July, 2020: , India’s leading financial marketplace and free credit score provider with 100 Million visits per quarter, has announced that it has seen a strong uptick in contactless credit applications via Digital KYC. South India led the adoption with close to 41% of Digital KYC applications coming in from this region. City-wise, Delhi–NCR accounted for 21% of the total applications.
The ongoing pandemic has resulted in people severely restricting all physical interactions unless absolutely necessary. Many customers prefer using digital platforms over human contact for health and safety reasons, and this change in behaviour might persist and become the new normal. When it comes to credit cards and loans, there has been a strong demand for digital alternatives to physical processes, and people are increasingly opting for Digital-KYC-enabled banks and NBFCs. Adhil Shetty, CEO, BankBazaar, says: “As safety becomes paramount, financial institutions predict a 100% growth in digital lending by end of this year. We are seeing an early reflection of this on our site. With 50 million registered users from across India, we have a window into the Indian consumers’ financial habits, and the first impressions are fairly conclusive. The acceptance for contactless finance is gaining in leaps and bounds and early adopters of Digital KYC are benefiting.”
There is a pan-India increase in contactless applications and clear patterns are visible. The metros are more aggressively looking for credit compared to the non-metros, with almost 85% of Digital KYC applications coming in from the metros. The impact of COVID is also evident from the data. Overall, the South outperformed all the other parts of the country, contributing to 41% of the total applications. However, at a city-level, more than 21% of applications were from Delhi-NCR, followed by Hyderabad at 16% which remained in absolute lockdown for a much smaller period. Mumbai and suburbs as well as Chennai, which are still operating with tighter restrictions, were tepid with just 12% and 9% of applications respectively. Among the non-metros, the largest number of applications were from Coimbatore and Jaipur, followed by Lucknow and Indore.
The other impact of the pandemic has been the increased awareness of credit score among customers. As need for credit recovers post-COVID, a stellar credit score also becomes a necessity. Credit score awareness has been on the rise in last few years due to improved financial literacy, and BankBazaar saw a 111% increase in consumers checking their free credit score in FY20. However, due to the moratorium and the tightening lending norms in the wake of the pandemic, customers have started paying more attention to their credit scores.
Data provided by global leading information services company Experian shows an increase of 25% in June 2020 over May 2020 in the number of consumer enquiries for credit reports in India. In terms of geographical break-up, North has witnessed the highest enquiries at 31% followed by South at 28% and West at 22%. This is an encouraging sign as it indicates some form of economic recovery.
Commenting on the announcement, Sathya Kalyanasundaram, Country Head and Managing Director, Experian India, said, “COVID-19 will be a catalyst for digital transformation in the country. The implementation of contactless credit applications via Digital KYC will help customers get quick and easy access to credit. This will provide cost efficiencies around acquisition as well as automate decisioning for lenders. Our investment in BankBazaar.com has been with a vision to boost financial inclusion and empower consumers to take control of their credit reports. As customers move towards Digital KYC, information services firms like Experian will play a vital role in ensuring frictionless and faster access to credit. This initiative has come at an opportune time – consumers get timely and seamless access to credit while financial institutions are assured of identity verification and faster processing of loans.”
BankBazaar.com is India’s first neutral online marketplace that gives instant customized offers on loans and credit cards. It also provides free consumer credit score on its portal. Over 50 of India’s leading financial institutions have chosen to integrate themselves with the platform. BankBazaar has so far raised USD 116 M in funding from investors such as Experian, WSV, Eight Roads, Sequoia Capital, Walden International and Amazon.
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