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How Digitization Can Transform Small-Business Lending | Vineet Tyagi

Vineet Tyagi | Global CTO & Country Head | Biz2Credit India explains especially with his successes with American SMBs.

What is the operating business model of Biz2Credit and how all does technology drive this business?

We have two businesses and they are connected with each other. Our first business is Biz2Credit, by which we operate in the North American market, US to be specific, where we are a digital lender, like an NBFC in India enabling through digital means, the access to credit and capital for small businesses. We have been doing this for the last 8- 10 years. We are recognized as the number one source for easy and digital access to capital by a lot of SME customers in the United States. We have built a lot of technology enablement where we have the whole platform that allows us to digitally originate customers for them to upload, all their documents, perform KYC, KYB, do the underwriting, collect all types of data and then give them the money and then service the loans, and manage those loans.

In case there are any issues in repayment, either legal or the collection aspects of collecting back on defaults, we have built up tech which is digital from end to end and white label and license this technology to a large number of global banks. These banks use our expertise in data driven models, which is called Biz2X to digitize their lending operations. The next stage of our evolution, which we are undergoing today, is transforming this into a fully digital banking experience.

What are the solutions and services in the Biz2Credit portfolio?

Banks are still struggling with the fact that their back offices are not very digital. It takes days and weeks to even assess a customer and give them loans. So what we are really having in our portfolio is a full digitization suite of applications right from the origination, from the digital application, the underwriting module, the workflow modules that are needed to enable these kinds of journeys. We also have the digital back-end. We are also having capabilities and offerings for the liability side. This includes account opening, credit cards of your current and personal accounts, retail portfolio.

What are the key technology solutions used by Biz2Credit and what are their use cases? 

We use a lot of artificial intelligence techniques, machine learning to understand and create efficiency. For example, we use machine learning algorithms to look at the past historical bank statements of businesses and in real time produce a kind of a P&L statement for the bank. We are able to determine the revenue expenses and what type of expenses the business may be having and that allows us to really assess automatically the financial health of a business and take quick credit decisions.

We have been a big user of cloud technologies, as well as micro services driven architecture and that allows us to create system components which can be individually replaced in scale. We use the mean stack, a mix of different technologies like Python and from a language perspective, we also use a little bit of Java, C++. The tech stack has bank grade security. A lot of the big global banks have audited us in their compliance and their security divisions have certified that it meets their requirements.

What are your differentiator from other lending players?

We have one of the lowest loss rates in the industry, and that has allowed us to help our customers deal with their tough times that the COVID situation is bringing.We have the agility to respond to the changing needs of our customers in a matter of days. For example, the US government brought out paycheck prediction program where Biz2Credit within a matter of 7- 10 days was able to provide systems to our customer that can help them digitally apply and get those government support loans to keep their businesses running.

How are you helping out SMBs severely impacted by the pandemic?

We are helping understand them better, which are the impacted areas, how are they getting impacted and helping them get access to tools, knowledge or access to capital or credit. We are helping them know there are certain government programs and how they can get access to them, and connect to different kind of things. In a direct lending business, we are helping them by providing the moratorium, the support needed and also helping them with data and insight using our machine learning and AI capabilities to look at the overall conditions. This allows us to give them insights into their industries what is working, what is not working, what areas they can focus on and what areas may be the new business opportunities, which are coming up.

How does digitization of the lending process benefit SMBs and smaller entrepreneurs?

Digitization will help them getting connected to lenders better. They can describe their need. They can provide the documentation that the lender may need from a regulatory and compliance perspective to create the fulfillment of the opportunity that these small businesses are looking for. There are newer forms of support that we are enabling today, like in terms of insights, knowledge about what to do, how to handle some of that businesses. Those kinds of things are also becoming very important tools.

What are the advantages of your technology partnerships with the likes of AWS and Sage?

Partnership is a way to grow and also give most value to our customers. We alone cannot be the provider of all the solutions and all the value to our customers.

You are always looking at a network or a platform where different providers can come together to form a stronger kind of a coalition of partnerships to demonstrate and give a stronger value proposition to businesses.

We have a very strategic tie-up with AWS where we use the Amazon Cloud. We run on Amazon Cloud. We use the Amazon Cloud to deliver bank grade secure solutions where people feel comfortable, small businesses feel comfortable,digitally uploading and sharing their financial data, and their personal data. Sage and our other partners help us connect with these customers. As a smaller business, I may need Sage to provide me the accounting services, the accounting software, and they may need Biz2Credit to provide you the access to capital and different knowledge and tools.So everybody coming together can help you provide customers a one stop shop.

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