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Fintech helps banks disburse more loans

By:  GK GUPTA(ET) , Place:  Chandigarh ,  Update:04 Sep 2017
 
Two years of fintechdriven reach has helped banks grow about 15-20 per cent indicating that banks' dependence on `feeton-street' to campaign for loans may recede in a few years. 
Bankers said nearly a third of their customers below 30 years were on-boarded through the digital platform. 
Banks are using fintech players to qualify good customers faster and give on-the-fly credit. Significant reduction in time used for taking better credit decisions have led to higher conversion in disbursal of loans. 
“The idea is to get a better sense about the customers. We are selectively providing credit support to customers on Amazon, there is fintech Power2SME which we work with, we are also working with Uber drivers,“ said Ashok Garg, executive director of Bank of BarodaBSE 0.04 %. 
“These tools help us in doing better due diligence of our potential customers. The quantum of money that we lend via these channels is also increasing gradually.“ 
RBI data showed retail loans grew 15 per cent while overall banking credit grew 4.7 per cent on a yearon-year (YoY) basis. 
Personal loans grew the most at 35.7 per cent followed by credit card outstanding at over 32.5 per cent. Loans to weaker sections also grew over 11 per cent on a YoY basis. 
“Fintech is collaboration for us, a lot of machine learning is happening via them,“ said Pralay Mondal, business head ­ retail and business banking at Yes BankBSE -0.51 %. 
“We are working with aggregators as well; we don't have a database of 20 million people so we are working with channels which are sitting on a large database. Traditional channels are doing well, but incrementally, we see the trend changing.“ 

Another private sector lender Kotak MahindraBSE -0.91 % Bank's online business grew three times over the last couple of years. Last year, its online lending business only for personal loans grew 12 per cent and as of last quarter that number moved up to 23 per cent. 

 
 
 
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