Google Cloud results
Approving loans in minutes instead of hours
• Improves customer experience by reducing loan disbursement from six hours to
under two hours
• Launches an easy-to-use digital loan approval application in just 30 days
• Processes 95% of motorcycle loans in less than two minutes
• Migrates approximately 14,500 employees to G Suite in less than 90 days
L&T Financial Services is one of the largest lenders in India. India’s demonetization policy in recent years has led to a shift from cash transactions to digital payments. In 2016, the government withdrew 500 and 1000 rupee notes from circulation and encouraged a heavily cash-based population to deposit their cancelled notes in banks. Financial institutions needed to pivot to a new way of doing business to stay competitive. L&T Financial Services modernized its IT infrastructure to keep up with changes and capture digital opportunities.
“Working capital is crucial to stimulate growth in rural communities. Our role as a lender is to provide access to funds. We don’t want to burden borrowers with the complexities of getting a loan. Towards this end, digitization is an important step,” says Dinanath Dubhashi, Managing Director and CEO at L&T Financial Services. “Google Cloud helps us streamline service delivery and identify the right customers. By offering the fastest processing time in the industry, we want to be the go-to lender for all customers.”
L&T Financial Services considered multiple cloud providers before choosing Google Cloud. According to Dinanath, Google Cloud understands both the need for businesses to move fast and the need for IT to modernize at different speeds. “We weren’t forced to abandon existing IT systems and migrate lock, stock, and barrel to Google Cloud on day one.”
L&T Financial Services engaged Google Cloud Professional Services to guide its digital transformation journey. The smooth migration from proof of concept to full-scale deployment on Google Cloud took a matter of months.
Digitizing the workforce with G Suite
“Collaboration: a small idea with big opportunities. G Suite helps us connect remote branches with the head office, easily access shared files to submit and track approvals, and conduct face-to-face discussions to accelerate approval processes.” —Dinanath Dubhashi, Managing Director and CEO, L&T Financial Services
The move to the cloud at L&T Financial Services started in 2017 when the company introduced G Suite to its 14,500 employees. The legacy email system was cumbersome to use, especially for frontline staff who need email access while they are on the road. Using Gmail, employees can connect with customers and co-workers from anywhere, on any device. Employees save time by scheduling meetings with Calendar, collaborating on Docs, and conducting video calls using Google Meet.
As Dinanath says: “Collaboration: a small idea with big opportunities. G Suite helps us connect remote branches with the head office, easily access shared files to submit and track approvals, and conduct face-to-face discussions to accelerate approval processes.”
Modernizing business operations by moving to Google Cloud
“In this fast-paced, high-stakes digital world, IT modernization is crucial to any business that wants to operate with agility and efficiency. Migrating to Google Cloud accelerates data-driven decisions and application development in a secure environment.” —Dinanath Dubhashi, Managing Director and CEO, L&T Financial Services
The next step in digitization was to optimize IT operations by moving core business applications to a cloud platform that meets current and future needs. The legacy infrastructure was composed of disparate IT systems that were expensive to maintain and resulted in data silos. L&T Financial Services benefit from a cloud-based architecture by managing resources more efficiently, accelerating app development, and deploying machine learning to gain business insights.
“In this fast-paced, high-stakes digital world, IT modernization is crucial to any business that wants to operate with agility and efficiency. Migrating to Google Cloud accelerates data-driven decisions and application development in a secure environment,” Dinanath adds. “Besides, we gain operating efficiencies by being able to scale up and down on cloud capacity according to our business needs.”
Turning loan officers into “branches” with Google Cloud mobile solutions
For rural customers who live far away from city centers, going to the bank to obtain or pay a loan may involve a two-hour journey or more to the nearest branch. L&T Financial Services loan officers provide “anytime, anywhere banking” by meeting customers where they live and work. Loan officers are empowered with mobile tools to provide one-stop-shop financial services such as loan sanctioning, loan disbursement, and debt repayment.
Google Cloud Professional Services team worked with L&T Financial Services to design and deploy the B2C app using Google Cloud mobile solutions such as Firebase, Cloud Firestore, Cloud Functions, and Cloud SQL. This app supports a number of concurrent users and can be used offline in areas with poor connectivity. It was smoothly migrated from proof of concept to full-scale deployment in a matter of months for speedy time to market.
Loan officers use this mobile app to authenticate a borrower’s identity through biometric-based verification and perform credit evaluation through credit scores and online assessments. On the back end, this app integrates with more than 15 critical real-time data sources, including India’s biometric ID system, Aadhaar. The application is pre-filled with the applicant’s data, thus reducing human error and repetitive admin work.
After capturing the customer data, loan officers run the credit assessment and sanction loans within seconds. The app also integrates with various payment gateways to allow borrowers to pay their debts.
Converting data into credit insights using BigQuery
“We designed and built an algorithm for credit scoring that predicts risk more accurately than human underwriters. This machine-learning model, powered by BigQuery, reduces delinquency rates and improves portfolio quality.” —Dinanath Dubhashi, Managing Director and CEO, L&T Financial Services
Previously, the decentralized IT architecture meant data resided in different locations and was difficult to track and manage. Google Cloud provides L&T Financial Services with a comprehensive view of the business and the ability to analyze data for business insights. Using APIs and SDKs, L&T Financial Services integrates data points from internal sources such as financial, accounting, and data processing systems and external sources such as telecom and utility payments into Google Cloud.
Taking data intelligence one step further, L&T Financial Services adopts a responsible lending approach by applying algorithm-based data analytics to improve credit standards. Beyond traditional data such as credit score and credit payment history, the company also considers macro-economic indicators for risk audits. For example, a farmer’s ability to pay off the loan of his new tractor depends on a successful planting and harvest. So L&T Financial Services feeds long-term data into BigQuery and runs queries to predict loan defaults based on rainfall and crop yield.
“We designed and built an algorithm for credit scoring that predicts risk more accurately than human underwriters. This machine-leading model powered by BigQuery reduces delinquency rates and improves portfolio quality,” says Dinanath. “We continue to improve the performance of real-time predictions by feeding extensive data collected across our network into Google Cloud.”
Improving security and compliance with Google Cloud
Businesses around the world are taking a stronger stance on cybersecurity to counter potential reputational and financial risks. Likewise, L&T Financial Services treats the security of customer and enterprise data with utmost importance.
“We’ve implemented a three-tier security architecture with multiple layers of defense and security to prevent unauthorized access, computer viruses, or other data security breaches,” says Dinanath. “Google Cloud offers a host of security solutions, such as Cloud Identity and Access Management and Cloud Data Loss Prevention to tackle different threats and unauthorized access to our network.”
As a financial institution, L&T Financial Services is required to follow “Know Your Customer” (KYC) guidelines set forth by the Reserve Bank of India to combat money laundering. Together with Google Cloud, L&T Financial Services provides unrestricted regulatory access to KYC customer data, including proof of identity, income and tax statements, and bank account details in the cloud.