Nowadays, private institutions are keeping pace with the prestigious government educational institutions. Lots of private institutions are offering relevant disciplines that are required to stay ahead in the competition, and students are not holding back from opting for expensive courses. Not everyone can afford these courses due to their current financial constraints.
Financiers, especially in the non-banking sector (NBFCs), have come forward to help with their financial solutions tailored to help students who need it. This step could be a game changer in the long run for giving a chance at quality education to an increasing number of talented but financially weak students.
The potential of this untapped market is now being realised by the finance sector, and with the advent of AI, streamlining projects relevant to this idea has become much easier. Let us now have a look at how AI has been instrumental in the new lease of life in the non-banking sector.
AI-led development of the finance sector
AI has undoubtedly been called a phenomenon in recent times. The innovation that has stemmed in a plethora of industries with the application of AI is unbelievable. From creative arts like cinema to serious medical procedures, several operating processes are now being enhanced by the use of AI.
In the finance sector, it is difficult for big financiers like banks to immediately use AI because of the strict procedural regulations they adhere to. The non-banking sector, however, is largely free from such travails and thus can have a free hand at experimenting with AI. To stay abreast of recent developments, it is safe to say that the experimentation stage is moving fast with reassuring steps towards fruitful implementation.
Credit-risk evaluation
The basis for understanding an individual’s creditability is a clear idea about his/her current financial status. Till now, this understanding was largely based on a model that depended on credit scores. Although credit scores give financiers some of the picture, it conceals a great deal more. AI can process more complex data, delving deep into the financial history of an individual seeking an educational loan, thus making itself an instrument of the new digital revolution.
All such invaluable data is made available to the lending entities at the command of their fingertips, along with other related data such as the social behaviour of the person concerned.
Thus, transactions are made more transparent, and loan requests are processed at a breakneck speed, which is characteristic of AI. As a result, the non-banking sector can look forward to a wider client base covering all social classes and beyond the urban clientele.
The underprivileged students who had until now been cut off from the mainstream and are not able to access the banking facility can be truly empowered if AI can be appropriately used to that end.
Personalised student services
More importantly, AI-led services can provide personalised services, which can help students in several ways. Students come from different academic backgrounds and choose from a diverse range of courses to enrol. The financial demands of such courses are not the same, thus making the one-size-fits-all model of the banks redundant.
The non-banking sector has the potential to fashion its financial products according to the courses opted for by students. Following such a course would mean that the students from the arts stream do not have to apply for a huge loan that is meant to cover the cost of more technical courses. Also, since AI can find out and verify a lot of data on a person, the loan policy can also be made to better suit both the financier and the client.
Data-driven advancement
The best part about AI-led financial services is that they can be made to adapt to the changing scenario of the market. The market conditions inform the government guidelines directed at financiers, who must then follow the rules.
This workflow can be frustrating because a non-banking financial entity might be in the middle of a brilliant project, which must then be stopped owing to red tape. However, using AI for market research can help these financiers stay one step ahead and design their projects to suit the changing market conditions.
Furthermore, the courses offered by the institutions are ultimately aimed at producing more competent, market-ready candidates. The AI-driven market research can anticipate these trends in advance and help the NBFCs to stay ahead of competitors with respect to creating suitable financial solutions for students.
Conclusion
Thus, it can well be understood that the presence of the non-banking sector in the online marketplace can be significantly strengthened with the use of AI. Furthermore, a judicious application of the same in product building will ultimately help the sector to rely less on external sources of revenue. As a result, these financiers can focus on devising financial products that actually help bridge the gap between finance and quality education, which has the potential to change the lives of millions of students for the better.
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Anna Wong serves as the editor of the Chiang Rai Times, bringing precision and clarity to the publication. Her leadership ensures that the news reaches readers with accuracy and insight. With a keen eye for detail,
