Level up your lending game with SMS Analytics
Today, the fintech industry is pushing the agenda of digitization and tracing the digital footprints of customers who are applying for loans. The newer forms of credit rating include supervising and analyzing their financial behaviors which help to understand the customer’s psychological and financial parameters.
More and more digital lenders are using SMS analytics because it’s better than traditional data sets (bank statement and CIBIL report) and does not require prior credit history. Typically, it has been seen that companies capture data from diverse sources that are often raw and unstructured in nature. It comes as a challenge for companies to process and translate such high volumes of data into something meaningful.
SMS analytics is being identified as a growing and evolving data processing tool that helps in converting voluminous data into quantitative insights. It enables lenders to assess and provide insights related to credits and loans to manage contracts and assists in managing assets and build reports.
Pirimid has helped many lenders to build a customized SMS analytics solution which caters to their businesses and helps them get a better hold on their borrower. On that note, let’s understand how SMS Analytics solutions are helpful to you.
SMS Analytics use-cases in BFSI space
Lending Decisions: Some of the signals which are captured by the SMS Analytics tool include salary information, employer information, running EMI’s, credit card usage, and much more. SMS Analytics tool is used in providing real-time lending decisions and approvals by integrating bank systems. This digital technology has helped identify the gaps between the present lending value chain and technology which has streamlined the credit management process to bring out a more efficient form of lending
Early Warning Signal: With the help of SMS early warning systems, the lenders will not only profit from reduced operational costs but also benefit from early alerts and warnings regarding their customer’s data behavioural patterns that might be of concern to them.
Cross-Selling: SMS Analytics provides a smart insight into measuring the effectiveness of cross-selling and upselling in real-time. Advanced customer SMS analytics when integrated with marketing tools helps lenders get greater insights into their customers using the existing technology stacks.
What Outputs Can Be Generated From SMS Analytics?
Track Financial Behaviour & Credit Score Documentation: An SMS Analytics tool helps lenders analyze their customer’s income level, spending pattern, recurring expenses, EMI transactions default in payments if any, and other financial behavioural patterns which help them assess the creditworthiness of the borrower. The SMS analytics tool creates a report based on the information generated and helps you assess the credit score of your customer. This also helps businesses to ascertain the correct interest rate to charge to their customers based on their credit score. The higher the credit score, the lower the interest. It’s a win-win situation for both the parties involved in this transaction.
Record Customer Use Cases: Working with a competitive SMS analytics tool helps you determine the financial and transactional behaviour of your customer. Right from their borrowing and lending patterns to the time taken to repay a particular credit helps the financial institution eliminate the chances of default payments and increase their profits by eradicating any chances of red flags by identifying the trends, patterns, and insights of the customer.
Lifestyle: SMS analytics help lenders identify the lifestyle of the customer in question. Right from identifying his spending pattern, his health consciousness, and other such spending behaviourism, SMS analytics helps in providing a deep insight into a person’s lifestyle. Minute details that help SMS analytics get better insights include the person’s eating habits, spending habits, and even can track the nature of transactions (gambling or planned) made by this person.
Red Flags: SMS analytics can help lenders to identify red flags and take required action on the same. Right from changing location, abnormal expense/ income, transaction not in sync with other sources – CIBIL and bank statement, SMS analytics helps lenders in identifying such patterns and have an edge as far as decision making is concerned.
Challenges in SMS analytics
Right from basic actions like registering a new user to facilitating a transaction by acting as a catalyst – SMSes play a very important role in the fintech space. So, when we are already aware of how important and basic the involvement of SMSes is in our daily life, one needs to know how using an SMS Analytics tool can solve recurring challenges by turning every hurdle into an opportunity.
Fake SMSes: It is not unknown that many people use fake SMSes to conduct certain phishing or fraudulent activities by acting as the bank. This is where SMS analytics tools come in as a saviour. With the help of these tools, many businesses have been able to win over fake SMSes and are free of any compromise of their information. There have been instances where people have created fake income or investment SMS just to get a better score in analytics. This was done so that the overall credit score is high. However, with SMS analytics, these patterns can be identified and eliminated once and for all through identifying the confidence scores by triangulating data.
Duplication: There have been many cases where people have rooted their devices and applied for multiple loan applications under different names through the same phone. These things have now been eliminated with the help of SMS analytics solutions and have facilitated a trustworthy channel of transactional communication between the customer and its financial institution.
Incorrect ID: Many cases have witnessed people using incorrect IDs to avail loans. Let’s say a fraudster uses someone’s ID with a good credit score to avail loan. Such frauds can be solved by SMS analytics. Here we are actually using the SMS data of someone else to get a better result.
The Bottomline
Lenders have started using SMS data for better conversion and pricing. This has increased the customer loyalty and relationship in turn, resulting in better pricing, better conversions and giving customers access to instant loans due to better trust and pricing factors. SMS Analytics has made this possible even though CIBIL records are not available.
If you are looking to get attention, having turnaround times with turtle speed won’t fetch you so. Every player in the lending space is turning digital and those who are stuck to manuals will fall way behind the competition if they don’t gear up. SMS Analytics solution helps lenders hit volume targets, increase profits, save time & cost along with eliminating risks. The new backbone of the lending space is here, when do you plan to switch?