CASHe is the country’s fastest growing digital only lending platform focussed on improving the financial worth of young urban professionals with transparent and simple short term financial products. Established in 2016 CASHe today owns the biggest loan book at this point in time.
Mr. Ketan Patel is the Executive Director and CEO of CASHe. Prior to CASHe, Ketan served Kotak Mahindra Bank for over 18 years where he had an illustrious career heading some of its key portfolios ranging from private banking, wealth management and most recently, headed it’s Composite Business Solutions and E-commerce vertical. In his role as the Head of E-commerce at Kotak Mahindra Bank, Ketan oversaw setting up a dedicated vertical for the fast-growing E-Commerce business.
Tell us something about yourself and what does your company do?
I joined CASHe as its CEO just over a year back. Prior to CASHe, I was with Kotak managing their key business portfolios ranging from private banking and its Composite Business Solutions and E-commerce vertical.
CASHe is India’s most preferred digital lending company for young salaried millennials. CASHe was found with one clear, straightforward purpose: to provide India’s urban working millennials with a path to better financial health with the aid of technology through their smartphones. We began our journey in April 2016 knowing that there was a huge hole in the financial services industry. We realized that a huge portion of young salaried millennials are underserved or unserved by traditional lending institutions. Lack of financial data and credit history makes it difficult to perform risk assessments and makes them suboptimal borrowers for traditional lenders. The reasons attributed to this was that these group of people lack traditional credit data and as a result are effectively ignored by the financial sector. Low credit penetration and, in particular, low unsecured credit is primarily because of Indian citizens being ‘thin-file’ or ‘no-file’ customers from the point of view of these lenders. CASHe recognizes such concerns and offers instantaneous short-term personal loans ranging from Rs 10,000 to Rs 3,00,000 with a repayment tenure of 60 days to 1 year to young professionals without any hassle that a typical bank makes them go through. The company provides personal loans based on the client’s social profile, digital footprint, merit and earning potential using its proprietary algorithm based machine learning platform. It is a new-age digital lending company that basically does lending based on a sophisticated AI-based algorithm called the Social Loan Quotient (SLQ). The mathematical algorithm developed in-house finds out the risk of a borrower based on his social and mobile data footprints. It examines the user’s phone usage and all data that is available in the public domain. Its model goes beyond traditional credit-risk metrics and assesses the goodness quotient in the borrower and the ability to repay. Hence, the company lends to younger people who are either near-primee or subprime borrowers with or without a prior credit history. We are challenging the status quo and offering an alternative to traditional banking channels for accessibility to financial products to our customers. Our agility and innovation have set us apart from conventional banks and financial institutions. Our out-of-the-box business model leverage technology to deliver financial services in a cost-effective, swift and convenient manner. We operate in a digital world that surpasses that of a high-touch bank model in terms of scalability.
How big data is helping you to provide 360-degree integrated client services?
Big Data and analytics has changed how we make our lending decisions. With more information being available about our customers’ needs and preferences, we found it was important to form a complete, 360-degree view of each customer. We use better data analytics to gain a much more complete understanding of our customer behavior. To achieve this 360° view of the customer, we leverage Big Data. Our Big Data backed 360°customer view model captures and structures all customers, their transactions and account data. All communications between the customer and us via email, service calls, website, bots, social media along with their demographics, credit, and address validation information and segmentation data are stored here. This 360°customer view model helps us to organize, enhance, manage, analyze and disseminate customer information across all departments. With analytics know-how, we can extract relevant information to help foster enhanced customer engagement, increased revenue, and long-term loyalty.
How blockchain is poised to change lending opportunities?
For any business to grow bigger and make a difference to the world, it needs to have a unique proposition. Technological leadership in the form of AI, big data analytics and Blockchain allows lending companies to predict behavior of borrowers, secure transactions beyond conventional metrics. We were the first digital lending company in India in the Fintech space to demonstrate the integration of Blockchain technology in our lending platform.
