ZestMoney bets on tech capabilities to drive loan collection during COVID crisis
Bangalore, June 29, 2020: COVID-19 has impacted the financial services industry in many ways. With a large number of people facing a liquidity crunch and uncertainty still looming, the collection efforts of several lenders in the ecosystem have taken a hit.
ZestMoney, India’s first and largest AI-driven EMI financing platform has been able to overcome this trend with its early bets on cutting edge technology aiding collections.
With its strong tech capabilities and a consumer-first approach, the company witnessed a 15% improvement in its NPA. Repayments also improved by 6% during the lockdown period; all this during what has been one of the toughest times for the financial services industry.
The consumer lending fintech company has been using machine learning and AI solutions to prioritize at-risk customers for more productive attention. Advanced machine learning models were also used to predict consumer receptivity to contact. Innovative content strategy was also deployed to reach out to customers.
Priya Sharma, Co-founder and CFO at ZestMoney said, “While the AI-driven debt collection model has been integral to our operations, it is all the more relevant in these times. With COVID impacting several business models, consumers are also looking for contactless mediums to avail financial services. Our end-to-end automated lending platform was built on the simple premise that the future is digital and we see the proof in the numbers. Our collection rates continue to be the best in the business.”
“We also look at our tech capabilities as a means to empower customers. Our loan collections model is driven by technology with minimal human interface, improving the overall customer experience. 92% of our customers have not received a phone call from us.” added Sharma.
Traditional lenders have long relied heavily on in-person visits or tele-calling to contact customers. These channels of communication had become redundant during the lockdown. Customers are not receptive to brute-force dialling anymore. In a lockdown like scenario, one cannot operate call centers too. This also happens to be an operationally heavy model, with more manual intervention required.
ZestMoney utilizes various digital mediums like email, text messaging, push notifications, Whatsapp and IVR to reach out to customers. This approach helps leverage the effort taken to prioritize value-at-risk first. Based on multiple tests conducted in the last couple of years, the team is able to understand which segment of users needs what kind of medium. A very low-risk customer only needs a push reminder whereas a high-risk customer may need tele-calling at an early stage. This gets us higher connectivity at lower costs.
With digital adoption expected to witness a surge, the lending industry will have to rely on advanced technology to target the right set of customers. The demand for reliable and seamless credit is also expected to surge in the coming months. Only strong, tech-led innovations will help digital lenders stay relevant in the post-COVID era.