The Reserve Bank India (RBI) has revolutionized India’s lending ecosystem by launching the Unified Lending Interface (ULI), a secure, centralized platform that streamlines access to financial data for lenders. Powered by WSO2’s API Management and Identity solutions, the initiative has significantly reduced loan processing times from up to six weeks to just a few minutes, marking a major milestone in India’s financial sector.
Lenders in India were grappling with the challenge of accessing both financial and non-financial data needed for making informed decisions in the digital credit space. The challenges of multiple siloed data sources scattered across entities such as Central and State government authorities, Fintechs, Techfins, Account Aggregators, Credit Information Companies, and Digital Identity Authorities, led to lenders having to individually connect with each data source. This made credit underwriting highly cumbersome, time-consuming, and costly, giving rise to operational inefficiencies and hindering seamless digital lending.
Recognizing these challenges, RBI and Reserve Bank Innovation Hub (RBIH) aligned their efforts with India’s broader Digital Public Infrastructure (DPI) initiatives. This move aimed to build a more interconnected financial ecosystem, one that supports innovations like embedded finance, AI-driven lending models, and real-time decision-making—transforming the way credit is delivered across the country.
Leveraging WSO2 API Manager and WSO2 Identity Server, RBIH was able to
- Cut down loan processing time from 4-6 weeks to a few minuteswith the integration of real-time data across varied sources and automated workflows significantly reducing the time consumed for loan processing
- Establish a unified all-encompassing platform,eliminating the need for individual, complex connections with various data providers and minimizing operational costs and complexity
- Bridge the financial gap for underserved communitiesby leveraging alternative credit data beyond traditional credit scores and fostering greater financial inclusion
- Implement a simplified and seamless user onboarding processby enabling hassle-free self-registration, making it easier for underserved communities to access lending services
- Leverage analytics for actionable insights into user behavior,allowing RBIH to fine-tune the platform for better user experience, spot trends in usage and facilitate informed data-driven decisions
- Reinforce data security and compliance with secure API traffic management and encryption, ensuring all borrower data is handled safely, while adhering to data protection regulations
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