In today’s rapidly evolving financial landscape, the lending industry stands at a critical juncture. Be it a mortgage, education, an auto, business, gold, personal or any other loans, giving customers a good user experience is now a priority for banks, non-bank finance companies (NBFCs) and fintechs alike. As technology reshapes traditional business models and customer expectations continue to evolve, lenders must adapt to digitisation to stay ahead of the curve. While some banks and NBFCs have upped the ante in ushering more digital lending ecosystems, particularly after the COVID-19 pandemic crisis, others are still in the debut stage.
Digitisation across loan origination, loan management and collections will reduce costs, improve efficiency and mitigate geographical challenges, but business sustainability will only be attained if lenders can perfect the ‘art of digitisation’. With the ‘art of digitisation’, I meant to indicate that financial institutions like banks and NBFCs need to invest in the right lending system to create a sweet spot in the competitive market.
But how?
The answer is by leveraging highly configurable, scalable and robust lending platform with a repository of APIs, financial institutions will be able to connect seamlessly with internal and external loan ecosystems for wholesome loan offerings.
Pennant’s recent customer meet – pennNXT 2024 – brought together industry leaders from banks, NBFCs, and fintechs to explore and understand the latest trends and innovations in lending. The event served as a platform to delve into key topics such as legacy transformation, digitisation, and the transformative potential of Gen AI in lending practices. Let’s take a closer look at some of the highlights of this groundbreaking event.
In today’s digital-driven banking sector, ensuring robust data security and compliance with regulatory standards, such as those set forth by the Reserve Bank of India (RBI) for Indian Banking sector, is of paramount importance. Pennant’s lending platform – pennApss Lending Factory -, being technology agnostic comes with pervasive encryption capabilities that helps financial institutions to meet regulatory and compliance requirements while mitigating the risk of data breaches and financial losses. For instance, our partnership with IBM, addressed this challenge by offering a cutting-edge lending platform equipped with advanced encryption technology. Harnessing the power of IBM’s Secure Execution for Linux and LinuxONE’s stringent security certifications, Pennant’s Lending Platform enables financial institutions to ensure data integrity and confidentiality at every stage of the lending lifecycle.
During one of the sessions, our founders – Pradeep Varma and Rama Krishna Raju, underscored the pressing challenges faced by traditional banks in light of industry research findings. McKinsey’s recent study revealed a significant trend: 40% of consumers now rely on fintech platforms for their day-to-day financial needs, intensifying competitive pressures on traditional banks. Additionally, Cornerstone Research identified a pressing issue affecting banks: revenue recession, attributed to declining net interest margins. In response, banks, NBFCs, and other FIs must proactively seek solutions to regain their competitive edge. A pivotal strategy lies in investing in comprehensive lending systems to streamline processes and enhance operational efficiency, ultimately elevating customer experiences. Through the strategic deployment of advanced loan origination systems, financial institutions can counteract the impact of revenue recession and meet evolving customer expectations, driving sustainable growth in the long term. In summary, the imperative for financial institutions to equip themselves with robust loan origination systems cannot be overstated. This strategic investment is essential for navigating the challenges posed by fintech disruption and revenue recession, reaffirming their positions as industry leaders in today’s dynamic financial landscape.
Inspiring Customer Stories
The other standout moments of pennNXT 2024 were the inspiring success stories of small, niche and large financial institutions—one specializing in education financing and the other a large financial services provider in India offering diverse range of secured and unsecured loans. . These financial institutions embraced the Pennant’s highly composable and scalable lending platform, encompassing loan origination, loan servicing and collections (delinquency management), to streamline their operations to launch innovative loan products, increase operational efficiencies and drive business growth.
In the education sector, the NBFC faced the challenge of scaling its lending operations while ensuring seamless support for students. By implementing the pennApps Lending Factory, they gained access to modular, lego-block like configurable lending system and a wide API suite, allowing for integration with both legacy and new systems. The platform’s high flexibility enabled them to manage multiple scenarios in education financing, empowering them to adapt to changing market dynamics and scale their business efficiently.
Similarly, in the case of the large financial service provider with diverse loan portfolio, the client leveraged the pennApps suite to optimize loan origination, loan management servicing, and collections. With seamless integration capabilities and high flexibility, they were able to meet the diverse needs of their customers while driving operational efficiency, delivering enhance customer experience and propelling business growth.
Amidst all these a detailed session by one of Pennant’s customers into offering financing solutions for Micro, Small and Mid-sized Enterprises (MSMEs) operating in manufacturing and service clusters stood out. This customer highlighted the benefits of their collaboration with Pennant, particularly in strengthening their Supply Chain Finance Business and Risk Management. By leveraging Pennant’s future-ready lending platform, the customer achieved significant milestones.
Insightful Panel Sessions
pennNXT 2024 also featured insightful panel discussions on “Going Beyond the Hype: Gen AI Use Cases in Lending” and “Legacy Transformation and Digitization.” In the Gen AI panel, industry experts explored practical applications of GenAi in lending, highlighting its potential to revolutionize processes such as credit scoring, personalized customer experiences, fraud detection, and automated underwriting.
Mr. Akshath Balachandra, AWS, Financial Services Head says, “Two key things that has changed with Gen AI is: one volume of data and the second is the volume of parameters.
The discussion on legacy transformation and digitization addressed the challenges and opportunities of modernizing outdated lending systems. Panelists emphasized the importance of agility and innovation in navigating this transformation, highlighting the benefits of platforms like pennApps in driving operational efficiency, scalability, and customer-eccentricity.
In conclusion, pennNXT 2024 was a testament to the transformative power of technology in the lending industry. Through customer success stories, panel discussions, and expert insights, attendees gained valuable knowledge and inspiration to drive innovation, performance and growth in their respective organizations.
For banks, NBFCs, and other non-bank institutions, pennNXT served as a platform to explore new possibilities, exchange ideas, and chart a course for the future of lending. As the industry continues to evolve, platforms like Pennant’s Lending Factory will play a crucial role in driving innovation, efficiency, scalability, and customer satisfaction, ultimately shaping a more inclusive and resilient financial ecosystem.
We have the recordings of some of the insightful sessions and would be glad to share you the link to the same. If interested, please drop us a mail to: marketing@pennanntech.com
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