Capri Global Capital is a prominent non-banking financial company in India, known for offering a wide range of financial services to organizations. To enhance its digital transformation and drive optimal growth, Capri Global deployed Oracle's cutting-edge products. This strategic move reflects Capri Global's commitment to leveraging technology to streamline operations, enhance customer experiences, and stay competitive in the ever-evolving financial landscape. On the side-lines of CloudWorld Tour 2024, Rajeev Ranjan, Editor of Digital Terminal, conducted an exclusive conversation with Varun Malhotra, CTO of Capri Global Capital Ltd. This interview delves into all aspects of their partnership and exemplifies the outcomes of embracing digital transformation.
Rajeev: Could you share some insights into Capri's vision and the current developments within the company?
Varun: With over two decades of experience in the mortgage business, we offer a wide range of products, including traditional home loans, MSME loans, and newer options like gold loans. Our vision is centered around leveraging technology to add value to the entire ecosystem and value chain. The mortgage industry has evolved significantly, but certain pain points persist, especially regarding customer service, particularly for those outside tier-one cities.
Traditionally, obtaining a loan involved cumbersome processes, such as creating large physical files with extensive documentation. However, the technological ecosystem has revolutionized this landscape. New technologies emerge regularly, and there is a constant stream of initiatives from the government and regulators to support these advancements.
Our focus in recent years has been on harnessing this technological ecosystem to drive change and enhance the efficiency of our value chain. This includes improving processes for internal stakeholders, such as relationship managers and credit teams, as well as enhancing transparency for our customers.
Rajeev: How are you working with Oracle to deploy cutting-edge technology solutions in order to ensure smooth operations?
Varun: I will cover it in two phases. First, the traditional approach in the industry has been to adopt pre-built solutions from software giants, customize them for banking partners' processes, and then serve customers. However, this model has inherent issues. Banks depend on external agencies to modify code and release updates, leading to delays. Vendors also struggle with talent acquisition, a challenge in the tech industry, especially in India.
Second, the impact of this approach limits how quickly banks can leverage the ecosystem and innovate. To address these challenges, we have shifted to a "build and buy" model. We buy essential solutions, like Oracle Flex Cube for our loan management system, and build our in-house loan origination system called Swarnim. This shift has brought significant changes. We can now release major updates monthly, enabling rapid business growth. Our gold loan business, for example, now contributes 6% of our AUM, achieved at less than 50% of the previous cost. This increased agility has not compromised governance or risk management. Additionally, our new ecosystem allows us to adopt global innovations more easily, enhancing competitiveness.
Rajeev: What were the major challenges you faced before migrating to Oracle Flex Cube?
Varun: The typical journey of migrating from one solution to another begins with evaluating the options available in the market. We conducted a series of what-if analyses to anticipate future business needs, such as doubling our business in the next two years or adapting to regulatory changes. For instance, when GST was introduced, many software solutions had to be updated, highlighting the importance of being agile in response to regulatory changes.
After careful planning, we chose Oracle Flex Cube as our new solution. We then meticulously planned the implementation, considering regulatory requirements and customer servicing processes. For example, in our gold loan business, we have streamlined the process so that customers can get their loans approved within 30 minutes. We leverage technology for quick collateral assessment and E-KYC checks, providing a seamless and efficient experience for customers.
In terms of customer servicing, we use analytics to nudge customers about upcoming EMIs and provide transparent updates on their loan application status through our Capri Loans app. This empowers customers to track their applications and interact with us seamlessly, enhancing their overall experience. Through these technological advancements, we aim to make our customers more self-reliant and provide them with exceptional service.
Rajeev: How has been the overall results so far after deploying the solution?
Varun: In the gold loan business, the price of gold fluctuates frequently. For example, the price was 65,000 sometime back, but it has since decreased. However, despite the decrease in the gold price, customers who have mortgaged their gold with us continue to have that collateral with us. Some customers may have also paid off certain EMIs.
In this scenario, there is an opportunity to offer a top-up loan to customers if the price of gold increases. This opportunity is a good indicator of the confidence we have instilled in our customers. When we offer a top-up loan, it shows that we believe in the value of their collateral and are willing to provide additional funds based on that belief. The number of customers who take up this offer is a key marker of customer confidence. Customers have the option to either continue paying EMIs and maintain their relationship with us or plan for an exit by redeeming their collateral, which provides them with flexibility and choice in managing their finances.
Another important aspect to highlight is our focus on automation. After a customer takes a loan, it needs to be reported to a credit bureau, requiring the creation of IDs for customers. We have automated this process for our Operations Team, reducing their effort by more than 70%. The system now efficiently handles green cases that require minimal human intervention, leaving only 20-25% of cases that need human input. This automation has significantly improved operational efficiency and allows our team to focus their energy on cases that require more attention.
Rajeev: What has been your experience working with the Oracle team during migration?
Varun: My experience with Oracle while deploying the solution has been fantastic. As a technocrat, I appreciate when service providers manage key aspects like security and Cloud infrastructure effectively. Oracle Cloud's infrastructure is built with these fundamentals in mind, creating a synergy that aligns with my expectations. Transitioning from managed to unmanaged services has been a positive paradigm shift, saving a significant amount of effort in managing infrastructure.
Looking ahead, I foresee a substantial adoption of AI in the near future. There are numerous compelling use cases emerging, and the ecosystem is open to innovative ideas. I'm excited about the creative possibilities AI will bring and look forward to seeing its impact unfold.
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