siliconindia | | September 201919E very important development happened on April 18, 2019 when RBI issued draft guide-lines for public comments proposing Regulatory Sand-box (RS) to catalyse innovations by FinTech firms. In a way, it signified the recognition of the disruption technology is bringing in the space of financial services industry, just like any other sphere of life. The draft guideline states, `Areas that can po-tentially get a thrust from the RS in-clude microfinance, innovative small savings and micro-insurance prod-ucts, remittances, mobile banking and other digital payments'.Microfinance industry has wit-nessed rapid evolution of technol-ogy in use, over the last few years. A decade ago, high quality oper-ations and internal controls were riding completely on paper-based, cash-based mechanism and the use of technology was limited to a basic loan management system and MIS. It was considered only appropriate that services for poor and underprivileged were running on antiquated methods. However, subsequent years witnessed rapid change in the landscape with technology enabling almost all the functions withinthe domain of microfinance. Today, operations in most NBFC-MFIs are characterised by digital origination of loan ap-plications through mo-bility devices like Tablets/ Smartphones, internet con-nectivity to run automated processes like e-KYC, Credit Bureau, internal credit rules, validity of bank accounts etc., digitally capturing important customer protection steps like house-hold verification, trainings, group approval by senior officers and loan utilisations, automated creation of loan accounts, availability of repay-ment schedules/ demands on mobili-ty devices and automated accounting of repayments made by customers. In addition to operations, other func-tions like Internal Audit, HR, Risk Management etc. also rely heavily on the usage of technolo-gy in most of the leading NBFC-MFIs.Going forward, some key agenda for technology emerging in this industry are ­ a) differential pricing of services basis credit-risk profile of borrowers; b) much wider product range catering to per-sonalised requirements; c) improved client protection regime d) high cus-tomer service quality e) quality of life for the front-line staff ensuring better work-life balance. In terms of technology, NBFC-MFIs will fur-ther augment the usage of Mobility, Analytics and Cloud services. Ma-CIo INSIGHTSFUTURE OF IT IN MICROFINANCEBy Arvind Murarka, Head- IT and Neeraj Kumar Lal, Head- Strategic Initiatives, Arohan Financial ServicesArohan Financial Services Limited (Arohan) is one of the largest NBFC-MFIs governed and regulated by the Reserve Bank of India. Headquartered in Kolkata, the organization offers a range of financial services which includes low ticket size credit products.Arvind Murarka
< Page 9 | Page 11 >