TVS Credit E.P.I.

C - Season 5 Strategy Case Study

Building an NBFC of the Future – Leveraging Generative AI

Introduction:
The presence of TVS Credit goes far and wide, spanning the largest cities of urban India to
the smallest villages of the country, bringing products within easy reach for people
belonging to various walks of life. As Indians from varied socio-economic backgrounds set
out to write their growth story, the company’s timely and affordable credit empowers them
to realise their dreams and see them come alive.

The Beginning:

In November 2008, an entity called TVS Credit Services Limited was formed as a captive
financing arm of TVS Motor, under the leadership of Mr. Venu Srinivasan, the man credited
with changing the face of the two-wheeler industry in India.

TVS Credit: A 12-year journey with unique challenges, customised strategies, and focused
milestones

2008 – 2010: Launch of Two-Wheeler Loans and Identifying Niche Target Segments:

In 2008, at the time of the global financial crisis and market recession, most retail financiers,
including the market leaders in India wound up their operations. On the contrary, TVS
Credit set foot in the retail financing space with a renewed focus and resolve. The company
addressed dealer and channel partner morale as their first priority. The main focus was to
establish themselves with the dealers who weren’t trusting financiers. An N=1 strategy was
adopted to design the value proposition for every individual dealer.

Secondly, the company decided to focus on a specific customer segment. Most lending
companies focused on the salaried class as they were a safer bet to lend to, since they had
fixed incomes. On the contrary, TVS Credit decided to focus on the self-employed,
non-metro and new-to-credit customers, since large players were neither present nor willing
to be there. The company decided to focus on towns with a population of less than one lakh.
The team also chalked out the white spaces amongst the customer segment identified. They
noted that customers who wanted to pay in cash due to lack of access to banking facilities
were being turned down by other financiers. The company began to lend to such customers
by developing a strong system of checks and balances.

2010–2018: A journey from being a Captive to a Multi-product Financier:

From 2010, the company began its shift from being a product-focused company to being a
customer-focused company. With a firm foothold in the Two-Wheeler loans business, TVS
Credit continued to finance TVS Motor two-wheelers. However, it was now time to look at
ways to support the customer with his financial requirements across his various life stages.
This was also an important step towards reducing the dependence of the company’s growth
and stability on a single product.

The plan was to launch one new product every year and stabilise one existing product. In
several cases, once a person purchases a two-wheeler, he/she looks to upgrade to a car to
give their family a better experience. Hence, the company set up the Used Car loans business
in 2013. Once the two-wheeler financing business was on a firm footing, the company began
financing tractors manufactured by TAFE, given the adjacencies in the business model.
Upon stabilising the two new businesses, the Consumer Durable loans business was set up
to ensure that the middle-income self-employed population inches closer to their aspiration
of upgrading their homes. The Used Commercial Vehicle Loans business was initiated in
2018 to finance the commercial vehicle ecosystem. In the same year, Business loan products
were also started to cater to entrepreneurs from Tier 2 and Tier 3 locations. In 2020, the
company launched the InstaCard programme which offered customers a continuous credit
line. With the launch of every new product, the customer base grew and as of today, the
company has served more than 10 million customers.

The company’s portfolio now includes:

● Two-Wheeler Loans
● Used Car Loans
● New and Used Tractor Loans
● Consumer Durable Loans
● Used Commercial Vehicle Loans
● Business Loans
● Three-Wheeler Loans
● InstaCard Programme
● Personal Loans (only for existing customers)
2018 onwards – Technology Wave: Changing the face of the Industry
In recent years, the technology wave and analytics-driven decision-making have taken the
lending industry by storm. One of the challenges that came as an opportunity is the
emergence of FinTech players, who are backed by deep machine learning and AI
capabilities. This was indeed a wake-up call for the NBFC segment. Companies with older
models had to learn to disrupt their models from within or co-opt new-age players through
strategic partnerships or tie-ups. All this meant better access to customers, leaner operating
models, and speed of delivery at a very different level.

