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Contactless credit applications via Digital KYC has seen a strong uptick in May and June, with South India leading the adoption with close to 41 per cent of Digital KYC applications coming from this region.
City-wise, Delhi-NCR accounted for 21 per cent of the total applications, followed by Hyderabad at 16 per cent which remained in absolute lockdown for a much smaller period, says BankBazaar.com, a financial marketplace and free credit score provider with 100 million visits per quarter.
The metros are more aggressively looking for credit compared to the non-metros, with almost 85 per cent of Digital KYC applications coming in from the metros. Mumbai and suburbs as well as Chennai, which are still operating with tighter restrictions, were tepid with just 12 per cent and 9 per cent of applications, respectively. Among the non-metros, the largest number of applications were from Coimbatore and Jaipur, followed by Lucknow and Indore.
Contactless services
“As safety becomes paramount, financial institutions predict a 100 per cent growth in digital lending by end of this year. We are seeing an early reflection of this on our site. With 50 million registered users from across India, we have a window into the Indian consumers’ financial habits, and the first impressions are fairly conclusive. The acceptance for contactless finance is gaining in leaps and bounds and early adopters of Digital KYC are benefiting,” said Adhil Shetty, CEO, BankBazaar.
Credit score awareness
The other impact of the pandemic has been the increased awareness of credit score among customers. As need for credit recovers post-Covid, a stellar credit score also becomes a necessity. Credit score awareness has been on the rise in the last few years due to improved financial literacy, and BankBazaar saw a 111 per cent increase in consumers checking their free credit score in FY20. However, due to the moratorium and the tightening lending norms in the wake of the pandemic, customers have started paying more attention to their credit scores.
Data provided by global leading information services company Experian, that BankBazaar has partnered with, reveals an increase of 25 per cent in June over May in the number of consumer enquiries for credit reports in India. In terms of geographical break-up, North has witnessed the highest enquiries at 31 per cent followed by South at 28 per cent and West at 22 per cent, an encouraging sign as it indicates some form of economic recovery.
Sathya Kalyanasundaram, Country Head and Managing Director, Experian India, said, “Covid-19 will be a catalyst for digital transformation in the country. The implementation of contactless credit applications via Digital KYC will help customers get quick and easy access to credit. This will provide cost efficiencies around acquisition as well as automate decisioning for lenders. Our investment in BankBazaar.com has been with a vision to boost financial inclusion and empower consumers to take control of their credit reports. As customers move towards Digital KYC, information services firms like Experian will play a vital role in ensuring frictionless and faster access to credit. This initiative has come at an opportune time – consumers get timely and seamless access to credit while financial institutions are assured of identity verification and faster processing of loans.”
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