Avanse Financial Services Democratises Education and Education Financing by adopting innovative technology
CXOToday has engaged in an exclusive interview with Mr. Samir Mohanty, Chief Transformation Officer, at Avanse Financial Services
- Tell us about Avanse Financial Services, its business model, and operations.
Avanse Financial Services is a new-age, technologically advanced, education-focused NBFC on a mission to provide seamless and affordable education financing for every deserving Indian student. We provide a wide range of education financing solutions, such as higher education loans to study in India and abroad, school fee financing, skill enhancement loans, executive education loans, e-tutoring loans, education institutions loans and social infrastructure loans. At Avanse, financing solutions are designed to cater to the entire education lifecycle of students spanning from KG to PG.
We strongly believe that no deserving student should miss an opportunity to access quality education due to the lack of financing, irrespective of their social strata or co-borrower’s financial ability. Our dedicated teams counsel students & parents and handhold them through every stage, right from the application process to the disbursal of the loan.
The early adoption of technology has allowed us to move from human-intensive and time-consuming processes to automated services. Our omnichannel presence across the offline and online platforms helped us connect with audiences across the country.
- What are the mission and vision of the company?
Established in 2013, Avanse Financial Services has been on a mission to make education financing seamless and affordable for every deserving Indian student. Our purpose has been to democratise education and education financing in India.
We have fulfilled the educational dreams of ~2.5 lacs academic aspirants across 3,000+ institutes and 22,000+ courses in 50+ countries. The organisation has also provided growth and working capital to ~1K educational institutes catering to over ~5-6 lac students.
- How are AI and ML going to transform the education lending sector? Have you integrated or planning to integrate these technologies into your business model to be future-ready?
The financial industry witnessed a significant transformation in business models due to digitalisation. This has made organisations focus on creating personalised financing solutions for their customers. NBFCs are striving to offer customised solutions right from the customer acquisition phase to the collections stage with the help of AI and ML. Various digital tools, such as data analytics, data mining, virtual assistants, etc., are employed by NBFCs to enhance their user experience.
Our organisation, Avanse Financial Services, has adopted a Phygital Operating Model. As a part of this model, we have incorporated the amalgamation of alternate data and traditional information to create customised offerings and onboard the right credit. This hybrid model drives operational efficiencies ensuring effective risk management.
Avanse deploys a special approach while sanctioning the loan by assessing the borrower’s profile basis the future employability potential of the student rather than solely focusing on the financial background of the co-borrower. Therefore, we evaluate a student’s profile based on factors such as their academic performance, the pedigree of the university and course, results of the entrance test, continuity in education, and more. Over and above this, we also study the alternate data on social chatter, verify third-party research material and compare the intel basis of the primary research.
We have implemented an AI-ML-based collection platform, which is a bounce prediction model under risk analytics. It has been created to analyse and identify the accounts that might enter the overdue stage. This analysis is conducted with the help of AI and ML analytics. Once such accounts are identified, they are transferred to the next level helping us to reach out to borrowers to give reminders at regular intervals.
- What are the technology-led trends that we can foresee in the education lending sector?
AI and ML are rapidly changing the face of the lending space. Digitisation has enabled organisations to enhance their customer experience. Thanks to the omnichannel presence approach, customers can now access products and services effortlessly, which results in a seamless, enhanced experience.
Massive amounts of data are now available to be crunched for every application through technology. With intelligent edge devices, data can be processed at its creation point and analysed quickly at a lightning-fast speed. This can result in a faster and more precise resolution for businesses, shortened workflows, and increased revenues based on analysis. By adopting edge computing, we can gain deeper insights into the predictive analysis.
Integration of technology has assisted financial institutions in strengthening the governance framework. Governance strategies require technology, knowledge and robust processes to promote organisational transparency. Digitisation enables companies to work more efficiently, with well-organised processes and relevant data, allowing faster decision-making and leveraging new opportunities, thereby achieving better and tighter governance processes.
Consumer privacy is another key area many financial institutions must pay attention to in the coming year. With powerful, efficient chips, more and more devices execute data on devices. This increases the institution’s responsibility to keep it secure and safe from any sort of cybercrime. Avanse has implemented robust processes to strengthen its cybersecurity operations.
- What challenges and opportunities Avanse (innovation and tech-related) is facing in running the business?
The pandemic has made us rethink and redesign our strategies and incorporate technology into our daily processes. The domain expertise and urge to develop new technology have helped us overcome all the challenges imposed by the pandemic and efficiently provide a seamless experience to all our stakeholders. AI-led predictive models are helping us make a sound decision on the best type of credit our organisation can underwrite. Moreover, adapting technology in our daily systems has not only accelerated credit sanctioning processes but also equipped us to identify potential defaulters. This has enabled us to take necessary actions to further strengthen the processes and thus, offer best-in-class customer experience throughout their journey with us. Technology has also enabled us to remain in constant touch with all our stakeholders and ensure smooth business continuity no matter what the situation is.
- What are the tech milestones of Avanse that the team is proud of?
Avanse Financial Services is a student-centric organisation that prioritises providing credit on time to enable students to fulfil their educational aspirations. It is essential to understand the credit needs of students and provide them with appropriate financial solutions to achieve their dreams. We at Avanse aim to collaborate with reputed partners to provide the right credit on time.
In line with this, Avanse has partnered with a leading AI-powered credit decisioning innovator to make AI-driven credit decisions and boost the organisation to onboard credit effectively. This will further strengthen our technological advancement journey dedicated to providing a hassle-free experience to our stakeholder ecosystem. Investing in emerging technology has always been a top priority for the business. As a customer-centric organisation, we have implemented the perfect blend of an AI-driven approach and appropriate human intervention to analyse credit without any error.
Data protection has gained significant importance during the past couple of years. Thus, robust data security strategies have been deployed to protect information assets against cybercriminal activities. They are also guarded against insider threats and human error, which remain among the leading causes of data breaches today. We have deployed tools and technologies that enhance visibility into where the critical data resides and how it is used, apply protections like encryption, data masking, and redaction of sensitive files, and automated reporting to streamline audits adhering to regulatory requirements. Noting all the achievements, Avanse Financial Services has recently been recognised for its Data Security Strategy at Cyber Security Excellence Awards 2022 organised by Quantic.
- Could you please elaborate on your future plans related to tech?
We have always been a step ahead in terms of digitisation as we embraced technology in pre-pandemic times. Avanse has various technology-based operating models, such as the employability potential analysis model, credit system model, bounce prediction model, and more, ensuring the smooth functioning of all the business verticals of the company. The synergy of AI, Big Data, and Data Analytics offer meaningful business intelligence to implement superior data management. The overall adoption of technology has enabled us to reduce lending risk and provide a superior customer experience. It has helped us adopt insight-driven lending, paving the way to cater to various white spaces and build a sustained profitable enterprise.
