Revolutionizing Digital Lending: Shivani Tayal on Innovation in Loans Against Securities

In this insightful interview, Ms. Shivani Tayal, co-founder of Lark Finserv, shares the inspiration behind launching a fintech company focused on Loans Against Securities (LAS). Lark Finserv offers a digital-first approach to lending, ensuring quick, secure, and transparent processes for borrowers. Ms. Tayal discusses the innovative technology behind the platform, its expansion into Tier-2 and Tier-3 cities, and the company's commitment to regulatory compliance and customer satisfaction. She also provides valuable advice for aspiring fintech entrepreneurs looking to make their mark in the lending space.

StartupTalky: What inspired you to co-found Lark Finserv, and how did your background in finance influence the company’s vision?

Ms. Tayal: The inspiration for founding Lark Finserv emerged during the COVID-19 pandemic when I saw individuals and businesses facing liquidity crises despite holding valuable securities. At that time personal loans and credit lines also became less accessible due to stringent lending standards. This is when I felt the need for Loans against Securities as a viable alternative.

Coming from a finance background, I had a deep understanding of the financial markets. This helped us design a lending solution that is not only quick and innovative but also safe and reliable.

Our network with people in the industry has helped the company to form strategic partnerships and stay informed about the trends.

StartupTalky: How does Lark Finserv’s technology streamline the process of providing Loans against Securities?

Ms. Tayal: Our platform is built with the user in mind, offering a seamless and transparent experience from start to finish. We have reduced the approval times from days to minutes. Borrowers can apply for loans from the comfort of their own homes, offices, or any location using our interface. We’ve removed the need for physical paperwork, replaced it with a completely digital journey, and provided clear, upfront information about terms and conditions. This level of convenience and transparency is something that traditional lenders have struggled to match.

StartupTalky: What are the key features of Lark’s digital platform that enhance the user experience?

Ms. Tayal: We, at Lark, offer a completely digital journey starting from the onboarding process for customers. By using e-KYC and digital document verification, pledging, e-mandate, and e-sign Lark Finserv eliminates the need for physical paperwork, reducing the time required to onboard new clients from days to just minutes. Our technology allows for real-time fetching and pledging of securities that customers wish to pledge as collateral. Our platform enables instant disbursal of funds. This is achieved through integrations with banking systems and payment gateways, ensuring customers receive their loans quickly without unnecessary delays. Our digital platform is accessible, anytime providing customers the flexibility to apply, track, and manage their loans.

StartupTalky: How does Lark Finserv ensure the security and privacy of financial transactions on its platform?

Ms. Tayal: We at Lark, implement strong encryption protocols to protect data as it travels between the borrower’s device and our servers. Regular security, audits and vulnerability assessments are conducted to identify and mitigate potential risks. We secure all APIs used in our platform with strong authentication, rate limiting, and secure communication channels. 

StartupTalky: What differentiates Lark Finserv’s LAS from traditional personal loans in terms of interest rates and liquidity?

Ms. Tayal: Personal loans being unsecured loans have high rates of interest as they carry a higher risk of default. LAS typically offers lower rates compared to traditional personal loans as is collateral-based lending. The presence of collateral reduces the lender’s risk.

Personal loans typically take longer to process because they require a thorough credit check and assessment of the borrower’s creditworthiness whereas LAS provides faster access to funds as the loan is backed by liquid assets that can be easily valued and used as collateral. Lark Finserv’s LAS allows the borrower to leverage his securities within minutes.

StartupTalky: What specific growth metrics has Lark Finserv achieved, including loan disbursal rates and expansion across Tier-2 and Tier-3 cities?

Ms. Tayal: Lark Finserv has enabled seamless onboarding and processing for customers all over India. This has reduced the need for physical visits and paperwork, making it easier for customers to access loans and other financial services from the comfort of their homes. Understanding that many customers in Tier 2 and Tier 3 cities primarily use smartphones to access the internet, Lark Finserv has optimized its platform for mobile use, ensuring a smooth and user-friendly experience.

Lark Finserv's expansion into Tier 2 and Tier 3 cities has been a significant milestone in broadening its customer base and increasing financial inclusivity. We have more than 500 partners from these cities. Approximately 30% of the cases processed by Lark are from Tier-2 and Tier-3 cities.

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StartupTalky: How does a user secure a loan against securities through Lark Finserv, from application to disbursal? 

Ms. Tayal: Securing a loan from Lark Finserv involves 6 steps from application to disbursal. 

1. Starting from the application where the borrower provides his, name, number, and PAN number.
2. Then he does his Digital KYC.
3. Fetching the Securities from RTA’s.
4. Pledging the securities.
5. E-Sign
6. E-mandate 

Once the e-mandate is signed, the client gets the sanction immediately and the loan amount is credited to the borrower’s account in 2 hours.

In Lark’s digital journey, One-Time Passwords (OTPs) play a critical role in ensuring security and verifying the identity of the user at various stages. 

StartupTalky: What measures does Lark Finserv take to comply with regulatory requirements and industry standards?

Ms. Tayal: We adopt a comprehensive approach that ensures legal compliance, protects customer interests, and maintains operational integrity. We strictly adhere to the RBI guidelines.

We aim at transparent disclosure of terms and conditions related to the securities used as collateral, regular reporting of financial statements, customer holdings, and other relevant data to the regulatory body.

StartupTalky: How does Lark Finserv collect and incorporate customer feedback into its service offerings?

Ms. Tayal: We, at Lark, understand the importance of customer feedback for continuous product and service improvement. To capture a comprehensive view of customer experiences, as LAS, we offer various channels for customers to provide feedback. We train customer service representatives to solicit feedback during interactions. This is done at the end of a call or chat session, asking customers to rate their experience or provide suggestions for improvement. We are embedding feedback forms directly within the company’s digital platforms allowing customers to provide feedback while interacting with the service. We ensure that based on the client feedback, we keep on improving the product and the service.

StartupTalky: What is your vision for the future of digital lending in India, and how do you see Lark Finserv contributing to this evolution?

Ms. Tayal: India has a $1 trillion lending opportunity against digital assets. Growing financial literacy among the Indian population is increasing the acceptance and understanding of digital financial products. The digital lending market in India is expanding rapidly, with ample opportunities for innovation and growth.

At Lark, our vision is to enable credit against securities through a dynamic digital lending platform, ensuring financial empowerment and inclusivity for all. 

Lark Finserv shall continue to be at the forefront of digital lending enhancing its digital platforms with AI-driven personalization, user-friendly interfaces, and seamless customer journeys. By focusing on innovation and customer satisfaction, we will remain competitive in the ever-evolving market.

StartupTalky: What advice would you give to aspiring fintech entrepreneurs looking to enter the lending space?

Ms. Tayal: Entering the fintech lending space can be both exciting and challenging. Due to digital transformation, the LAS market has seen significant growth. Technology has made it easier to evaluate, process, and manage loans against securities online. While digital lending presents significant opportunities, it also comes with a range of challenges that require careful management and strategic planning. Addressing these challenges effectively involves leveraging technology, adhering to regulatory requirements, maintaining high standards of data security, and focusing on customer experience and trust.

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