The journey towards a predictable pulse of your bank/NBFC (and the country)
This article was initially published here https://www.linkedin.com/pulse/journey-towards-predictable-pulse-your-banknbfc-country-shivram-dega/
FDNex: A secure, standardized, shared, distributed data platform
The recent developments in the Indian banking industry about increasing Non-performing Assets (NPAs) has been worrisome. Also, the liquidity has been dried up, and this has hit hard on the NBFC sector who are finding it tough to raise debt from the banking institutions which in a way are following the suit followed by the Central Banking Institution and fellow institutions which are on a preventive course of actions. The more harrowing part is, how many more NPAs are within the closet and undisclosed. Well, this is a tough question.
The current difficult situation of increasing NPAs and NBFCs Squeezed for credit begs a simple question that seems to have been forgotten:
Isn’t there a need to be secure the financial future of the country, in predictable ways?
Consider the weather forecasting system. Where the forecasting is done by continually analysing the data from different weather satellites. Similarly, we can predict the future of the financial ecosystem by having a secure standard data platform that gets fed by verified/audited data from all financial institution in near real-time or even hourly. This verified data then can be used by the central banking institution to analyse and predict the financial health
Being a techie and an avid promoter of tech in finance, I have tried to throw my hat in the ring. This setup can be done by using a bottom-up approach. Every institution can set up a trusted data sharing mechanism/infrastructure described in this white paper (FDNex) with auditors. This audited/verified data in-turn can be fed to a data platform of the central bank. The paper gives a high-level view of the implementation of the Loan management system (LMS) data being shared, a particular use case. This system can be extended to share any other data needed to facilitate a birds-eye view of financial health for the central banking institution. This can be achieved without much hassle by standardisation of data formats and data sharing protocol.
If you are head of banks/fintech lenders, you can connect with me for further details on implementations.
If you are from the central bank (RBI or of any country) and want to propose/implement standardisation of such a system in the ecosystem, I can help you.
If you are from an auditing firm and want to have a robust way to audit and implement controls yes, I can help you.
If you are someone who wants to add to it, your welcome.
Others share it, please.
*Link to the whitepaper: http://paper.fdnex.net/ *