REZO’s AI-driven solution to reduce NPAs of FinTechs amidst new RBI guidelines

• The AI-powered Collection Product of Rezo.ai to help LSPs (lending service providers) reduce bad loans in digital lending amidst RBI’s tightening regulation on Default Loss Guarantee
• RBI’s recent guidelines barred the total amount of default loss guarantee cover on any outstanding loan portfolio at 5% of the portfolio’s value

Rezo.ai has launched its AI-powered ‘Collection Product’ for LSPs (lending service providers) to help them improve their books by recovering loans more efficiently amidst RBI’s tightening regulations on Default Loss Guarantee in Digital Lending. The powerful AI algorithms behind Rezo’s Collection Product can analyse large amounts of data and identify patterns and trends human agents often miss. This automation has the potential to reach 90% of the borrowers with contributions upto 85% to the total loan collection, thus effectively contributing to reduction in the NPAs of Financial Institutions substantially. This reflects positively in LSPs’ revenues and cuts their operational cost too.

In June of this year, the RBI issued guidelines concerning lending arrangements between digital lenders, including BNPLs, and NBFCs, particularly addressing first-loss default guarantees (FLDGs) provided by digital lenders, LSPs, to mitigate potential non-performing assets (NPAs). Before these regulations, online lenders commonly offered guarantees ranging from 20% to 100% to their lending partners, including banks and NBFCs, to safeguard against losses stemming from loan defaults. The RBI now mandates that the defaulted guarantees provided by digital lenders to regulated entities must not surpass 5% of the total loan portfolio amount.

Since the FLDG has been restricted by the RBI to 5% of the loan portfolio, lenders are now accountable for a significant 95% of potential losses in case of defaults. This has led to NBFC and FinTechs in the digital lending space staring at a substantial operational revamp, adjusting their business models and rising costs. In light of the above, NBFC and LSPs need to employ proactive strategies that fetch loans and improve their books, allowing them to continue partnering together.

Dr Rashi Gupta, Chief Growth Officer, Rezo.ai, said, “We are pleased to make our AI-powered Loan Collection Product available for LSPs and NBFCs. Our advanced AI-driven tailored customer conversations and predictive analysis not only ensures compliance with new regulations but also enhances collection efficiency, ultimately enabling our partners to adapt, thrive and continue delivering value to borrowers, lenders and lending service providers.”

The ‘Collection Product’ analyses every borrower’s profile and payment delay reasons to classify them based on similar characteristics, behaviour, or needs to avoid future risk of missing payments. By analysing the reasons behind missed payments, it can also predict the delinquency pattern of borrowers. By segmenting customers based on delinquency level, the collection product prioritises the efforts and allocates resources more efficiently. For example, customers who are only a few days behind on their payments require a different approach than those who are several months behind. This AI-driven automated and tailored approach can help LSPs and NBFCs identify the most effective collection strategies and target their efforts on the debts most likely to be paid.

Rezo.ai’s Loan Collection Product has already helped a financial services leader- with a book size of more than 10 billion USD and a customer base of more than 15 million- achieve a 90% connect rate and contributed 70% to the total loan recovered for various DPD buckets. Increase in collection efficiency for the initial buckets automatically leads to lesser NPAs. Rezo.ai is currently handling 30 Lakh automated calls daily, equivalent to the function of a 20,000-agent contact centre. Rezo’s conversational AI capabilities can help NBFCs, Banks and LSPs improve their books and reduce NPAs through AI-driven insights and automation.

About REZO (rezo.ai)

Established in the year 2018, REZO AI was founded by IITian couple Manish and Rashi Gupta with an ambition to harness the power of AI-Powered Contact Centres to provide customers, employees, and agents with frictionless and satisfactory experiences. Based in Noida, the company has been catering to industries like automobile, insurance, logistics, education, diagnostics, and travel. The AI-powered solution by REZO AI helps businesses save costs, increase efficiency and generate higher revenue. The cost-effectiveness of the REZO AI platform makes it ideal for businesses of all sizes and is highly scalable. The company currently handles 45 million calls per month for its clients across the nation.