Digital lending has seen phenomenal growth, securing fintech-led credit services: CEO, Digitap

The BFSI segment is currently primarily focused on desktop data to underwrite customers. However, nearly 400 million Indians do not have adequate access to credit due to low bureau scores. To learn more about market-leading AI-ML based alternative data solutions, Rashi Aditi Ghosh of Elets News Network (ENN), had a conversation with Nageem Kommu, CEO, Digitap.

What is the goal solved by Digitap?

Digitap is an early-stage technology startup dedicated to developing digital artificial intelligence (AI), machine learning (ML) and compliance solutions for organizations in the BFSI sector. We help BFSI companies use AI/ML-powered Big Data to deliver a seamless and fully compliant customer experience. This helps companies improve their risk management and reduce fraud. We provide BFSI companies with solutions for credit underwriting and digital customer onboarding.

What is the differentiation brought to the BFSI industry by the brand?

The BFSI segment is currently primarily focused on desktop data to underwrite customers. However, nearly 400 million Indians do not have adequate access to credit due to low bureau scores. We provide BFSI companies with alternative data sources and scoring models so they can secure these customers and reduce their non-performing assets (NPA). We have market-leading AI-ML-based alternative data solutions to help our customers reduce risk and increase user lifecycle value. We look at multiple data sources, including bank statements, telecommunications, social media, e-commerce, employment, device data, and location, among others.

Read also | Present and future of digital lending

How have the recent guidelines issued by the RBI on digital lending affected the Fintech industry?

The digital lending ecosystem has grown tremendously since the advent of technological innovation, leading to the creation of many fintech organizations that offer lending services. However, this expansion has raised concerns about the privacy of borrower data, unethical business practices by digital lenders, over-engagement of third parties, and mis-selling to unsuspecting customers. Additionally, there have been a number of consumer complaints about digital lending apps charging excessive interest rates or engaging in fraud, among other things. The Reserve Bank of India has issued a detailed set of guidelines for digital loan in order to solve this problem, and he stipulated that digital loans should be credited directly to borrowers’ bank accounts and not through intermediaries.

Digitap being a TSP listed on the Sahamati platform, can you specify the role played by the company?

Account Aggregators (AAs) are RBI-licensed NBFCs that allow customers to consent to the transfer of their financial information from one financial institution to another. Digitap is a certified Technology Service Provider (TSP) that implements the Financial Information Users (FIU) module, enables module certification, and offers analytics in addition to the raw data provided by the Financial Information Provider (FIP). Digitap can connect to all AAs because it is a TSP. For CRFs, Digitap offers end-to-end solutions from a technical perspective, leaving them to focus only on relevant documents. We also offer alternatives to AA for bank statement analysis solutions via net banking and PDF download in an integrated solution module.

How does account aggregation (AA) trigger a UPI-like movement in the financial services space?

The next significant development would be the exchange of information through AA platforms following the implementation of UPI in the Indian BFSI industry. Through the AA ecosystem, users will find it easier to quickly, securely, and consistently exchange their financial information. The process is user-friendly and users will have complete discretion over the information they choose to provide. Additionally, the AA ecosystem will be adopted faster than UPI because the entire flow and process is modeled after the UPI payment flow to provide user familiarity.

Read also | 5 things consumers need to know about digital loans

Please clarify the role of data and analytics in the BFSI domain.

As the BFSI sector moves from a product-centric to a customer-centric approach, data and analytics will play an increasingly important role in the industry. Financial institutions will rely on the availability of accurate data to make decisions about a customer’s creditworthiness and the products that can be provided to them.

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