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Digital shouldn’t discount direct. Despite the digital blitz in the Banking, Financial Services and Insurance (BFSI) sector, the industry relies heavily on Direct Selling Agents (DSAs). DSAs ensure cost-effective and extensible distribution and it shows - channel Partners in various forms account for 30% of lenders’ retail books on average. DSAs are the lending frontmen for banks that can help source borrower pools seamlessly and quickly.
The DSA industry is not without its challenges, however.
Mis-selling: Only a couple of years back, the Reserve Bank of India (RBI) began to get jittery about DSAs because it believes there’s a threat of data theft and operational damage. Understandably, lenders have always been concerned about DSAs mis-selling.
Diffused focus: There are also concerns that the quality of the loans generated by DSAs is poor, especially since most DSAs work with multiple banks and they're focus might be diffused; plus their personal biases can also play into what products they push.
Attrition: DSAs might only be interested in getting their commission and might move to another lender that compensates them better, which leads to high levels of attrition.
Skills and systems: Lenders are ultimately responsible for the conduct of the DSAs, however, legacy technology leads to inefficient tracking of DSA activities.
Lack of transparency: Some DSAs might indulge in deceitful practices and there’d be no way for lenders to track that information.
Turnaround Time (TAT): Operational lags might delay the TAT of DSA-sourced loans, DSAs themselves have to work through applications and other paperwork for customers which also adds to their overhead and TAT.
No doubt that DSAs are the backbone of the Banking, Financial Services and Insurance (BFSI) industry. They’re a part of the industry’s marketing efforts, especially for lenders that don’t have the outreach infrastructure. DSAs also ensure ease of origination which leads to good growth for banks. Without DSAs, banks would have to do all the operational work and due diligence.
Knowing the opportunities and challenges of DSAs presents a quandary for lenders. How do we go about solving this?
The way we look at it at FinBox, we believe an integrated and intelligent module/system to manage DSAs and sub-DSAs would streamline this process. Here’s what we think the features of an ideal DSA management system for lenders should look like -
An integrated dashboard view that provides visibility to lenders. All the activities of DSAs, Sub-DSAs and further. Not only does this ensure accountability, but reduces any chances of mis-selling. A one-stop-shop for lenders to view what stage every DSA-initiated loan application is at - to keep track of loans, approvals and disbursements. This gives lenders more transparency and control over the DSA-led lending funnel.
Operational lags delay the TAT for loans. For instance, the KYC documents submitted by the user might have some discrepancies and the back-and-forth will certainly delay the process and might even result in drop-outs. A real-time view of every loan application and why the buck isn’t moving further would help banks resolve issues more immediately. This also allows banks to pick the best leads.
Accessible loan offers
A real-time view of the loan also gives lenders the ability to trigger a loan offer when it reaches that stage, almost immediately. A better, more accessible way to do that would be to generate credit links and send those to the DSAs via Whatsapp. Not only does this ensure speed and efficiency, but it will certainly work in favour of banks looking to rev up their operations and scale digital disbursals.
No software can overpower human nature. There’s always the possibility of fraud/mis-selling/attrition among DSAs. One of the more critical features of a DSA management system would then allow lenders to perform analytics across the DSA chain, to see how well each DSA is performing and improve loyalty.
Better payout management
The dashboard, equally accessible to DSAs as it is to lenders, will allow DSAs to view the details of their monthly payouts as per the application funnel. It would also allow lenders to set rules to automate payments at scale.
How FinBox can help
Our DSA management module has all the features listed above and what’s more?
FinBox’s DSA management module easily integrates into existing apps for DSAs or other partners. Our no-code module seamlessly blends with your branding and custom journeys. On the off chance that you don’t have an app yet, our microsite ensures you still have independent journeys for your DSAs.
FinBox DSA management module is your One source-of-truth analytics and tracking dashboards.