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  • Writer's pictureAbhijit Shankaran

Direct Assignment Business: Overcoming Multi-formats Challenges

Investors/Buyers such as Banks play an important part in the Direct Assignment business by acquiring loan portfolios from various originators such as NBFCs and Banks.


Investors gain from Direct Assignment businesses by being able to Scale/Expand their current business and meet priority sector obligations by purchasing priority sector loans from originators and further mitigating risks, managing liquidity and the transfer of credit risk.


While originators oversee the operational aspects of loan servicing, investors play a significant role in shouldering credit risk. Investors are required by the RBI to mirror account management, giving an important element of transparency to their activities.


Managing data across a range of deals and originators becomes a focus element, necessitating information accessibility in a cohesive and readable manner. This process, however, presents a considerable problem since loan originators give loan data in a variety of forms, ranging from Excel files to CSV (Comma-Separated Values) files and databases.



A man walks through a room with cables connected to his computer. He is upset having to deal with managing multiple formats such as XLSX and CSV.


Let's view the 3 significant points that emphasize the effects of various data formats for investors.


1) Operational Efficiency


Converting loan data from diverse originators into a uniform and desired format presents a substantial issue for investors. This manual translation procedure can be time-consuming and resource-intensive, reducing the investor's overall operating efficiency. The requirement to communicate with data creators to simplify data formats adds an extra layer of labour and resources. Investors, hence, lose time and resources in going back and forth with different parties to arrive at the required data format which hampers operational efficiency.


2) Risk Management


The variety of ways in which loan data is displayed raises the possibility of inaccuracies, discrepancies, and misinterpretations. Investors who rely on precise and consistent data to assess risk may have difficulties in maintaining the necessary degree of data quality. As a result, the accuracy of credit risk evaluations and decision-making may suffer.


3) Regulatory Compliance and Reporting


Compliance with RBI standards, including account closing demonstration, is critical for investors. The various data formats given by originators may make satisfying these regulatory requirements efficiently difficult. Investors must verify that the data, once transformed, adheres to the precise reporting criteria established by regulatory agencies, complicating compliance efforts.


SIMSMART resolves Multi-Format Challenges


Addressing these challenges, SIMSMART is a fully automated system designed for the precise recording and administration of direct assignment negotiations from the buyer's perspective. The design is intended to improve the Assignee's operating efficiency while complying strictly with legislative standards. SIMSMART considerably minimizes the possibility of mistakes associated with processing varied data formats by reducing the dependency on manual data conversion. Notably, the solution allows for the dynamic mapping of numerous files and fields in compliance with diverse Originator criteria. This comprehensive feature streamlines data integration and guarantees smooth communication between the stakeholders involved, contributing to a more efficient and secure transaction process.


Conclusion: Direct Assignment Business Simplified


The incorporation of cutting-edge technologies such as SIMSMART paves the way for a more streamlined, efficient, and compliant future. Investors can confidently traverse the hurdles of data management, guaranteeing a smooth and safe transaction procedure in this volatile business climate.


 

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Major Benefits for Buyers/Investors 1. End-to-end process Flow Coverage

2. Efficient Tracking of Multiple Deals

3. Customizable Pre-deal Characteristics

4. Mapping Multiple Files and Fields

 

About SIMSOL


SimSol your trusted partner in B2B banking solutions, pioneering technology solutions in the lending business, invites you to experience the Future of Banking technology! We are an ISO/IEC 27001:2013 certified organisation and specialize in providing world-class solutions for the following and are committed to ensuring attractive ROI on the investments.

  • Business Process Management

  • Enterprise Resource Planning

  • Business Intelligence

  • Knowledge Process Outsourcing

 


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