Who hasn't heard "Data is the new oil"? While we agree it is, in the labyrinth of digital lending, it is not about oil but having the right refinery to turn this oil into rocket fuel. Digital loans in India saw a 49% increase in disbursement, totaling Rs 1.46 trillion (approximately USD 17.5 billion) for the financial year 2023-24. The number of loans disbursed also rose by 35%, exceeding 10 crore loans (100 million) during the same period. India is evidently at the cusp of witnessing a lending boom bigger than ever.  

However, this massive opportunity for the lending landscape comes with its challenges. To start with, there is a high delinquency rate. The root of this problem does not lie in the collection's channels but in the intelligence engine (or the lack of it!) behind it. 

Digital processes like loan monitoring, customer segmentation, and communication are being developed and improved to enhance digital lenders' debt recovery efforts. However, these can only be effective if built on credible data. This is why a framework like Account Aggregator can be a game changer for lenders and potentially rewrite lending rules. 

The Great Data Revolution 

Lenders today sit on massive data mines. However, this data is only useful if churned out to study borrower behavior and creditworthiness with precision. The success of digital lending hinges on understanding these credit behaviors. The AA framework opens unprecedented access to the rich financial data stream, which, when properly used, can transform lending decisions.  With FinBox AA-based Customer Data Platforms (CDP) , we are revolutionizing how digital lenders approach understanding customer behavior and risk assessment. Let's explore how lenders can build a robust insights engine leveraging this powerful combination.

Why AA Needs CDP: The Perfect Marriage 

CDP combined with Account Aggregator data can combine financial data such as bank accounts, fixed deposits, recurring deposits, mutual funds, equity, and loans into one profile for personal loan underwriting. Imagine a grand orchestra where each musician plays their part perfectly but in isolation. That's what most lenders' data looks like today - beautiful individual pieces that never quite come together as a symphony. The AA framework brings all these musicians to the same stage, but the CDP becomes the conductor, turning isolated notes into a masterpiece.

When AA data flows into a CDP, something remarkable happens:   

• Transaction patterns become customer stories  

• Bank statements transform into behavior predictions  

• Financial decisions reveal lifestyle choices  

• Credit histories evolve into opportunity maps  

• And we evolve something new - The Art of Customer Understanding 2.0  

The data collated by the lender is highly relevant for two primary reasons: first, it is useful for sizing your loan or cross-selling product offers. Second, it is the perfect time to communicate these offers. 

From Static to Dynamic Profiles  

Traditional approach: Customer A has Rs. 50,000 in monthly income   CDP-enhanced view: Customer A's income has grown 20% annually. They spent heavily on electronics in December and, based on their savings patterns, are likely planning a home purchase.   

From Reactive to Predictive  

Traditional approach: Customer B missed their EMI.   

CDP-enhance view: Customer B's spending pattern suggests potential payment stress in 2 months.  AA fed into CDP results in inclusive and credible credit disbursement for gig workers, SMEs, and MSMEs. Let's look at a few more examples. 

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The SME & MSME Revolution  

A small Kirana store owner applies for a loan. Traditional data shows irregular bank deposits. But when AA feeds into CDP:  

• QR payment patterns reveal steady daily income  

• Supplier payment history shows business discipline  

• Seasonal variations indicate business acumen. 

Result? A merchant who might have been rejected becomes a coveted customer. 

The Gig Economy Worker 

Traditional systems struggle with variable incomes. But when AA meets CDP, it becomes possible to deepen financial inclusion for India's growing gig workforce; here's how:  

• Multiple income streams are automatically aggregated  

• Peak earning periods are identified  

• Credit capacity is dynamically adjusted to the Result.   

Explore FinBox AA CDP's Next-Gen Insights Engine 

FinBox CDP combined with AA data can merge financial data like bank accounts, loans, and investments into one profile. For example, suppose a customer's AA data shows a significant drop in the average bank account balance, a sudden increase in credit card usage, and new loans from other lenders. In that case, this will trigger an early warning signal for loan default prevention, unlike payment stress, which is discovered only after an EMI bounces traditionally.  FinBox CDP offers a unified solution that's powered through AA with meaningful capabilities to boost revenue engagement and reduce customer churn:  

• Omni-channel data collection across touchpoints  

• High-quality data integrations  

• Accurate profile unification  

• Custom audience segmentation  

• Advanced data controls  

• Raw data access  

Example of How FinBox CDP Can Help Lenders in Real-time  BNPL Lender: Credit Line Optimization   

Before: Static credit limits are based on proof of income—missing opportunities with creditworthy customers.   After: Dynamic limit adjustment triggers:  

• Consistent repayment history over 6 months  

• Increase in monthly income  

• Reduction in other loan obligations  

Impact: Massive increase in credit utilization among good customers  

The Last Word 

In the high-stakes game of digital lending, having access to data through AA is just your entry ticket. What you do with that data determines whether you play in the minor leagues or the World Series. CDP isn't just another piece of technology - it's your playbook for turning raw financial data into lending success stories.  

Remember: In tomorrow's lending landscape, the winners won't just be those who have the most data but those who can turn that data into the most intelligent decisions. AA gives you the ingredients, but CDP gives you the recipe for success—time to turn your data refinery into a rocket fuel factory. The future of lending is here - and it's smarter than ever.  Want to learn more? Sign up here for a demo.