India’s aggressive adoption of AI can result in massive loan collection efficiency
As per a latest study published by the Brookings Institution, India ranks among the top 10 countries in adopting and funding in Artificial Intelligence. It is said to be ahead of Canada, South Korea and Italy.
With the advent of the digitization era around the world, India is also moving forward on the same lines. As per a research report published by IDC, India’s AI spending is expected to grow at CAGR of 30.8% to touch USD 880.5 million (around Rs.6,490.6 Cr) in 2023.
Such predicted growth depicts that India has taken a long leap in the digitization era, which was marked by the following events happened in the country.
Factors leading to digitisation and technological advancement in the sector:
Going almost 5 years back, we can see that Indian people had no choice but to throw their hat in the ring, when the current Prime Minister imposed demonetisation in the country leading to 3-6 months of currency paucity in the country leaving people no other alternative but to adopt various digital buying and selling methods.
Next step in this journey was when the rollout of nationwide online collection Goods and Services Tax happened. More and more businesses found themselves under the gambit of formalised processes.
The third and the most profound clincher to the digitisation journey encompassing all middle class, rural, educated and semi-educated strata of the country came in the form of Covid-19 Pandemic dissuading all physical contact amongst people, taking over the use of digital currency over currency notes.
The online tracking and deliverance of the Covid-19 vaccine/ certificates to more than 100 Crore people of the country has hit the nail and become one of the world’s largest success stories for using technology to enhance efficiency of operations and ease of facilities for a humongous number of people.
Resulting to all these events, India’s digital transactions has been increased tremendously. As per Ministry of Electronics and IT (MeitY), the volume of digital payments in India has increased by 33% year-on-year (YoY) during the financial year (FY) 2021-2022. A total of 7,422 Crore digital payment transactions were recorded during this period, up from 5,554 Crore transactions seen in FY 2020-21.
Big positive concomitant of adoption of AI in various public domains
As India gears up for digital transformation and inclusion, as I would like to call it, taking big strides in enhancing outreach to more and more remote communities, we increase our potential to bring that many more people into the formal financial system.
By getting veritable facilities to track a business’s growth, customer base, revenues and profits, lending institutions have a massive opportunity to support the baseline of Indian Economy at a granular level. P2P lending companies are an indispensable part of this story. They have been growing their customer base adding value to both their lenders and borrowers by leveraging on the enhanced digital footprints of borrowing entities.
P2p lending companies can grow their business model by furthermore integration with AI in terms of big data management, automating the process, management of leads and risk mitigation to increase their customer penetration and provide a reliable lending solutions.
While borrowers stand a chance to get loans on interest rates commensurate with their risk profile, individual lenders get this unique opportunity to make optimal risk adjusted returns based on their risk appetite and flexibility needs.