The era of Big Data and Artificial Intelligence has ushered in a new era of convenience, sophistication, and ease in performing tasks. Fintechs offering instant loans in India have come to transform the entire lending architecture that employees advanced technological models to disburse quick and easy loans in India.
How does AI assist Fintechs giving instant loans in India?
Fintech companies are basically companies that offer financial services with the aid of advanced and enabling technology. Most Fintechs in the Indian market offer instant loans – a type of unsecured credit product that reaches beneficiary bank accounts in super-quick time. AI and Big Data have helped drive several processes that these companies employ. Let’s look at exactly how these technologies assist Fintech lenders in the current day.
Generating approvals: One of the main areas where AI becomes applicable to Fintech companies is while assessing consumers’ credit profiles and subsequently generating approval. A consumer’s essentials as obtained from the credit report are evaluated instantly by an AI-powered risk assessment algorithm and instant approval is provided to the applicant if all the internal norms are met.
In digital verification: When a consumer applies for an instant loan, certain documents need to be provided and only then will the lender process your loan. When you submit your supporting documents including your bank statement and your salary documents, these documents are verified digitally and lenders will accordingly go ahead with your application.
Fraud detection: Another important area where AI has benefited Fintech lenders is in identifying and detecting fraud. While performing digital verifications of consumer profiles, the incidence of fraud can be eliminated through AI.
Managing customer data: The number of consumers applying for instant loans in India is quite massive. Big Data comes of use to manage customer data, as managing such large swatches of data requires the employment of powerful, data-driven, innovative technology.
Determining customer eligibility: As already mentioned earlier, AI is used to determine if a customer can qualify for a loan or not. Various credit accounts linked to a customer’s profile, total outstanding debt across credit accounts, defaults or late-payments made in the recent past, length of the credit history and other aspects are evaluated and eligibility is accordingly determined. Customers who have a good credit outlook are often offered a much lower rate of interest on their loan, while those with a relatively poor credit outlook will often face rejection or will be offered a much higher rate of interest on their instant loan application.
Information security: AI-powered frameworks also assist in helping lenders keep their data secure. Security breaches and data hacks are a common problem that many banks across the world face. AI-powered technologies help keep databases secure by identifying potential risks and preventing the occurrence of information thefts.
As such, there are related technologies, those of the likes of BlockChain and Machine Learning that also help Fintechs improve the efficiency of their overall processes, protect their data and prevent incidents of fraud.