Blockchain is now seen as a viable technology for the financial services industry. According to a report released by Santander, by 2022, blockchain technology is poised to save banks $20 billion a year in infrastructure costs. Many banks and financial institutions have already initiated projects based on blockchain technology for lending, payments and securities trading. They are investing considerably in blockchain technology to transform existing cumbersome and inefficient processes. Blockchain helps alleviate crucial pain points for many financial services organizations, and thus blockchain offers an attractive value proposition. Below are some of the benefits that can be derived from blockchain in lending. Lending companies face data management challenges during loan collection and transfer processes. Blockchain technology could help make the process more efficient and streamlined. When you integrate blockchain in your lending platform, time and resources, business rules and processes are taken care of by algorithms. Reconciliation no longer exists, because the data is genuine and the need for trust is virtually wiped out. The security is no longer in question, as key facts and changes are transparent and this creates a lot of transparency for the lenders. They can find out the transaction history for an applicant from the initial submission to the actual fulfillment of the loan. From reducing costs to clamping down on unrestrained bureaucracy in traditional lending, blockchain makes the lending a more seamless and efficient experience for both banks, lending institutions and customers alike.
How AI is transforming loan management?
As loan management forms one of the important operations of banking and finance companies, the adoption of AI has grown to do all redundant and mundane tasks more efficiently. AI decreases the burden of lenders by automating credit monitoring and background checks of the applicants. It also assists the borrowers to track their credit score, connect to a lender, and get instant loans at the time of urgency. AI helps collect customer data from all across social media and online channels to create a profile of the borrower which predicts the potential risks and benefits associated with the loan request. Also, predictive analytics lets the companies improve their decision-making processes in regards to the timely detection of internal and external frauds and checking the authenticity of documents submitted.
CASHe is one of the earliest adaptors of integrating AI in its lending platform. We provide loans based on the client’s social profile, digital footprint, merit and earning potential using its proprietary algorithm-based machine learning platform. It is a new-age digital lending company that basically does lending based on a sophisticated AI-based algorithm called the Social Loan Quotient (SLQ). The mathematical algorithm developed in-house finds out the risk of a borrower based on his social and mobile data footprints. It examines the user’s phone usage and all data that is available in the public domain. Its model goes beyond traditional credit-risk metrics and assesses the goodness quotient in the borrower and the ability to repay. Hence, the company lends to younger people who are either near-prime or subprime borrowers with or without a prior credit history. We are challenging the status quo and offering an alternative to traditional banking channels for accessibility to financial products to our customers. Our agility and innovation have set us apart from conventional banks and financial institutions. Our out-of-the-box business model leverage technology to deliver financial services in a cost-effective, swift and convenient manner. We operate in a digital world that surpasses that of a high-touch bank model in terms of scalability.
Is digitization a revolution in the lending process? How?
A recent report by BCG indicates that over the next five years, digital lending is an unmissable 1 trillion-dollar opportunity. This has been spurred on by lending undergoing a massive transformation, especially in developing economies that are likely to become data rich before being economically rich. Digitization of the financial process has played a key role in the overall economic progression of India. It has helped Indians move from cash transactions to digital transactions be it debit cards, credit cards or mobile wallets has proved to be a major propeller in economic development. The government is constantly working towards cashless payments by restricting the values of cash transactions and incentivizing digital payments. Digital lending companies have now set up open architecture layers such as Aadhaar, UPI and Bharat Bill Payment Systems; which will go a long way in boosting digital and data-enabled lending. Fraud prevention is a strategic goal for lending companies as they are now increasingly using the latest technologies like AI and Machine Learning to help detect fraudulent activities in their transactions. A fine-tuned machine learning solution can detect up to 95 percent of all fraud and minimize the cost of manual reconciliations, which accounts now for 25 percent of fraud expenditures.
Lending institutions that can’t support digital and algorithm-driven lending in this changing landscape are mostly going to become obsolete. Digital Lending is not just a new trend. It is the future of lending the ever-growing demand for quick loans acting as a catalyst for the FinTech industry, and India is poised to become one of the largest digital economies in the future.