The startup's AI-enabled platform allows financial institutions to assess risk profiles of customers and monitor portfolios in real time to ensure smoother collection
Sumeet Srivastava, Founder & CEO, Spocto
Image: Neha Mithbawkar for Forbes India
The best way to lose a customer is to give the account to one’s collection department. This is Sumeet Srivastava’s firm belief. It is also what led to his founding Spocto, an artificial intelligence-enabled platform that allows financial institutions to assess the risk profiles of their customers.
Sample this: When a customer takes a home loan, a credit and profile check is done. While past behaviour may show that the customer is likely to pay up, how does one make an assessment for, what in most cases, is a loan with a 20-year tenure? At any point in the journey the loan could go bad and the lender may have missed the warning signs.
Or a two-wheeler loan customer may have an unpaid charge of Rs100 on account of one bounced debit for monthly loan installments. That charge would not allow them to remove the hypothecation on the vehicle and make a sale impossible. How does one get this account closed?
As credit has exploded in the last decade the number of consumer interactions have increased manifold. In FY22 alone personal loans rose 22.4 percent by value to Rs792,400 crore, according to data by CRIF High Mark, a credit bureau. There were 58 million active loan accounts. Each of them has to be managed and monitored for signs of stress.
Lenders have seen old collection methods failing. Outsourcing to a collection agency brings in sub-optimal results. At Rs1200 the cost of sending an agent may not be worth it when collecting on a personal loan payment of Rs2000. At the same time financial institutions realise they cannot be good lenders unless they learn to collect efficiently. Warning signs have to be picked up and consumers have to be nudged to make payments. This is painstaking work that is often outsourced and best done through the use of technology.