RBI is a firm but fair regulator, has been cautioning about over-leverage for a while: Rajat Deshpande, FinBox

FinBox is a rapidly scaling fintech company based in Bangalore that provides embedded finance infrastructure and digital lending solutions to start-ups and enterprises across the globe. The FinBox suite works across alternate data scoring, embedded credit line, financial data integration, and analysis. In a conversation with ET Digital, Rajat Deshpande, Co-Founder & CEO of FinBox talks about how the platform enables organisations to build financial services on top of their existing suite of business offerings to deepen access to financial services among their audiences, including both retail customers and SME/enterprise buyers while driving scalability of their offerings. Edited excerpts.

The Economic Times (ET): What was the genesis of FinBox, when did it start and what did it set out to achieve?
Rajat Deshpande (RD): FinBox was born out of our desire to boost financial inclusion through hard-to-resist innovative and inclusive technology solutions to solve some of the most complex problems in the financial services industry. The company was started in 2017 with a goal of solving the trickiest problems in the credit space. We started out with credit decisioning and eventually expanded our product offerings to impact the entire value chain, which includes solutions for onboarding, disbursal management, KYC, fraud, policy deployment, bureau and device intelligence, and lots more.

As of today, we have got offices across Bengaluru, Gurugram, Mumbai, Ho Chi Minh City (Vietnam), Manila (Philippines) and we are expanding aggressively across SEA and other geographies as our products have received phenomenal traction.

ET: What service or product does FinBox provide and how is it different from other fintech players?
RD: FinBox offers a comprehensive suite of products that spans the entire credit value chain, from customer onboarding to loan disbursal and ongoing monitoring to generate early warning signals.

Our credit infrastructure offerings include the Partnership Lending Stack - a modular system that facilitates quick go-live and seamless partner onboarding for both lenders and platforms. Lenders use this product to swiftly design new credit offerings and seamlessly onboard partners, enabling rapid, scalable distribution of their financial products. The LOS (Loan Origination System) is another modern lending stack designed to orchestrate the entire lending process, integrating multiple APIs for onboarding, KYC, and disbursal while providing deep analytics and precise control. We also have a no-code business rules engine called Sentinel that empowers lenders to define, manage, and execute credit workflows in real time using AI and analytics, significantly reducing fraud and operational costs.

For underwriting, which is another core offering of our business, FinBox’s DeviceConnect, an in-device, alternate data-based risk engine, helps enhance risk assessment and underwriting accuracy, especially for new-to-credit customers. Additionally, BankConnect + Account Aggregator is our automated bank statement analyzer that detects fraud and extracts insights on borrower salaries, obligations, and spending patterns, fully integrated with the Account Aggregator framework for seamless data access. Additionally, BureauConnect fetches borrower data from multiple credit bureaus, presenting it in a standardized format to enable precise risk assessment.

Together, our diverse range of products creates a robust and intelligent credit ecosystem that not only helps lenders optimize decision-making, mitigate risks, and enhance efficiency across the lending lifecycle, but also sets us apart in the industry. Our ability to seamlessly integrate alternative data and automation into every stage of the credit journey—from onboarding and underwriting to disbursal and monitoring ensures flexibility, speed, and scalability, empowering lenders to innovate rapidly, reduce fraud, and unlock new customer segments with precision.

ET: What is the technology behind FinBox that allows it to be in business and how was it developed?
RD: FinBox works on the most cutting-edge technology and development stack taking advantage of the developments in cloud computing, AI, and micro-services. The company utilizes a combination of various technologies for different products. All the products are completely built ground-up and in-house with a focus on speed, compliance, and effectiveness.

ET: How do you help arrive at a lending decision for an individual? How does FinBox carry out background checks?
RD: Lending decisions are technically made by the banks and the NBFCs disbursing the loans. FinBox works as a technology and analytics service provider and supports them with deep analytics about the borrower’s 360-degree financial profile, their credit history, their intent, and ability to pay. This analytical powerhouse is built upon data extracted from the 360-degree financial profile of the user and then trained on precise AI and ML models. These outputs are available as nifty scorecards which are integrated into automated systems and instantly assess borrowers and provide a go-no go decision.

ET: How big is the size of your products and solutions? How do you plan to expand in the future and what are your plans?
RD: FinBox touches the entire lending lifecycle through its various products and solutions. Given that we are lending-technology partners for almost all of India’s largest banks, NBFCs and FinTechs–our impact footprint is very big. As per recent data, we have been clocking more than Rs 1500 crores in loan disbursals that are facilitated through our products. This is a testament to both the growth of the digital credit space in India and the efficacy of our products, which enable even large organizations to scale up at the speed of a FinTech startup.

Our growth strategy is driven by two key expansion avenues. First, we empower lenders to enable loans both on their own platforms and across marketplaces, allowing them to seamlessly launch a wide range of credit products—from personal and business loans to working capital financing and equated daily installment offerings. Secondly, our growth will be powered by continuous product innovation and the scalability that lenders and platforms achieve as they expand their market presence, enhancing their reach and impact in the credit ecosystem.

In parallel, we are continuously working towards developing new product lines and platforms that address a broader range of challenges faced by lenders and enterprises in this space. As these solutions evolve and mature, our organization's growth trajectory will shift from linear to exponential. For example, we recently launched a Partnership Lending Stack 2.0 (PL Stack 2.0) that will enable banks, NBFCs, and financial institutions to streamline partnership-driven lending and launch embedded lending products in weeks and have already powered Rs 400 crores in monthly disbursals.

ET: What does the credit market in the country look like now?
RD: India’s credit space is currently one of the hottest in the world. We are seeing double digit credit growth year-on-year across loan products. Be it personal loans, consumer durable loans or even secured products like home loans etc–there's immense growth and even more potential. This is because of improved access to credit due to digitization of the economy as well as due to the rise of an aspiration class that seeks to consume world-class products and services.

ET: How does your platform help empower under-banked and new-to-credit users with frictionless access to credit?
RD: The core thesis behind FinBox has always been a goal of solving for financial access and inclusion. One of the major ways in which we help enable this is by empowering even new-to-credit or thin file borrowers to avail formal credit. We do this through our data products such as DeviceConnect that help generate an alternative credit score for borrower's basis their device, usage as well as other financial and behavioural indicators. This score is often more effective than just bureau scores and works for consumers who don’t even have a bureau score.

So far, products such as BankConnect and DeviceConnect have each helped facilitate millions of loans to new-to-credit customers and thus, increased our impact in improving access to frictionless credit for the unbanked population.

ET: The RBI has recently cautioned about unbridled and unchecked lending. How do you respond?
RD: The Reserve Bank of India is a firm but fair regulator. And they have been cautioning about over-leverage for a while. The regulator is rightly concerned about a situation where lenders blindly chase credit growth. However, we see it as a positive for the industry as the lenders are now able to use tools, technologies and advanced analytics to not only underwrite customers better but also monitor their financial wellbeing, which helps reduce NPAs in the long run. In fact, we have seen a lot of lenders who work with us benefit from FinBox offerings such as our data products and Account Aggregator to ensure that they are offering the right amount of loans to their borrowers and structuring them to optimize for on-time repayment and not overburdening the borrowers.