Cloud services Transforming Geography to History for the NBFC sector

In the highly competitive NBFC space, companies have been exploring technology-first solutions and  partnering with fintech players to ensure better customer experiences (CX), increased agility, scale, speed and cost-optimization in the delivery of their services. Many are in the process of migrating their core businesses to the cloud, in collaboration with providers, as a business strategy rather than just a technology enabler, as use cases are demonstrating the overall gains that can accrue.

The second panel discussion, in a series of thought-leadership events hosted by Moneycontrol Innovation Next, presented by Google Cloud, set out to explore how the NBFC ecosystem has been leveraging the power of cloud to enable sustainable growth for enterprises and promote inclusive growth for the financially marginalized.

Themed ‘Banking on Technology: Transforming NBFCs with the Cloud’, the discussion witnessed Anant Gupta, FSI Leader, Google Cloud; Manoj Kumar Nambiar, Managing Director and Board Member, Arohan Financial Services; Shishupal Rathore, Senior Vice President, Business IT, Motilal Oswal Financial Services and Samir Mohanty, COO & CTO, Avanse Financial Services, narrating successful use cases in terms of journeys to the cloud.

“Around two years ago, we started by taking customer journeys to the cloud,” said Samir Mohanty, an education focused NBFC. At present, about 50-60% of the company’s front-end applications are on cloud and it has been receiving an average of 30 lakh hits on its digital platform and other businesses. While most of its customer-facing applications, data warehousing and analytics platforms have moved to the cloud, other core platforms – document management, core accounting platforms – are still at data centers. “We are in the midst of discussing the journey of core businesses to the cloud with our partners,” he shared.

Similarly, diversified financial services major, Motilal Oswal, started its journey on the cloud three years ago. Shishupal Rathore recalled, “We explored various issues before we embarked on the journey – our ability to meet all compliance requirements, talent availability, whether the costs were justified, etc., and debated evaluation parameters. Then we approached private cloud providers for a roadmap before taking a staggered, step by step approach. First, we went with one cloud provider, gained experiences and then went in for a multi-cloud strategy.” As things stand, 10% of the company’s operations, i.e., about 85GB of data, has been moved to the cloud and it aims to have 25-30% of operations on cloud in the next 2-3 years.

In 2017, Arohan Financial Services, an institution that deals with over 2 million MFI clients through a channel of around 5000 field officers, decided to aim for a model that is ‘paperless from the front and cashless from the back’. “Today, 100% of our disbursements are cashless, going directly into the bank accounts of customers and almost 80% of the repayments are cashless too,” declares Manoj Kumar Nambiar. While the company’s core system is on private cloud, all other aspects – the paperless front-end, data analytics, credit scoring model, the payment gateway on its customer app – are on public cloud. “We are proud that being an MFI, our complete customer journey is now paperless and digital. Now, we are piloting our first-in-line product for existing customers wherein a loan can be completed in just 30 minutes flat; it would have taken 15 days around 5 years ago,” he added.

From a cloud provider perspective, Anant Gupta explained that the cloud has gone through three levels of evolution – first, the focus was on infrastructure and getting the business core onto public cloud; next, service providers started building efficiency tools and enablers around handling the same infrastructure in a more efficient manner; the third wave is around innovation, which involves providers like Google Cloud offering to integrate businesses on cloud with enterprise cloud offering.

He offered instances of innovation, saying, “To support banks and NBFCs in their quest for customer acquisition, we integrate enablers through common customer data platforms. When it comes to data analytics, Google is known for handling a large quantum of data, with 9 products and over a billion users each. We bring the same engine to enterprises, making chunk size data analysis available to our customers. We also make information available on-prem, to provide organizations with the flexibility to budget for resources in an on-demand model.”

Google Cloud is also leveraging other Google applications, like Google maps, to improve the service delivered and maximize the collection efficiency for MFIs. Further, linking Google applications to cloud apps enable human-like interactions with customer bases in Indian vernacular languages of their choice.

Effectively, cloud is not just an IT enabler but an innovation driver and business enabler, which opens up a host of possibilities on various fronts. The panelists went on to discuss the impact of using cloud on innovation, marketing, expansive reach, delinquency management, inclusion and providing those in the villages and hinterlands with access to financial services. Cloud also offers the flexibility to scale and descale infrastructure, based on the growth of the business and frees up organizational bandwidth so companies can have richer interactions with their customers and optimize costs while expanding services. Most importantly, cloud providers are enabling the entire value chain of digital lending for NBFCs and enabling data mining, analytics and hyper-personalization of customer experiences.

 Moneycontrol journalists were not involved in the creation of the article.