Digital platforms are increasingly becoming the face of financial services — thanks to the rise of embedded finance . And embedded credit, particularly, is a highly sought-after goal of most digital platforms as it helps boost average order values, generate additional revenue streams, and bake in customer stickiness. 

The benefits of embedded credit are hard to resist, and that’s exactly why platforms are embracing the role of loan originators. However, final approval and disbursals are still at the mercy of lending partners. 

He who fails to plan, plans to fail

To reduce dependency on one lender, it’s advisable for platforms to work with a diverse network of lenders . Such a strategy ensures that end consumers get the best loan offers and have a high probability of getting approved. However, this is only the first step to being the loan distributor of choice. 

Let’s imagine two scenarios;

1. One of the lending partners — a small-sized lender — faces a capital crunch, and thereby chooses to freeze disbursals for some time.

1. Another lending partner experiences operational issues that lead to delay in disbursals — jeopardising the platform’s monthly disbursements target. 

Now, in either of these cases, platforms will have customers who may be at different points in their application process — some may have just completed their KYC while others may have completed the final e-sign step. 

In this case, the platform can either announce a downtime or refuse new applications till the lender operations are fixed. 

However, if they have lender partnerships with more than one lender, they can simply redirect new applications to the fresh lender, enabling a seamless and hassle-free experience for the end consumer. 

Kill two birds with one stone

It is in situations like this, that the latent value of technology partnerships shine through. A lot of platforms come to us at FinBox, with the mandate of building the rails for digital credit. But in actuality, the value from such a partnership goes far beyond the original mandate. 

At FinBox, along with enabling digital credit, end-to-end, we give platforms access to a diverse lender network. How? Once a platform integrates with FinBox, our LMS Bridge connects them to an ever-growing lender ecosystem, saving the platform from multiple integrations with every new lender. 

When lending partnerships snap, we ensure operational and business continuity for our platform partners. In case of a scenario such as either of the two discussed earlier, we help the platform migrate its users from the current lender to another lender in our network, in a move that’s as simple as pulling a lever.

Setting new benchmarks for Recovery Time Objective

Migrating seamlessly, without glitches, is only one part of the problem. The big question is how quickly can a platform  recover from partnership setbacks. Recovery time is surprisingly close to nothing. All it takes is a couple of API calls to be back in business. 

Here are some measures that would help ensure such resilience:

1. Have a checklist ready as to what information the new lender need

2. While designing user journeys, make sure you are collecting the right set of data from the very start, so that you don’t have to go back to the customer for additional information

3. In case of bulk migration, one must be mindful of not overloading the new lender's Loan Origination System. At FinBox, we gradually move the customers using a script if volume is high. 

To understand the full potential of partnership with FinBox, right from credit infrastructure and risk intelligence to baking in scalability, agility, and resilience as features of digital lending , get in touch with us .