Financial services

At times, digitalization provokes adverse speculations, especially when it's related to finance. A similar scenario can be seen in digital lending. Challenges like security, speed, and reliability have always been under the radar in digital lending. But do you know, in the fiscal year 2023-24, disbursements surged by 49% to ₹1.46 lakh crore, with over 10 crore loans issued—a 35% increase from the previous year. (resources). If digital lending platforms have witnessed an extreme boom, then how do they balance the clash of speed vs security? In fact, how are advanced digital lending solutions for NBFCs stimulating NBFC digital transformation, ensuring that they maintain a balance of speed and security? Undoubtedly, both factors are essential; however, finding stability between both is equally crucial as well. But do you know that some of the best digital lending platforms, like Lendmantra, have successfully cracked the code behind secure yet speedy digital lending by utilizing AI-powered lending software. Wondering how? Well, that’s the secret we will explore in this blog! Speed Vs Security: How The Clash Started? The rapid adoption of UPI, Aadhaar-enabled KYC, and mobile-first interfaces has simplified access, but it’s also increased pressure on platforms to deliver instant, secure lending experiences. Now, borrowers don't want to wait! The demand for immediate loan access has also surged a need for better digital lending solutions for NBFCs with certain features like quick loan access with ensured security and digital onboarding. Platforms that successfully accomplish such users’ demands are rewarded with their loyalty and long-term investment. Observing this excessive scope and demand, multiple platforms performed digital onboarding for people seeking immediate lending solutions. Where such platforms met users' lending emergencies, somewhere the cyber risk was brewing undercover. While millions of users invested in digital lending platforms, they forgot that convenience comes at a certain cost, which can be cyber risk, privacy breaches, and noncompliance. Now this is where the battle to provide speed while offering security started. While both are important, still one should not be compromised for the other. Why is Speed and Security Necessary Simultaneously? Lending businesses eventually formed a balance between speed and security to ensure that digital onboarding remains smooth and constant. However, before unveiling how it happened, let’s learn why having them together is important for any digital lending platform. Speed: The New Definition of Convenience For new borrowers, especially small business owners, quick loan approval can be a game-changer. Despite any situation, quick lending and money credit can help borrowers bridge the financial gaps immediately. To add this ease into the borrower's life, multiple digital lenders incorporated automation, AI-based borrower evaluation, and pre-set borrower limits. Where this process helps minimize turnaround time, its rapid pace might sacrifice manual checks, rigorous authentication, and scam tracking. The competition among fast digital lending platforms is so high that they might bypass essential security frameworks and which is a red flag. Security: A Cost for Quick Lending: Cyber threats in the financial industry are growing exponentially. In the first half of 2024, India experienced 135,173 financial phishing attacks, marking a 175% increase compared to the same period in the previous year. (resources) As digital lending has seen a significant rise, the increasing numbers are equally chasing digital frauds, data leaks, and API exploitations. With the increased number of digital lending platforms, your personal information has become vulnerable to cyber attacks, however, this is subject to certain conditions only. Also, for lenders, a single breach of lending compliance can cause considerable long-term damage, reputational harm, penalties, or more. Do not forget, in today’s well-evolved businesses, security doesn't just work as an IT factor; in fact, it positions your brand for your target audience. One mistake can ruin it all, for you or your customers. The Importance of Speed vs Security Balance And How To Ensure You Have One? Speed and security perform their own role. But if done the right way, they can coexist to protect platform integrity and enhance user experience. One can ensure balancing speed vs security by incorporating automation with guardrails, layered verification, zero trust architecture, user education, and compliance-first design. In fact, below are some security-centric innovations that enabled speed and allowed financial companies (NBFC) to strike a balance between speed vs security in their cloud-based lending platforms. Biometric Identity Verification: The traditional way of user verification, such as OTP or any particular password, no longer works. Hence, to deal with modern scams, NBFC digital transformation led to relying on biometric identity verification such as fingerprint authentication or face recognition. This helps them to ensure that the one who is applying for a loan is actually the borrower and not a fraud. Along with a speedy lending process, it also keeps the digital lending platform's security intact. Document Proofing with AI: AI document proofing helps AI-powered lending software ensure accurate verification of ID proofs, mismatched data, and fraudulent attempts or tampered content. As AI does all these approval tasks vigilantly, it accelerates the process of building customer relationships, but also reduces the manual workforce. EKYC & Device Reputation Scoring : Digital onboarding KYC/ eKYC, and fingerprints are two of the potential features that help cloud-based lending platforms verify the person and his/her device. The Device reputation scoring analyzes the required data, such as the user’s search pattern, IP behaviour, geolocation, and other required details. This protects a financial company (NBFC) from any fraudulent activity and allows quick digital onboarding of the borrowers. Digital & Physical Card Issuance: Since digital lending is in trend, multiple digital lending platforms offer Buy Now, Pay Later (BNPL) credit cards or prepaid options to users. This facilitates users with digital card payments and in-store card payments. This has fastened the lending process, and to ensure it is done securely, companies use technologies like data encryption, secure API, and others. Supports Regulatory Compliance: Keep speeding your digital onboarding, don't stick to regulatory compliance, and watch a disaster happen. That's the cost that digital lending platforms would pay if they don't embed compliance checks with Data Protection Laws (DPDP Act), RBI Guidelines, Digital lending guidelines, and Anti-Money Laundering (AML) norms. Adhering to compliance not only protects you against any illegal action but also builds credibility in the market and among users. Incorporating more sophisticated tech and improved customer-centric services has helped digital lending platforms evolve like never before. They are now not just offering a platform but dedicated solutions such as a loan origination system (LOS) and a loan management system (LMS) to add value like never before. With this, the balanced amalgamation of speed and security has helped companies like Lendmantra deliver exceptional tech-featured solutions, enabling NBFC digital transformation, allowing them to build unshakable customer relationships. The End: Balance It Smartly with LendMantra The balance we are talking about: speed would let you through the door, but security would keep the doors open. Understand the rapidly evolving industry of digital lending. Where NBFCs are making smart moves to ensure speed and security, you're lagging behind won't justify your existence in the market. In fact, to stay ahead of the curve, speculate gaps, bridge them with smart tech installation in your digital lending platform, and crack the market. Above all of this, you need a partner who understands your unique requirements and how you want to cater to your users. To serve in this, Lendmantra is at your rescue. From AI-based credit scoring to automated workflows and mobile-first design, you name it, and we will do it for you! Still confused, let’s connect and explore how. FAQs:

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Financial services

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