AI is Quickly Being Leveraged for Improving Customer Experience -Piyush Khaitan

In Interviews, Technology

NeoGrowth is a pioneer in lending based on the underwriting of digital payments data. The Company’s proprietary technology platform offers unsecured loans to merchants who accept card or other digital payments from customers. Flexible repayment is a hallmark of the NeoGrowth business, offering customer’s small daily auto-repayment facility from card-based sales.

Mr. Piyush Khaitan is the Founder & Managing Director of NeoGrowth Credit Pvt. Ltd. He is a seasoned operating executive who has successfully founded a number of businesses and operated them to high levels of success. He has over 30 years of experience in the Payments & Fintech industry focusing on Business Leadership, Payment Processing, SME Lending, Corporate Development, Business Operations, Technology and Strategy.

Tell us something about yourself and what does your company do?

NeoGrowth is a technology-enabled lending business that provides loans to under-served micro, small and medium enterprises (MSMEs). We have pioneered an innovative lending model in India which operates at the convergence of three ecosystems – lending, urban retail and digital payments. Our product design is centred around the business model of the retailers as card swipes over a point-of-sale machine exhibit a good understanding of the business potential, seasonality changes and customer footfalls for underwriting. One of the differentiating features of NeoCash against other vanilla unsecured business loan products, is the daily repayment model which has worked well with our customers.

Besides this, one of the core objectives of NeoGrowth is to have a positive social impact on the financial lives of small and medium business merchants across India, more than 50% of whom are creditworthy but until now have been excluded from accessing loans based on traditional underwriting methods.

What is the role of AI in finance sector?

With the growing adoption of Artificial Intelligence, Big Data and Blockchain technologies in the financial services space, banks and financial institutions have been gradually moving towards a customer-centric approach instead of only a product-centric approach to keep up with the highly competitive market. In this process, cutting edge technologies like Artificial Intelligence have a significant role to play specifically to underwrite customers who are otherwise excluded from the mainstream credit or are first time borrowers and have no or insufficient credit history. Not just these, AI is quickly being leveraged for improving customer experience and delivering best of customer service levels. At NeoGrowth, we lend to Consumer Facing SME Retail Businesses, and many of these do not have proper financial statements. Our research shows that the risk of business failure in these businesses is also very high, especially in the first 3 years of inception. At NeoGrowth, we leverage technology in smart ways to generate proprietary algorithms and build predictive models into the future sustainability and growth of the business. These models become smarter on a continual basis as we feed them with more & more data. This helps us create a bespoke offering in terms of loan amount, tenure and pricing for various kinds of customers.

How big data has enabled you (NeoGrowth) to provide better client services?

We use Deep Analytics extensively to continuously tweak and evolve our credit risk models in tune with changing market conditions and macroeconomic scenario. Data Analytics is used to solve all sorts of problem statements across varied functions be it sales, collections, marketing or strategy. For example, we use analytics for developing deep dive strategy in collection mechanism which helps us identify and follow-up with customers at the right time. Analytics is also used to drive targeted digital marketing campaigns to acquire new customers and offer renewals to existing customers. Besides, we also use our in-house analytics for regular optimization of our risk scorecards and development of models for several business use cases across lead management, acquisition and collections strategy, credit scorecard improvement, marketing strategy as well as in improving workforce attrition.

How is blockchain transforming the future of finance?

Blockchain technology is currently at a nascent stage yet slowly and steadily finding applications in financial services for solving complex problems. By reducing the enormous duplication of information that creates delays, conflicts and confusion in many aspects of financial services, Blockchain can certainly help in bringing in more transparency in the financial sector. It would simplify and streamline several processes providing an automated financial lifecycle.

Is digitization revolutionizing the finance sector? How?

The MSME lending landscape in India is gradually shifting with formalization and digitization driving the market towards disruption. Digital lenders, in partnership with traditional lenders, are solving the major challenges in providing credit by optimizing the levers of cost across each step of value chain. India’s API infrastructure also now enables lenders to easily leverage alternate sources of data for faster and better underwriting. This is accelerated by the continuous thrust of Govt. measures on easing the payments infrastructure network thereby enabling a change in payments behaviour and moving the country towards a digital economy. The recent announcements in the Union Budget on levying TDS on cash withdrawal exceeding INR 1 Crores and ruling out MDR charges on certain category of transactions, is a strong push towards digitizing the economy. These initiatives towards digitization of transactions will lead to strengthening of digital trails which can be intelligently utilized for lending.

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