Digital Lending and Its Financial Implications: Insights from Indian Commercial Banking Sector
DOI:
https://doi.org/10.24113/ijoscience.v10i1.536Keywords:
Digital Lending, Indian Banking Sector, Financial Inclusion, AI in Banking, Credit Risk Management, Operational Efficiency, Customer Satisfaction, Financial Technology (FinTech), Regulatory ComplianceAbstract
Digital lending further transformed the Indian banking sector through accelerating economic growth. It is realized in terms of operational efficiency, reduced costs, and customer satisfaction. Leveraging AI, ML, and big data, digital platforms have streamlined critical processes such as loan origination, credit scoring, and risk management. Innovations therefore bridge the financial gaps-the greater concern being for the underbanked populations- and therefore promote broader inclusion into finance. Despite its transformative potential, the adoption of digital lending also poses some challenges, such as data privacy concerns and the need for appropriate regulation. It involves a comparative analysis of digital banking methods with traditional ones in terms of efficiency, cost structures, and customers' perception of the same. Findings show that digital lending enhances profitability by aligning Indian banks with international benchmarks on technological advancements and increasing their ability to change the course of the banking industry. The findings bring out both the need to push digital innovations and to mitigate risks that accompany them for sustainable growth.
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