The coronavirus pandemic has served as a wake-up call for all those banks whose digital operations were growing at a slower pace. The new challenges upon financial institutions have emphasized the need for a more holistic approach and it starts with evolving the customers’ experience by creating more consistent and personalized digital journeys.
The uncertainty of how long the situation will last and convenience of customers have made the banks to further expand their digital services and boost contactless financing, by working with fintech players. Also, some banks have opened COVID-specific credit lines for faster disbursement of loans.
Virendra Kumar Sethi, Head of Mortgages & other Retail Assets, Bank of Baroda says “For our existing asset customers, we have launched a COVID Personal Loan Scheme and our branches are contacting these customers for availing the said facility which can be done with minimum interaction.”
The abrupt halt in the economy, and with bank employees and customer interactions being minimal due to social distancing norms, the banks have no option but to shift to digital operations as soon as they can. Fintech startup IndiaLends provides instant contactless loan and a line of credit ranging from Rs 10,000 to Rs 10 lakh, the interest rate will depend on customers’ credit score. Banks have moved to a digital process by sanctioning home loans online based on income and property documents uploaded by the customer. Also, the banks are going ahead with online sanctions in a limited manner to meet the physical verification norms which will be conducted once the lockdown is lifted.
Contactless financing is the future and banks had realized it in the pre-COVID phase itself, but it’s only now that it has become a key focus area. Currently, to open an account or avail any banking service a video KYC and Aadhaar-based OTP will be generated. For the credit assessment, credit score, online shopping behavior, phone bill, and even social media activity could be considered to run a credit check. Banks are gradually partnering with fintech lenders whose unique selling point is alternative sources of credit scoring. The emergence of an API driven platform economy is bringing about a major change across the financial services industry.
