NOVEMBER 201919being committed. What's better ­ penalise or prevent ­ the answer is clearly in favour of prevent. Given all this can be done at speed humans cannot match, institu-tions with this capability have got unmatched leverage to beat competition & grow faster than everybody. Credit ScoringCredit Scoring has been the bedrock of any lending decision. The credit scorecard has evolved over the years but restricted or ready access finance for huge populations across the globe, particularly in emerging & under developed economies, as credit scores were primarily developed based on banking behaviour. Given these economies had cash as primary transaction me-dium, these populations had unreliable credit history & hence fewer opportunities for future credit. Also, the data has been built over decades hence for people with recent access to banking are likely to take at least a few years before they develop enough credit history for a score. However, technology combined with behavioural science, advanced statistical tools has again massive-ly disrupted the way credit underwriting is done. To-day, companies like Lindsell work on alternative data sets like social media profiling, analysing mobile phone usage patterns & other personal attributes to arrive at a propensity to default and their solutions have helped institutions lend to people who hitherto did not have access to finance within acceptable bands of default probability. Other newer areas where we have seen a paradigm change due to FINTECH are Lending (Borrowing), Global money transfers, Payments, and Banking. Lending (Borrowing)Peer-2-Peer platforms, Digital lending, harnessing the power of big data to take underwriting decisions are few of success stories of adopting the power of technolo-gy in the world of finance. Lending club, a 10-year-old FINTECH has lent over $38 billion through its platform which easily rivals many established banks in terms of growth & annual disbursals. These Fin-tech companies have reduced the time to close a commercial transaction with the customer from days to hours and in some cases even minutes. This is has resulted in huge savings in terms of reduced man-power requirements, high productivity, better compli-ance & overall an enriching experience for the customer. Most of these new age companies have completely taken the process digital with minimal human interac-tion, at least at the customer end thus eliminating el-ements of judgement, negligence, and others replacing them with robust technological algorithms by providing a seamless experience & little chances of error.Technology based WorldIt may seem all is positive with technology replacing humans. At some levels, the introduction of technolo-gy at these vital touchpoints in the business chain has also created friction primarily due to its nascent stage in terms of advancement of such applications in busi-ness. As such, these frictions are opportunities for fu-ture developments that will deal with more complexity & use advancements such as Machine learning, neu-ral networks to create human like experiences at the psychological level. This would then create an expe-rience as real as a human-to-human interaction with-out the customer ever knowing that the one serving him is a machine. It has also been believed by many that technolo-gy will progress to a point where it becomes more ef-ficient than the people who made them. And the real problem with that would be that a very compelling case would be made for a world based on machines. They're smarter, faster, less prone to mistakes and much more economically viable.Do we really need such a world is not the real ques-tion! It's inevitable. The real question is `Are we ready for such a world'. It has also been believed by many that technology will progress to a point where it becomes more efficient than the people who made them
< Page 9 | Page 11 >