Role of technology and the future of housing finance in India

Jyothirlatha leads the development of a customer first technology platform. With an experience of almost three decades in technology, she has spent close to a decade each in ICICI Bank and TCS in various roles. She led the technology department at Vodafone-mPesa and was the Chief Technology Officer of Dewan Housing Finance Limited. She holds a Masters in Engineering from VJTI Mumbai.

The NBFC space has witnessed drastic technology-driven changes over the past few years. Existing players have begun to turn to their IT departments for improved efficiency and to facilitate game-changing innovation. Customers, who have their expectations set by other digitally savvy industries, now look to swap legacy financial institutions with digitised services to handle their funds. FinTech start-ups address this gap in the market and develop customer-friendly digital solutions from ground-upto boost customer retention. And now with the pandemic still at play, the challenging macro-environment provides a further fillip to this burgeoning trend. This pace of change shows no signs of slowing.

Thus, picking and regularly updating the right technology stack has become a crucial factor for business growth for Non-Banking Financial Companies (NBFCs). For instance, the adoption of cloud compatible technologies in the sector. To cater to market demand, the adoption of cloud technologies among NBFCs have enabled agility in launching the products and scalability as per the need. This advantage of scalability has been beneficial to both, the financial entities as well as the consumers. It has allowed these entities to operate at a comparatively low cost for high volume, providing cost-effective scalability to businesses at much faster time. However, while cloud offers advantages, organisations should also focus on having a cloud security framework in place for access control and data leakage prevention.

Digital play in availing housing finance
Similar to the paradigm shift in the NBFC sector, the housing finance sector, too, has moved towards digital irreversibility. Across geographies, businesses and customers are being compelled to become digitally savvy to minimise human interactions.

In the last two years, despite increased demand for home loans, customers no longer wanted to risk having face-to-face meetings with visitors. The lack of physical contact and pandemic-induced lockdowns made home loans processes challenging. It was observed that enhanced digital capability, especially in the lending business, offered a great deal of benefits for an organisation especially around customer experience and better decision-making. This transformation of customers urged digital businesses, such as Godrej Housing Finance, to accelerate and adopt a digital-first approach. From the onset, the business aggressively expanded its digital infrastructure through fintech partnerships. Capabilities like Open API layer for partnerships and sales assisted digital journeys effectively addressed customer needs while enhancing customer experience.

It also introduced product innovations, Zero Touch Loan as a channel of service that enabled digital end-to-end presence-less loan delivery This has been instrumental in reducing the requirement of physical interaction between relationship managers and consumers, including the regulatory need of signing multiple pages of the documents. In addition to this, product features like ‘Design Your EMI’ help address larger customer base by allowing customers greater flexibility to tailor the product to their needs.

Lastly, data driven organisation is another transformation which requires strong data capabilities and ability to get insights. To this end, Godrej Housing Finance has initiated the journey towards data driven decisioning with the setup of datalakehouse. This will act as a platform for the AI and ML usecases.

The way technology was looked upon in the housing finance industry is slowly changing. With capabilities such as Video KYC, Video PD and e-sign, the paper-heavy process has been digitized to a large extent. At a time, when digital technologies have become integral to business models, players, both new and existing, are now looking to go the extra mile by embracing new technologies like cloud, RPAs, Artificial Intelligence, Machine Learning improve the lead conversions, get early warning signals, and providepersonalized experience to the customers. Initiatives like Account Aggregator and OCEN are further expected to improve the digital adoption in this sector. But, it does not end here. There is still tremendous potential for the sector to explore technology as the fore front and bring innovation that can bring value.