How Location Intelligence is Aiding NBFCs Solve Critical Business Challenges and Mitigate Risks in a Fast and Intelligent AI-driven Way

In India, the NBFC sector has been in charge of fresh loan disbursals for the country’s underserved retail and MSME markets. The lending book of NBFCs has increased by over 18 per cent in the last five years, owing to a better understanding of the target market, the use of technological developments, and distinct business models to reach credit-starved regions.

Technology, of course, has always been a core enabler, that has helped financial institutions in achieving sustainable growth and in curating customer engagement and satisfaction that is personalised and multi-channel. NBFCs today are focused on innovation that can enable them to place themselves at the forefront of a future that is technology-driven, and location intelligence is one of the most crucial trends that can help them achieve that.

Apart from other contextual ingredients, location intelligence is quite an essential parameter for NBFCs to be able to analyze data spatially and garner better insights for any kind of potential market discovery. The focus therein lies in defining the driving growth factors, increasing customer satisfaction and reducing to gain business advantage.

In today’s time, in order to succeed, NFBCs need to incorporate both market-driven and market-responsive strategies. They need to possess the ability to both predict as well as deliver services that customers are looking for or are in need of. Location intelligence thus, becomes an asset, offering NFBCs a wide array of advantages, ranging from competition tracking, estimating customer engagement, marketing, risk assessments etc.

Hence, let’s take a quick look at how location intelligence can help in making better decisions and enriching customer experiences:

• Risk Assessment: Being aware of risk factors, and accounting for them proactively, can give lenders an edge when assessing overall portfolio risk. Furthermore, location intelligence allows NBFCs to adjust these risk indicators based on the borrowers’ location and the dangers that come with it, allowing them to provide more precise data-driven insights while ensuring that new catchment areas are not overlooked.

• Customer Segmentation: Location intelligence takes consumer segmentation to a new level for NBFCs. Location intelligence-based marketing tactics can enable the formation of ultra-targeted personas with unique financial requirements and preferences by combining numerous layers of data onto a single map. This can assist them in achieving new levels of personalisation, as NBFCs will be able to provide the exact credit products and services that their consumers require.

• Analytical Forecasting: Location intelligence, which provides NBFCs with a wealth of data, can aid in the discovery of patterns and the garnering of important insights through the use of sophisticated algorithms. The information found can be used to foresee and create future possibilities. It facilitates the discovery of genuine gaps in their network which are based on demographic data and customer segmentation.

• Uncovering Best Locations and Products: Location information, combined with analytics, can aid in precisely linking service demand and supply to geographic areas. This can assist NBFCs in developing targeted marketing campaigns based on the information acquired about the finest areas. Thereby, assisting NBFCs in offering the next level of business and market knowledge by focusing on the products that are genuinely desired by customers.

• Cost Management: Another important aspect that location intelligence can help NFBCs with, is the visualisation of results, including spending. This, may not only end up assisting companies in getting information regarding their daily expenditures such as salaries, rent, and promotion, but it can also assist in the detection of hotspots of underperformance, that may have been incurring the organization’s additional costs. With the help of visual mapping in location intelligence, it often becomes simple to identify similarities and trends in data at a global, regional or local level, as well as individual levels, which can help in the identification of previously unknown sources of cost and its causes.

There lies a massive advantage for financial institutions in understanding location data, by way of marketing opportunities or credit risk opportunities or even anti-money-laundering. As credit services become more personalised and targeted and NFBCs penetrate deeper into Tier II and Tier III cities, people are no longer being treated as faceless numbers. Location intelligence helps NBFCs in recognising their customers as real-life assets, with their own unique expectations as well as preferences. Forward-thinking financial organisations can utilise all these sites that are gathered for the development and introduction of new products and services. Leveraging location intelligence, NBFCs can assign additional resources that can help in meeting their client expectations even better.

Gaining an understanding of where people live and also the community that surrounds them, is the key to actually bringing actionable insights to the business model and garnering that competitive edge that can help firms in becoming market leaders.

(The author is Mr. Ashwani Rawat, Co-Founder & Director, Transerve and the views expressed in this article are his own)