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Mobility Helps Religare Finvest Go paperless

January 22, 2016 | Mint

Source - http://www.livemint.com/Companies/8Rwd0bkflDu96Epaj2BYhI/Mobile-helps-Religare-Finvest-go-paperless.html

Religare Finvest Ltd (RFL), a subsidiary of Religare Enterprises Ltd, a non-banking financial company that focuses on financing small and medium enterprises (SMEs), was managing its debt management and collection through an in-house system.

Field debt collection, a critical part of RFL’s business practice, typically relies heavily on paperwork. But over time, the company noticed delay in its debt collection due to paper-based tracking which, in turn, made data validation a major hurdle.


In the past, collating validation fields such as PAN card number, instrument/reference number, data types validation and others was a difficult task. There were even instances where reconciliation issues arose when a customer with multiple loans issued a single cheque. Consequently, the company faced operational inefficiency due to the manual and paper-based collection system.


Receipt books based on manual inputs resulted in errors like wrong agreement number, ineligible data and poor carbon copy impression quality. There was a perpetual risk of loss of manual receipts books. The impact of such a loss resulted in operational hassles.


RFL has a call centre team that supports the recoveries function. It also has a large field collection team, comprising field or sales personnel and collection managers, which is spread across more than 50 locations.

Kavi Arora, chief executive officer of RFL, said, “Religare Finvest Ltd is committed to making financing easier for SMEs through innovative, pioneering and industry-leading solutions.”


However, to do so, RFL realized it should invest in technologies that could solve these problems at all its 25 branches in major cities, and offer them a competitive advantage. The company began scouting for an automated and user-friendly approach to improve customer satisfaction. It also began looking for a technology partner who would ensure a smooth and efficient collections’ operation.


RFL approached Noida-based Nucleus Software to empower its critical business process. The IT services firm, on its part, recommended a mobility-based solution.


Nucleus Software’s FinnOne mCollect offers several features that have been designed to integrate with any base system. The application is compatible on Android, BlackBerry, Symbian and Windows platforms, and capable of working on devices like mobiles and tablets.


Ravi Pratap Singh, president and head of global product management at Nucleus Software, said, “Our partnership with Religare Finvest goes back to 2009, when Nucleus Software’s lending solutions were implemented for its retail loan operations. The implementation of the FinnOne mCollect solution was logically another step up in strengthening our partnership.”


The solution is targeted at field collectors, collection agencies and bank officials, and was considered to be the right fit for RFL. The mobile application interacts with RFL’s Base Central collection system in real time, using GPRS/Wi-Fi, and is also capable of running online application processes.


According to Sharad Agarwal, executive vice-president and head of operations and IT at RFL, the new mobile solution proved cost-effective, easy to use and has been implemented in a quick time frame, resulting in better customer experience.


For example, over the last six months, mCollect has seen over 90% penetration across RFL’s field collectors team with a collection of over 25,000 payments. In monetary terms, the per receipt cost came down to 30% of prior expenses. This product has also enabled a virtually paperless operation, thus eliminating the need for managing receipt books.


RFL noticed it could minimize human errors as the captured information can be edited. The correct, instantaneous receipts ensure accurate status of customer outstanding and transaction records, and help streamline collection operations.


Users now have access to an instant MIS (management information system) to track the cash collected and follow-up schedule. Chances of collection have increased significantly as queries raised by customers can be addressed instantly in contrast to earlier situations where such unresolved queries were leading to non-collection till they were resolved.


An 85% reduction in float money (Float is the amount that is collected by the outsourced field agents on behalf of RFL from its existing loan customers as equated monthly instalments. Till the money is in circulation with the field agent or collector on field and not deposited back to RFL partner bank branch, it is considered to be on float. Bad debts too are considered float money.) was also observed by RFL. By increasing control on float money, the risks involved have reduced dramatically. Finally, there was a marked increase in the level of customer satisfaction. “With all customer queries solved at their doorsteps, this solution ensures higher customer satisfaction,” said the IT team at RFL.


With services such as instant text messages and personalized email, customers have become not only more curious to know the latest information on their loans, but many of them also do not hesitate to pay in cash. “Streamlined operations, hassle-free collections and easy-to-use technology solutions have greatly empowered the RFL collection team,” the IT team concluded.


Investments in financial technology (fintech) in the Asia-Pacific region have grown fourfold in the first nine months of 2015 compared with the entire 2014, according to a report by global consultancy firm Accenture Plc. released in November 2015. Payments technology accounted for 40% of the total, while 25% was dedicated to lending.


“Today, financial services companies are waking up to the vast opportunities created by the current wave of fintech,” said Jon Allaway, senior managing director for financial services (Asean) at Accenture and executive sponsor of the FinTech Innovation Lab Asia-Pacific.


“Financial services institutions are embracing cloud, mobile and blockchain to fundamentally redefine their business and operational models. We are seeing this in the increased investments from banks in fintech venture capital funding, incubators and start-ups,” he added.