ONDC recently launched financial services on the platform. This rollout is an addition to the platform’s already diverse category of offerings that includes food, fashion, and mobility. While this is good news for all stakeholders involved, there’s much for BFSI players to piece together.

When onboarding on ONDC, there may be several questions that financial services players (including lenders) may have:

• Which category of players do financial services fall under on the platform?

• How are financial services on ONDC different from other offerings/e-commerce categories?

• What are the challenges that lenders and other institutions have on ONDC and how to solve them?

This blog answers all these questions and more—with a special focus on credit and lenders. Read on.

ONDC and Financial Services: An overview

The first phase of the financial services rollout includes credit, insurance, mutual funds, and ONDC-exclusive gift cards. Product offerings under ONDC so far are limited to  certain categories:

• Lending: Unsecured personal loans and GST data-powered MSME Seller Financing (for sole proprietors)

• Insurance: Motor, health, and marine insurance

Financial Services roles in ONDC 

As per ONDC, a financial institution can play any of the following roles on the platform:

• Buyer App: A front-facing service that sells products to end customers.

• Seller App: Any white-listed player who provides its service on a buyer app.Financial institutions looking to provide their services on ONDC-based platforms need to register as seller apps on ONDC. 

• Technology Service Provider (TSP) : Players who enable back-end technology for buyer and seller apps.

• Reconciliation Service Framework (RSF) : Players adhering to ONDC’s regulations to enable payment settlements within the platform.

Where do lenders stand in the equation?

Lenders (and any other financial institution) who’re looking to extend products to borrowers on any ONDC-listed platform (i.e., buyer apps) will need to register themselves as seller apps.

Is getting onboard ONDC for financial services more challenging?

While ONDC has provided specifications and guidelines for financial services on the platform, there are several industry-specific challenges that institutions may face, as compared to other e-commerce categories:

• Regulatory challenges: BFSI’s heavily regulated compliance requirements makes it more challenging for lenders and other financial services providers to get onboard the ONDC network

• Non-specific APIs: ONDC comes with standardised API protocols, some of which are industry agnostic. This places the onus of building a more robust and ONDC-compliant technology on the seller app. In the case of lending and other financial services, this can be time-consuming due to the complex nature of their native infrastructure.

A lenders’ guide to seller apps on ONDC 

If you’re a lender looking to offer credit products on ONDC, there are two parts to getting your tech ONDC-ready:

• Getting your lending infrastructure in order: A hygiene requirement to launching credit products on a new channel. It requires lenders to build a loan origination system that captures leads, allows seamless onboarding of customers, ensures smooth orchestration of all processes, and more. 

• Adapting to the ONDC ecosystem: This step requires lenders to complete the onboarding process on ONDC and then optimize their system to build a competitive business on the platform. 

Want a quick overview of how lenders can get on ONDC? Click here .

With expertise in building robust loan origination systems, FinBox can help banks and NBFCs build their infrastructure, onboard on ONDC as seller apps, and provide tools to optimise their business on the platform.

Here’s how we can help you get ONDC-ready:

Get your tech ducks in a row: 

FinBox can help lenders configure their systems to integrate with ONDC seamlessly. Here’s how we do it:

• Optimise lending stack: A high-performing LOS requires a seamless flow between the lenders’ native infrastructure like core banking system (CBS), customer relationship management (CRM), data management systems, and loan management systems. FinBox enables a fluid flow of these systems by connecting and orchestrating them through cutting-edge APIs and technology solutions.

• Enable a holistic underwriting module: FinBox helps lenders harness all the data on ONDC to provide a precise and holistic credit assessment system. Our suite of data products leverage GST data, account aggregator, alternate data, and credit bureau data to underwrite applicants for personal and business loans.  

• Integrate with third party vendors: FinBox seamlessly enables third-party integrations like Pennydrop, NACH, e-sign, and more.

• Orchestrate complex processes: We build configurable loan journeys, including all types of KYC workflows and other lender/product specific configurations

• Empower policy-building with a powerful BRE: With FinBox’s Sentinel BRE, lenders can automate, fine-tune, and simulate policies with ease and no tech intervention. 

Read more about how Sentinel can help optimise your ONDC strategy.  

Integrate and build your lending business on ONDC

FinBox’s ONDC stack is specially built for lenders. We have a ready-made onboarding template to onboard a lender on ONDC—in weeks, not months! 

Here’s how our onboarding process works: 

• Register as a seller app

• Get whitelisted: Once registered, FinBox helps you get your domain whitelisted on ONDC

• Development: FinBox then develops a set of ONDC-defined controllers and endpoints 

• Testing: Testing the connectivity between lenders’ systems on the ONDC on a sample app

Interested to know more about the specifics of getting onboard ONDC? Get in touch with us !