Digital Revolution: One of the User Story

 Date: 20-Jan-2021

Digital Revolution: One of the User Story

From past few years, Financial system is going towards digital platform. Now most of the things are available on digital platform and with lot of security. One can open the bank account instantly in 5 - 10 min, in any bank in India, one can have instant education loan (Early salary platform), opening Demat and Trading account with Dealer and / or broker (Upstox, Zarodha, IIFL etc.) etc. 

The Financial Institutions have invested lot of funds and time to develop this platform, so that they can reach to the target audience with minimal human effort. The Client Onboarding Process has become very easy and cost effective as well. 

Recently I came across some sort of issues, which I believe the most of you have also faced and need remedies on the same. Client Onboarding Process taking very less time (From 1- 5 days to now 5- 10 min), but what about Client De-boarding Process, still it require lot of effort to make them easy and less cumbersome process. I would like to share you few of them, so that the readers get some idea on that and ask Financial Institution such question before having any relationship.

One of the User Story:

“Loan Disbursement take few min, whereas Pre-closure of Loan takes more that a day or two.”

One of my friend was in urgent need of funds and he used Bank Credit card to take out the loan on the Credit Card Limit. To take out the loan from the Limit assigned to the credit card, it was very simple process and do have robust security features. RM called the friend and ask for the Loan amount, duration and based on that, RM informed the EMI amount, process etc.

My friend told RM, please go ahead. Based on his confirmation, he has processed the Loan disbursement, within a 20 minutes. He was happy with the instant fund transfer facility under the Loan account. Usually it take 5 to 10 days for such kind of loan. 

After few month of loan repayment, My friend wanted to close the Loan account and approached the RM for the same. Here is the twist. 

RM said, "Sir you need to visit near by branch with the pre-closure of the Loan application and plus the pre-closure charges amount". My friend was bit confused and asked to RM "Is there any facility from where I can close the account online without visiting the branch". 

RM said "No sir, there is not such option available, you need to visit the Loan servicing branch near by your location in Mumbai". My friend has not accepted this process and told RM to connect with the higher management. The higher management told the same thing. My friend told them, I can do the fund transfer to the Loan account using NEFT/RTGS via net banking option, you do the rest processing and close the account. But Bank employee refused the option and said there is no such option available sir. This has more than one month to get only the information and did not got any solution to this.

Also one more point I came to know here is that, they do not provide the loan agreement copy to the customer, which contains the terms and condition of the Loan, which is the biggest drawback of this facility.

With the above incident, I believe you got the IDEA, where is the loop hole. In the above scenario, the FI or Bank should know that, this is not going to work out if you want in the market and serve the customer.

The Organization needs to come-up with the solution where they should handle such situation, so that client should not face any challenges and last minute surprises, while de-boarding. This is one example, and I am sure, you can get more such use cases in your life, while dealing in this Digital ear.

Few more points I would like to mention, they are,

World is the Market: Previously companies was struggling to tap certain market for selling or servicing the particular market, due to restriction and less understanding of the other market. Due to Digital Technology, things have been changed. Now World has become the market where company can have access to the required market based on their capabilities.

Acquiring customer: Because of this Digital Technologies, companies can acquire customer very quickly. Customer can also get influenced with such fast track fulfilment of the requirement and easily get attracted to this.

Exposure: Another point is the Exposure to the larger segment of the market, from both front. From Financial Institution side as well as from Customer side. FI can use this to build huge customer base, have good market share, built world class infrastructure to support the expansion etc. Whereas Customer have choices, opportunity cost benefits, easy availability of the required things, less cumbersome process and documents etc.

Human Touch: Also due to this Digital banking revolution, one thing is for sure, we are going to lose the personal touch and relationship building process, which as a Indian I believe is important.