Since the company’s focus markets exist in smaller towns, having feet on the street is an
expensive proposition. The only way to offset this is with the use of technology. The bulk of
the company’s customers are also ‘New to Credit (NTC)’, i.e. they are first-time borrowers.
This makes the job of credit assessment highly challenging. To manage this, Analytics has
become a major focus area over the past three years. In order to achieve differentiation, the
company has built an independent IT arm within the company so that it can leverage
analytics to cross-sell and up-sell.

The company understands that technology is a great leveller in the present-day context, i.e. a
seemingly cutting-edge technology rarely maintains its edge for more than a few months,
since competitors catch up soon.

Going the Extra Mile for every Customer – Customisation to the Truest Sense

A Unique Selling Proposition has been the success mantra for every product in the portfolio.
The focus on the end-user is so high that, in the Commercial Vehicle financing business, TVS
Credit not only finances the vehicle but also the consumables, fuel, toll charges, maintenance
expenses, tyre changes etc. It is to ensure that the customer feels really cared for at every
point in his business cycle. Flexi-payment schemes for tractor customers help align their
repayment with their cropping cycles.

Building the Brand in the Digital Age:

As the company shifted from captive financing to non-captive financing, customer

acquisition was one of the biggest challenges. To enhance service quality and minimise
friction every time a customer transacts, the company relentlessly focused on the use of
technology to create platforms to smoothen the operations and create a seamless experience
for its customers. For example, the company has an online credit engine – where the
customer can upload his documents and get a conditional sanction letter.

The company has significantly focused on improving the customer and dealer experience
across all product journeys by enhancing system capabilities. This has significantly reduced
customer wait times, boosting dealer efficiency and conversions. Going forward, the
Company is focusing on unifying the journey for the customer across all products.
The company strives to create the best-in-class user experience for its customers and channel
partners through digital assets like the TVS Credit Saathi app, which has been made
accessible in six vernacular languages. Besides, we are becoming a multi-level organization
through a strategic financial expansion by way of horizontal-isation of our financial services.
This pivotal event not only expanded the company's product offerings but also incorporated
several critical activities aimed at enhancing the brand's visibility, thus adapting and
growing in response to changing market dynamics and customer preferences.

Strong brand-building initiatives were also taken up by the company to drive awareness and
consideration, leading to customer acquisition. Some of the impactful brand awareness
initiatives include ambient branding at dealerships and BTL activations like Pragati Parv
amongst many others. Social media campaigns such as #SidAndPoo have contributed to our
transition to a Direct-to-Consumer (D2C) brand, as we introduce more D2C products. Our
strategic focus revolves around catering to the new generation of consumers. To align with
this strategy, we have adapted our content creation approach to resonate effectively with
these target demographics.

Emergence of Generative AI: Revolutionising the NBFC Sector

In a world where technology and the digital ecosystem reshape our industries, the
emergence and rise of Generative AI stands as a testament to the potential benefits and
upside of artificial intelligence and related technologies. The ability to integrate AI
technology into existing workflows, that has the capability to match human creativity, often
to the point of being virtually indistinguishable and inseparable, opens new avenues of
possibilities and development.
Source: AI adoption in Indian financial services and related challenges – PWC & FICCI

In summary, the Indian BFSI industry is embracing AI and related technologies to drive
innovation, improve customer experiences, and optimize operations. With the potential to
significantly impact various facets of the industry, AI adoption is set to reshape how
financial services are delivered and consumed in India. As the industry continues to evolve,
AI's influence is poised to grow, generating greater efficiency, accuracy, and competitiveness.

At TVS Credit, we are starting on a journey to explore and adopt how this remarkable
technology, Generative AI, is positioned to transform the landscape and ecosystem of
financial services. As we navigate this dynamic landscape, we envisage a transformative
shift, reimagining the essence of financial services in the digital era.

Case Questions

The participating teams need to work on any ONE of the below questions.

