Naveen Mangle, Senior Vice President – IT, Fusion Microfinance outlines how Fusion 2.0 is taking them to the next level.
What are the operating and business models of Fusion Microfinance?
Fusion Microfinance is a registered NBFC – MFI which operates in a Joint Liability Group lending model of Grameen. Our clients comprises of 100% women living in rural and semi-urban areas. Our focus is reaching out to unbanked and providing financial services to women entrepreneurs belonging to the economically and socially deprived section of the society. Our responsibilities are not restricted merely to financial support but also to acquaint the clients to manage their financials by disseminating Financial Literacy to them. Fusion aspires to create value and balanced growth for all its stakeholders while keeping clients at the centre.
What are your roles and responsibilities as the IT head of Fusion Microfinance?
Establishing a technology framework and blueprint that aims at building an ecosystem which is helping in transcending Fusion to the next level. Internally, we call it Fusion 2.0. As a part of Fusion 2.0, our primary focus is to provide the customer best experience and simultaneously ensure best resources, infrastructure and digital systems to improve productivity and scalability. Some of focus areas we have are digital transformation, Automation (RPA), Leveraging AI and ML and Data Analytics.
What all digital technologies have been deployed at Fusion Microfinance and what are their technology use cases?
As a part of digital transformation, the first and foremost technology we have adopted is complete mobility solution, a mobile phone based app which is a one-stop end to end solution assisting our sales force team. They perform real time activities such as customer on-boarding, Credit Bureau check, Digital Collections and so on. Secondly, we have fully adopted the cloud infrastructure. All our applications (internal and customer facing) are hosted on the cloud, this has resulted in better scalability and improved performance.
What all are the analytics and AI technologies being deployed at Fusion Microfinance and what are their business use cases?
We are leveraging AI/ML, specifically image processing algorithms for profiling and segmentation of our customer base. There are plans to use it for authentication and authorisation, clubbed with KYC for disbursement and collections. Some work is being done for building models for fraud detection, and creating customer score cards. This will help us for better decision making. We are also doing POC for implementing Robotic Process Automation (RPA) to enhance our internal productivity and efficiency. With regards to Data Analytics, there is roadmap to achieve complete analytics (descriptive as well as prescriptive) but starting with business intelligence to begin with.
How are these digital technologies help Fusion Microfinance function in these times of the pandemic?
First, it helped us in enhancing customer experience. The digital technology was evident in maintaining continuous touch with our customers during pandemic. Our sales force and contact centre was proactive in educating the clients and addressing their concerns. Whether it is capturing digital consent or digital collections, digital technology has played a pivotal role in pandemic times. Secondly, cloud adoption has helped us working from home without any disruption.
How has Fusion Microfinance personalized interactions and reduced response time with customers? How has this translated into a revenue generator for the company?
Being into microfinance industry, our customers base are more in rural and semi-urban areas which is why personal interactions becomes our need.
As we are already into sales assisted model, we make them educated and with constant touch we get to know their additional needs, which helps us in offering cross sell products.
How can AI and analytics help Fusion Microfinance in the likely scenario of increasing liquidity crunch and increasing NPAs during the situation evolving out of this pandemic?
We have been following highest governance standards and our past record indicates our ability to emerge out stronger from crisis situation (demonetization). Thanks to our lenders for the continuous support and faith they have shown upon us during pandemic. For better managing NPA’s we are leveraging AI & data analytics to build forecasting models based upon behavioral patterns of our customers.
How critical it is to map customer behaviour patterns using analytics at this juncture when the government has offered loan moratoriums?
This also comes as a challenge to us, but, our constant touch with customers overcame this as we make them educated regarding loan moratorium and it’s interest issues. Many of our customers have re-paid their loan instalment in time. However, we still feel important to observe the customer behaviour pattern using analytics and for that matter, we are building several AI/ML forecasting models.
How would you differentiate Fusion Microfinance’s application of IT from other financial service providers?
Our overall approach is more of strategic rather than tactical. We have spent good time in understanding customer needs and business expectations. Accordingly, the IT strategy has been prepared keeping in mind short term and long term needs. We are building up the right infrastructure, technology and resources to achieve this vision now. For e.g. scalability, performance, enhanced customer experience, digital transformation are some of the key areas we are focusing on.
As a premier data scientist and an AI evangelist, what are your views on the salient features in the National Strategy for Artificial Intelligence?
As a national strategy for Artificial Intelligence, factors specific to building a smart city, innovation in healthcare and agriculture is going to be a major breakthrough if implemented at national level.
With AI, we can outreach and provide best of the best AI driven services in rural segment like in urban and that too with less workforce. Being into BFSI domain, I would specifically mention the aspects around Financial Inclusion in National Strategy. Traditional models limits financial providers to serve urban population or segment that has a previous credit history. Often, the bureau outputs are more of Boolean value. However using AI, organizations can leverage many different aspects of customer behaviour and can have varied credit parameters based on their internal risk profiling. I am quite confident that AI has a long way to go in enabling Financial inclusion in a diverse country like India.
How can AI become a further disruptor in the BFSI sector?
In addition to current dominance of AI in understanding customer needs, reporting, recommendations that drives customer acquisition, retention and increased revenue, it is going to play critical role in addressing the ever demanding needs in maintaining regulatory compliance and cyber security.