MSMEs Demand Seamless Banking and Credit Experiences

Author: Mr. Nirav Choksi, CEO & Co-founder, CredAble

Quick, frictionless, and personalised.

MSMEs are rethinking their relationships with money. 

They are advancing in their digital journeys and have come to demand more from their banking experiences. 

As MSME expectations for instant service rise, many banks continue to fall short in delivering smooth onboarding and credit experiences. In fact, the greatest potential for enhancing Customer Experience (CX) lies in onboarding and issue resolution journeys.

CX is a strategic differentiator for banks

At a time of global cost-of-living crises and continued supply chain disruptions, banks are looking to seize new opportunities within a fluid landscape.

What most financial institutions need to understand is that many businesses, even the small ones, have set a bar for superior experiences based on interactions outside of banking.

This makes it important for banks to:

• Take inspiration from leading tech giants

• Understand the competition

• Co-create with customers

• Establish customer success capabilities

The Reserve Bank of India (RBI) is spearheading a significant advancement in the nation's credit landscape with its introduction of the Unified Lending Interface (ULI), paving the way for other major banks to follow suit.

The good news is that banks have made significant strides in achieving CX success in a competitive environment by investing in cloud, automation, and low-code integrations. Having said that, fragmented systems continue to clog pipelines and stall their progress.

How can banks deliver differentiated value?

With an average of 1,500+ customer journeys across various business units and product lines, banks have a lot of untapped potential for de-frictioning and improving the customer experience.

McKinsey reports that banking leaders who excel at driving customer satisfaction also top the charts in terms of financial metrics such as increased growth, lower costs, and higher Total Shareholder Returns (TSR).

As global events accelerate the shift in customer expectations, banks need to keep up by reinventing the wheel. This means altering the end-to-end customer journey—right from the point of application through decision-making to loyalty building.

When it comes to building a next-generation credit experience, especially for underserved segments like Micro, Small, and Medium Enterprises (MSMEs)—financial institutions have to align purpose with profitability.

In most parts of the world, MSMEs are referred to as ‘the neglected middle’ or ‘thin-file’ customers. They are unable to access timely and affordable financial products and services that adequately meet their needs. While they may not be high-risk credit seekers, the credit needs of these segments are varied yet vast.

Banks that focus on closing the gaps in credit provision will be positioned to win in the future.

From speeding up development by using low-code platforms to automating loan origination journeys and using alternative data along with Business Rules Engines (BREs), banks can up their credit innovation game and ensure hassle-free lending journeys.

Deliver exceptional CX with low-code

Low-code platforms have come to the forefront in allowing banks to develop and deploy intelligent banking solutions at speed.

These advanced platforms, backed by drag-and-drop functionalities and an intuitive visual User Interface (UI), empower banks to:

• Bring tailored lending solutions to the market in weeks instead of months

• Streamline customer onboarding, improve business agility, and reduce costs—all while enabling innovation in product offerings

• Create digital ecosystems and credit journeys that meet the demands of a rapidly changing market​

Banks can no longer afford to spend months or years trying to launch new products and services. What they need today is a native low-code capability that will allow them to develop and launch applications quickly, reducing the time to market for new credit products. This level of agility is crucial in adapting to the dynamic needs of MSMEs. It also makes way for the proliferation of automation capabilities across the bank.

By leveraging composable, reusable components—banks can create customisable and user-friendly onboarding experiences that can be easily adjusted as regulatory requirements change. Additionally, low-code solutions also offer a cost-effective alternative, allowing banks to scale their digital capabilities without significant increases in development costs.

While banks cannot completely do away with the complexity of their operations, they can ramp up end-to-end automation capabilities and ensure consistently great CX. Low-code platforms support the automation of routine and repetitive tasks, freeing up resources for more strategic initiatives in the credit journey. This, in turn, leads to targeted, innovative lending products tailored to the specific needs of MSMEs.

APIs: A business priority in banking

Financial institutions have already experienced the disruptive power of APIs and are reaping its benefits in full.

APIs are transforming the way banks interact with customers and access information. In a bid to harness the innovative potential of APIs, banks are prioritising building API capabilities and empowering IT leaders with the mandates they need to achieve a tech-driven future business model. 

A common and standardised API framework is key to this transformation. It allows for more efficient integration of diverse data sources, leading to a more streamlined and consistent credit evaluation process. 

Reimagining CX for the next era

To be able to develop next-generation credit experiences, especially for segments like MSMEs—banks need to assess these underserved borrower segments, scrutinise their experience of seeking credit, and use the findings to create new borrower journeys and credit products.

Leveraging low-code platforms will help banks build customisable borrower journeys and achieve end-to-end automation at the enterprise scale. This means banks can automate the digital banking journey, loan origination, trade finance, and customer support services to offer exceptional CX. 

There’s no doubt that taking a digital-first approach with a personal touch can help banks break the mould and cater to historically overlooked segments.

One thing is certain—the right blend of physical and digital touchpoints throughout the customer journey is needed. Financial institutions should aim to combine the convenience of digital channels with meaningful human interactions.