services that CASHe offers to its customers?
The acquisition of Sqrrl is an important milestone for CASHe’s vision 3.0 roadmap as it ushers in the next phase of our growth through our foray into the WealthTech space. By integrating CASHe’s millennial-focused credit services with Sqrrl’s first digital wealth management and investment offerings, we aim to seamlessly fulfill the diverse credit and investment needs of the new-age Indian by offering access to multiple products and next-generation solutions for financial health. Sqrrl measures people’s personalized investment needs and matches them with the funds available in the industry. It is like a personal financial friend that one can rely on to save and grow their money. It is a platform with an MVP for savings and investment products powered by mutual funds. It offers SIP, Lump Sum, Goal Based Investing and Rounding and ELSS Funds, Fixed Deposits, Digital Gold where it offers users to buy Digital Gold for just Re 1 and Shares (Direct Equity and F&O)
5. With this transformation, what kind of technology is used by CASHe, please help with some of the implementations in the company’s ecosystem
Sqrrl adopts a consultative method of gathering information about the client’s needs and circumstances, then creates a personalized plan that includes a variety of financial products and services. We use advanced analytics to use personal data and provide a more personalized service to our users. Advanced analytics enabled by AI and ML transforms this data into insights for our customers. It also helps integrate new and unique data sources to help our users make optimal investment decisions
6. How is CASHe expanding into the wealth management business?
Over 25 million additional CASHe users now have access to a digitally enabled, mobile-first, byte-sized investment platform that will help them start their investment journey with just ₹100. We have already gathered good traction from existing customers on our platform to explore investment opportunities to increase their investments through the various investment options provided to them through Sqrrl.
7. How can loan defaults and debt traps be prevented, what is your opinion?
Getting out of the debt trap is often difficult, especially when you have defaulted on a loan. A loan default occurs when the borrower is unable to repay the EMI amount with interest to the financial institution as per the loan agreement. Commercial loans are considered delinquent if the borrower has made zero interest or principal payments within 90 days or is 90 days past due. One of the best ways to get out of the debt trap would be for the borrower to look for a new, low-cost personal loan and pay off their current outstanding debts. Through debt consolidation, the borrower combines multiple debts into one debt. This allows them to choose a favorable repayment term with a lower interest rate and EMI. It’s also important to create a budget and stick to it. The offender must avoid unnecessary expenses, whether large or small, until he/she is in a financially comfortable position. This also includes reducing the use of credit cards. Use credit cards wisely because you could end up with high interest rates and penalties if you don’t pay them on time
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