Everyone is talking about it!
API is like the buzzword in the lending sector!
API stands for Application Programming Interface. They have been around for many years and have now turned more mainstream for their unique abilities.
In layman terms, APIs include a series of protocols that allow a software solution to call on functions from other sources and systems. In lending, APIs enable the lender to acquire critical information that is essential for decision making.
When the quantity and quality of data available with the lender is accurate and extensive, it turns into a competitive advantage for the borrower. However, the lender must be able to gather that kind of information in a cost-effective and secure manner.
When the information in hand is validated through relevant sources, decision making becomes easier, and the lender is better positioned to assess loan requests from a whole array of customers.
This is where, APIs join the game!
With the pandemic catalysing the need for digital lending and the percentage of bad loans increasing, APIs are here to stay and become the future of efficient and safe lending!
How important is efficient loan decision making?
The RBI has reported a whopping Rs 660 thousand crores of bad loans for Indian banks since 2014.
A popular opinion behind the downfall of the 94-year long Lakshmi Vilas Bank is its unwarranted shift of focus to larger loans.
Clearly, bad loans can bring down any organization irrespective of its legacy and calibre.
Apart from above mentioned benefits of API, there are for compelling reasons for borrowers to embrace an API-driven structure. They are:
The Loan Origination Software includes multiple APIs that can be categorized as follows.
1. Identity verification: This includes APIs for PAN card, driving license, voter ID, passport and AADHAR verification. Techniques like OCR are used by the APIs and no customer data is stored in them at any point. Therefore, the privacy data remains unaffected.
2. Address verification: Generally, two important checks are made under this category and they are electricity bill validation and LPG verification.
3. Vehicle verification: The RC number of a borrower is all that it takes for this verification, using which, certain personal details, like address, age and name of the owner can be identified easily. This type of check can also be called asset verification.
4. Financial verification: Financial data is hard to acquire, can be complex and yet is important to make a valid decision in the loan origination system. Tools like data scrapping and penny drop API are used for financial checks like bank account verification, bank statement analysis, ITR extraction and GST details (GST details are also collected for merchant verification). Again, the data is 100% secure during the process.
5. Utilities API: Face crop API, Face match API, Name match API and Face Liveness are some of the APIs used in this category.
6. Digital contracting: When the loan has been approved the borrower needs to initiate the E-sign transaction. APIs can be used for this purpose too.
7. OCR service: OCR stands for Optical Character Recognition. It is used to convert text from images into machine-coded text. For example, OCR API can be used to read a scanned copy of a document and the data obtained from the image can be repurposed for use by the borrower.
A deeper look into the range of APIs available for the lending industry follows…
Note: Alternatively, an API to verify the GST number alone is also available.
The Final Word
Get API-fied with CloudBankIN!
APIs are like the superpower needed by any lending organization.
Incorporated with all the above APIs, is the robust digital loan origination software solution, CloudBankIN, from Habile Technologies.
This signature product addresses three main issues that banks and other lenders face while moving into the digital mode.
In a nutshell, if API is the fuel to your lending business, then CloudBankIN is the powerful engine that will deliver the best essence of the APIs.
OverviewIn a world that is rapidly moving towards digital transformation,
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