Gold Loan future with Digitalization
Mr. Priyank Kothari, Director of Arvog
The gold financing segment in India has been countersigning a substantial revolution in several aspects, from a steady shift to the organised and formal sector to digitalisation and the advent of online products. Gone are those days when the Gold loan was considered as a conventional mode of transaction where-in borrowers were required to visit the branch for every occasion like disbursement, application of loans, interest payment, loan closure and taking the pledged valuables in custody.
With the novel era and transformation of digitalization, life has now become convenient. Digital space with its online facilities has offered an exceptional experience to users wanting to take advantage or are prevailing customers of Financial Institutions. With the pandemic presenting its own set of challenges in the last few years, most of us have suffered in some form or the other. For many, particularly the low-income households, unbanked customers,
MSMEs and SMEs, gold has emerged as a safe haven, when big institutions and banks held onto their purses. Thus, the demand for gold loans has been steady even in these challenging times, and we anticipate the momentum to endure in the upcoming years too.
Nevertheless, pandemic has also quickly surged the process of digitisation across sectors, and the gold loan financing sector was no exception. The consumer expectations are high and it is up to the lenders to prudently utilize the available technology at their disposal and
revolutionize to meet customer demands. Super apps and other virtual innovations like availing loans and other banking facilities within the confines of one’s own home, which previously involved heaps of paperwork and branch visits, have been on the rise.
Technology and block chain are not just hot trends in the market, but they are bound to have an impact across sectors and industries, too, encompassing the gold loan industry. Digital gold, and gold in the form of ETFs, SGBs and gold-oriented mutual funds, have witnessed a speedy upturn in investments, chiefly among millennials.
When it comes to aspects like purity of gold, absence of designing valuations, uniform pricing and a much more flexible way to capitalize, digital gold definitely has an upper hand. Additionally, customers who are sceptical can also invest in digital gold in much lesser quantities, to test the waters before they can take the decision of making a bigger commitment.
The future of the gold loan industry is related to further digital integration of technology and new innovations. In India, the use of digital wallets and online payment options like UPI have drastically increased. In the future, products like gold-secured credit cards and gold
wallets are likely to enter the market, too. In fact, many players had earlier introduced a card facility and are working towards relaunching the same in the near future. Lately, many fintech players, mobile e-wallet companies and brokers, have introduced gold wallet facilities for their customers, enabling them to purchase certified and pure 24-karat gold. Buyers today are also able to make fast and easy money transfers and acquire hassle-free micro-loan services within no time.
The industry players are also coming up with ground-breaking solutions, and there is a continuous requirement to keep pace with the advancing technology. These include digital innovations like online disbursement, online transaction access through web link, mobile application, online and door step gold loans to name a few.
The digital space has been fast transforming and in the coming years there will be a lot of advanced techniques which are customer centric and have appropriate controls over the process and operations at the backend. It won’t be wrong to state that cutting-edge Banking
systems or Loan systems have given a much needed exposure to finance companies and reach to deeper sections and areas where physical reach was not possible with limited presence.
The digital journey has been nothing short of a revolution in the banking system and this would go on by adding a lot of new products and offering making life simple and adding pleasant experience to the end users investment journey.