FINTECH VS TRADITIONAL BANKS

Fintech players are working both as a challenger and a collaborator

FINTECH

Faster loan processing. The process, from origination to disbursement, is digital

Addressing a new class of borrowers, the underserved market, with small loans

Reliance on multiple data points, including social media clues, data analytics, and behavioural aspects

Automated underwriting process and risk management

Lower operational cost, heavy use of technology

Mostly present in metros and big cities

Insignificant in terms of volume and value of lending; scaling up is a huge challenge

Yet to see an economic cycle of boom and bust

TRADITIONAL BANKS

Loan processing takes weeks, even months if there are queries

Happy to lend to those with regular income and good repayment capacity

Rely mostly on credit bureau scores; there is not much analysis of these reports

Rely on human judgment

High-cost model with people and branches

All-India presence

Dominate the lending business

Been there, done that. They understand business dynamics well