By Ashutosh Prakash Singh, Co-Founder and CEO at RevRag.AI
People may not know what to do when they apply for a loan for the first time. When customers open a banking app, they are greeted by a lot of paperwork, numbers, and disclaimers. The Relationship Manager (RM), who used to help clients with these things, is not always available when you need them. Customers do not always have the time or knowledge to understand the terms, interest rates, and hidden fees of a loan. But banks want them to do the right thing. Technology can help fill this gap, but only if it is made with care.
The story of India’s digital finance has been incredible. In the last six years, there have been more than ₹12,00,000 crore in digital transactions, with more than ₹65,000 crore happening each year. India is the best country in the world for fast payments. UPI alone handles more than 18 billion transactions every month. Every day, millions of people use UPI to buy groceries or send money to their families. But the digital route often fails when it comes to things like loans that need more thought.
Banks and fintechs are turning to AI to solve this. But automation by itself does not fix the problem. Customers need to be told what they need. A system that not only processes applications but also helps people comprehend what they are signing up for. Think about an app with an assistant that acts like an RM. It remembers all past interactions, resumes conversations where the client left off, and adjusts its guidance without requiring the client to repeat themselves. Essentially, this RM is context-aware and maintains a record of all interactions with the client within the app.
That background is really important. If a borrower knows why a certain loan product is being suggested, how the interest will be calculated, how the repayment will work, and what the dangers are, they are more likely to finish the application and trust the bank for future requirements. Onboarding is now a chance for the customers to upgrade their knowledge.
This is what good RMs have always done. They talk about prepayment options, clarify penalties, or offer other options that fit with how much money a consumer makes. Technology can perform the same thing on a larger scale, all the time, and with the same level of accuracy. If you are a first-time borrower and use an app like SBI YONO or CRED, you can get clear, step-by-step instructions, alerts when you are borrowing too much, and even better product suggestions, all without having to go to a branch or call.
It is apparent what the banks will gain. RMs can only work with a certain number of clients, and their skills are not the same. A digital Relationship Manager Layer makes sure that all customers get the same level of service. At the same time, banks may be more open and honest if they keep track of advice and suggestions, which is what Indian authorities want.
Of course, there are problems. The system must be able to explain its thinking in simple terms for customers to believe it. People will not want to trust advice that seems unclear. That is why explainability is the most important thing that will make consumers trust AI in financial services.
This is considerably more significant in India. Millions of people who are borrowing money for the first time are comfortable with smartphones but do not know much about credit products. Clear explanations and prompt help are not simply helpful for them; they are necessary. A digital relationship manager can answer questions before they are asked, cut down on mistakes, and make the trip less scary by using information from past interactions, behavior patterns, and financial data. That generates trust, which is the most important thing in banking.
This is also closely related to keeping customers. Customers are far more likely to stay with the bank, look into other services, and tell others about the service if they feel helped and guided during the onboarding process. That trust sets you apart in a congested market where banks and fintechs are all trying to get your attention.
So, explainability is not about making technology smarter; it is about making customers feel better. It lets banks give advice that feels personal, even when they have a lot of customers. India has already shown the world what digital payments can do. The next step is to make complex financial journeys simple. Banks that do this will help facilitate better onboarding while also changing how people think about money in a digital-first economy.