Credit Cards: How FinTech is Transforming the Loan Industry
Updated: Oct 17, 2022
India's economy is among the fastest-growing in the world, yet when compared to other industrialized countries, there is a considerable difference in access to formal finance. By offering new payment products and instruments that would make it simpler to get formal credit, banks and other financial institutions are striving to close this gap.
A survey claims that over the past four years, India has seen a considerable increase in the issuing of credit cards, with a compound annual growth rate (CAGR) of 20%.
Through the introduction of cutting-edge products and services to customers, new FinTech businesses have disrupted the market.
What is a credit card?
A credit card allows you to access a credit limit that's provided by your credit card issuer. Your credit limit determines how much money you can borrow in total. The card issuer allows you to use as much of the available credit as you like at any one time rather than handing you the whole loan amount in cash. You can keep borrowing as long as your balance does not exceed the credit limit and as long as you make the smallest monthly payment required by the issuer.
Fintechs Credit card:
With the assistance of their lending partner (which might be a bank or an NBFC), fintech credit card firms issue a credit limit and provide you with a prepaid card secured by that credit limit.
Therefore, in theory, you are receiving a prepaid card secured by a loan account that fintech companies have established in your name.
Even NBFCs may soon be able to issue credit cards thanks to the recent RBI circular.
To manage this loan service Fintechs requires a loan management system:
A computerized system known as loan management software automates every step of the advanced lifecycle, from application to closing. The conventional approach of managing loans was very time-consuming and involved gathering and confirming information regarding potential candidates' legitimacy and dependability. The engagement also includes determining loan fees and setting up installments. The Loan Management Software automates these procedures and offers loan officers and borrowers insightful analysis and experiences.
The ongoing digitization of organizations has set the stage for the growth of the loan management industry and necessitates administrative requirements that force financial institutions to upgrade the loan management software to handle expanding responsibilities and address administrative challenges.
Advantages of using a Fintech credit card:
The Fintech service providers will sign up online. They offer cards in virtual form with the bare minimum of documentation. Fintech cards' KYC is frequently completed online utilizing tools like DigiLocker, eKY, C, and video KYC.
You can instantly obtain a virtual Fintech credit card that can be used on online shopping sites.
Fintechs offer a wide variety of benefits and programs, including subscriptions and savings on services like food delivery, e-pharmacy, and educational technology.
If your physical card is lost or stolen, you can easily replace it with a virtual one.
Fintech has also been focused on providing interactive, easy-to-understand transaction statements.
Fintech companies are figuring out how to start and follow a dispute. Traditionally, phone centers or banks were used to resolve disputes.
Conclusion:
The clients of today are more familiar with the digital system. It enables associations to adapt to the needs of the new client generation. Organizations now have the potential to acquire more data most effectively to improve the working process thanks to technological innovation.
With SynoFin, providing credit card solutions needs is no longer a worrying point for businesses. The entire loan sanction process has become seamless with our credit card software. We provide you with unique features which make the lending process more efficient. Features that make us special are:
Truly integrated suite of products
Mobility app for Sales and Credit
New-age Loan management software
Delinquency management
Configure for Co-Lending
Web-based system for Operations and Credit
GL management in LMS
Web-based system for customers - Anchor/Spoke
Pre Integrated Accounting system
Why choose Synofin for Credit card Software service?
Customer onboarding
Buyer / Seller onboarding
Bill confirmation by Buyer / Seller
Invoice Verification
Limit Set up for Customer
Limit reduction on every bill payment
Limit renewal on repayment
Escrow Account Setup
tri-party agreement of Buyer, Seller & Lender
Visit SynoFin to learn more about us and to grow your business! Book a free demo today.