‘PNB Housing Finance is a technology company in the business of housing finance’
The technology budget is generally in the range of 3 to 5 percent of the annual revenues. The company has been able to convert 25-30 percent of the leads generated into sales by using a well integrated and process based IT platform. Nitant Desai, Chief Operations and Technology officer, PNB Housing speaks with EC’s Abhishek Raval
What’s the role of technology in housing finance ?
We are a technology company in the business of housing finance (HF). The core application layer (ERP) is the base on which the transactions are recorded in a housing finance business. Atop, there are some applications, which act as business enablers.
The hub and spoke is the target operating model of PNB Housing Finance. The model is process driven and based on technology, end-to-end. This helps a new entrant to easily understand the business relatively easily compared to any other business.
Underwriting is a fundamental part of HF and the per person productivity is crucial part of underwriting. Digitisation and the target operating model enhances the productivity of the underwriting team. There are two kinds of underwriting: Financial and property. It includes specific assessments in the legal, technical, fraud control, etc, which are processed using the uConnect app, all using a single platform without any screen toggling involved. The updates are done seamlessly on the ERP. These applications are scalable and future ready.
How much time does it take to convert an application into disbursal?
Faster turnaround time is and has been a key differentiator in the lending industry and PNB Housing aims at turning around a loan application in the minimum possible time with the use of technology.
Currently we take about 3 days on an average for sanctioning a loan application and 1 day to disburse the same post property finalization by the customer. The reason for such a quick turnaround time is that immediately after receiving customer request from various channels like our digitally enabled contact centre and lead aggregator portals, etc., we conduct verifications through our e-verification softwares like iBox. It is an in-house online platform that conducts identification checks through PAN number, utility bill and email id, without any manual intervention. Also the other verification reports such as field investigation, fraud check, technical and legal reports are initiated online and are uploaded by the verification agencies directly on the system.
The customer is regularly updated in the status of loan application through SMS/email. An amalgamation of all these processes cuts down the turnaround time significantly, giving us an edge over others and that too with an unparalleled service delivery standards. We hope that this shall be reduced further after the implementation of some of the ongoing IT projects which are on the verge of completion.
For self employed businesses, we use Perfios, which analyses a thick bunch of bank statements in minutes. This also has a positive impact in better underwriting and as a result leads to low delinquencies and NPAs.
Compared to the industry average PNB HF’s lead conversion ratio is higher. Why ?
PNB HF converts 25-30 percent of the overall leads into sales. The industry average is 4-5 percent.
More than 50 percent leads are converted through the uConnect app or portal. The investments made in the call centre empowers the staff to be engaged with the customers over a period of days and weeks to re-initiate the conversation trails and ask for specific requirements. We also whatsapp the required details to the customers.
Collections team plays a critical role in the HF business. How are they digitally enabled ?
Every member of the collections team has been given a tablet, which has a collections app, connected with the ERP. The money can be collected in cash or cheque. A functionality has also been designed, which enables the customer to click on a link triggered on his mobile device. This usually helps to digitise the payment but also comes handy for bounced cheques.
A customer behaviour scorecard has been designed, which provides trends on the payment history. On an average, the team collects 5-6 lakhs a month through the app.
How many deposits have you got as of now since the online deposit facility was launched?
We are a deposits accepting HFC and it has been one of the sources of our raw material, that is, funds. We have always been keeping a close focus on deposits and the same is evident from the fact that we are the second largest deposits accepting HFC in the country.
Even though we have been offering fixed deposits since long, our online deposits facility was launched in August 2018 with some features that are unique to the sector. We provide conveniences like online submission of form 15G/H and facility of online redemption of deposits at customer’s fingertips. The online deposit facility is available on the mobile app and corporate website which enhance the ease, as it can be accessed anywhere, anytime and customer does not need to visit the branch at all.
Since the launch of online deposits functionality, approximately, 20000 applications for deposits have been created through online and offline channels.
Approximately how much has the company paid to the agents through the digital channels ?
Remittances to your business partners is something which is done across financial sector. What matters is how we pay them and how friendly we make it for our associates.
At PNB Housing, we have created a web and mobile application ‘vConnect’ through which our partners can raise their e-invoice from anywhere based on the business sourced and post verification of invoice, we make online payments which reach them in a much lesser duration than cheques or any other medium. This application has been in use for last 5 years. About 90-95% of the total cost of acquisition is being paid through the app on an annual basis.
What’s your cloud strategy and how do you test your applications ?
We operate on a hybrid cloud model. Going forward, based on the roadmap that we have charted, we might completely move on the cloud.
The testing is done with a combination of agile and waterfall methodologies. Depending upon the application, the testing methodology differs.
Being an organization growing at a rapid pace and a good number of customers and business partners getting associated every month, each of our application is subject to various rigorous test by different teams before its launch, the last being user acceptance testing by the end users. We follow agile testing methods and before the launch of an application, it goes through a host of testing procedures for various purposes such as:
Besides the mentioned tests, every application is subject to performance testing and security testing as well.
The company is also in the last phase of completing the Security Operations Centre (SOC), which will be powered with AI related features.
What is the IT budget for FY19?
Our annual IT budgets are generally in the range of 3 to 5 percent of the annual revenues and this is symmetrical to that of the HFCs in this space. Having said that, with a single digit percentage, we have been able to foster very convenient, hassle free, forthcoming and quick services to our customers, partners as well as employees. Whether it is requesting for a loan, subsequent disbursement, creating deposit, raising of payout requests by partners or even the entire human resource management, everything is at the fingertips of that particular stakeholder.
Along with this, we have ensured that our services as well as data is accurate and secure.
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