In recent years, artificial intelligence has emerged as a game-changer across various industries, with the financial sector experiencing significant benefits. Non-Banking Financial Companies (NBFCs) have harnessed the power of AI to streamline their operations, cut down on costs, and offer more tailored services to their customers.
Turning to VP Nandakumar, Managing Director of Manappuram Finance, we gain insight into how this technological shift is shaping the NBFC landscape.
According to Nandakumar, embracing AI is not just about keeping up with trends it’s about ensuring that Manappuram Finance remains at the forefront of innovation, providing timely and hassle-free financial solutions in an evolving market.
India’s non-banking financial companies are quietly undergoing a significant shift, thanks to the adoption of advanced technologies. These institutions are increasingly turning to artificial intelligence and digital tools to streamline their operations and reach new customer segments.
By using data-driven approaches, NBFCs are able to assess loan applicants who might not have a traditional credit history, opening up lending to a much broader section of society. The use of mobile technology is making it easier for people in both cities and remote areas to access financial services, from submitting applications to receiving funds, all through digital means.
“There are companies that have gone extinct just because they were not able to pivot at the right time. Including AI in operations has become a no-brainer. We, at Manappuram, have steadily adopted new tech and will continue to do so.” Says VP Nandakumar.
Automation has reduced the need for manual paperwork, making processes faster and more reliable. Some companies are also exploring secure ways to handle transactions and data, ensuring that customer information remains protected.
Collaboration with technology firms and fintech startups is helping NBFCs stay ahead of the curve, introducing chat-based customer support and voice-enabled services that simplify the borrowing experience.
“These changes are not just about keeping up with trends they are about making finance more accessible, efficient, and responsive to the needs of a rapidly changing market.” Feels VP Nandakumar. As a result, NBFCs in India are becoming more nimble and better equipped to serve a diverse and growing customer base.
However, when it comes to financial entities and their collaboration with new tech, there are a few hurdles as well.
Financial institutions like NBFCs carry a serious responsibility when it comes to handling customer documents and personal information. With the increasing digitization of financial services, ensuring the safety and privacy of sensitive data has become a core priority. Regulatory frameworks in India, including the Reserve Bank of India’s cybersecurity guidelines and the Digital Personal Data Protection (DPDP) Act, require NBFCs to use strong safeguards such as encryption, data masking, and strict access controls to keep customer information secure. These measures are not just about compliance; they are essential for building trust with customers, who expect their private details to be protected from unauthorized access or misuse.
VP Nandakumar opines, “It is important we don’t adopt any new tech blindly without having safeguards around it. NBFCs have a duty towards their customers who trust them with their most valuable thing—their privacy.”
Institutions must also be vigilant against cyber threats and fraud, using advanced detection systems and real-time monitoring to quickly identify and respond to suspicious activities.
Consent management is another crucial aspect—NBFCs are expected to obtain clear and informed consent before collecting or processing any personal data, and customers should have the option to review or withdraw this consent at any time.
“Beyond technology, NBFCs need to foster a culture of privacy by training staff, regularly updating policies, and maintaining clear communication with clients about how their data is used and protected.” States VP Nandakumar.
Ultimately, safeguarding documentation and personal privacy is not just a regulatory requirement—it’s a fundamental part of earning and keeping the confidence of every individual who entrusts their financial information to these institutions.
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