(Question 1 is Business Strategy based, question 2 is HR Strategy based)

Question 1: Envisioning innovative use cases for Generative AI that seamlessly align with
the business model of TVS Credit, addressing the following focal points.

1. Industry adaptation and competition benchmarking

a. Global & India specific Benchmarking of similar fintechs/NBFCs/ Banks –
how is the industry leveraging generative AI & related technology?
b. Identify gaps & opportunities within the NBFC landscape where Generative
AI could offer a competitive edge.
c. Back insights with data-driven trends and market research
 2. Integrating Generative AI at TVS Credit:
a. Examine the capabilities of Generative AI and other relevant emerging
technologies, and explore how Generative AI can be integrated into TVS
Credit's existing systems and workflows.
b. Suggest tangible & practical use cases for TVS Credit basis your research.

3. Pick any 4 Use Cases & suggest a detailed End to End Model/Framework:
a. Marketing & Communication (consider both digital & offline marketing)
b. Customer Experience/Service
c. Digital assets (Website, Application, Chatbot etc.)
d. Detect and Prevent Fraud
e. Manage Risk and Improve Credit Scoring
f. Financial Forecasts
g. AI-driven predictive Analytics & Data Crunching
h. Loan processing
i. Any other critical areas basis of your research

4. Develop a comprehensive strategy to effectively communicate the suggested

AI-powered solution/framework to end customers, ensuring seamless adoption and
engagement.

5. Perform a cost-benefit analysis for selected use cases and showcase the tangible
impact on TVS Credit’s current business model.

Question 2: Putting yourself in the shoes of the Chief People Officer of TVS Credit, how
would you harness Generative AI to deliver a personalised employee experience?

1. Global & India specific Benchmarking of similar fintechs/NBFCs/Banks – how is the

industry leveraging generative AI & related technology for Human Resource
Management (Back insights with data-driven trends and market research).

2. Propose detailed strategies and practical use cases using generative AI & technology
for:
o Improving & revamping employee experience at every touch point during the
employee life cycle
(Employee Life cycle - Talent acquisition, learning and development, career
growth, employee engagement, Retention, Employee Exit)
o How can we leverage & integrate generative AI in the existing system enabling
TVS Credit as a preferred employer brand for Millennials and GenZs?
o Suggest a framework for employee performance management with an
AI-powered solution, to enhance the overall productivity of the employee base.

3. Perform a cost-benefit analysis and showcase the tangible impact of the suggested
strategies/use cases.
(Please approach this case study from the viewpoint of Organization Structure/Model,
Culture, Reward and Recognition Programs, Engagement drivers, Competency
Development/Training, Career growth, Digital first teams, suggested frameworks,
Employee Exit etc.)

Deliverables
Participants need to solve any ONE of the two Questions shared as part of the challenge.

Deliverable for Round 2: 2 Pager (Word file/ppt) solution needs to be submitted.

Deliverable for Round 3 (Finale Round) - Participants will be shortlisted based on their
submissions in Round 2. In this round, the participants will have to present a detailed PPT
on the same case study selected in Round 2.
For any queries on the Strategy Challenge Case Study, please write to us at epic@tvscredit.com

Annexure

1. TVS Credit Annual Report: https://www.tvscredit.com/investors/investor-

information#press-release

2. Assets under Management:

3. Income

4. Net worth

5. Key Facts
● 10 million+ customers served till date
● Assets Under Management (AUM) FY23: Rs. 20,602 Cr
● Net worth FY23: Rs. 2,758 Cr
● Presence: 130+ offices across 25 states
● 19,000+ employees
● 40,000+ distribution network points
● 4800+ channel partners

6. Additional Resources:

i. Website: www.tvscredit.com
ii. Social Media Handles:
o Facebook: https://www.facebook.com/TVSCREDIT
o LinkedIn: https://www.linkedin.com/company/tvs-credit-
services-ltd-/posts/?feedView=all&viewAsMember=true
o Instagram: https://www.instagram.com/tvscredit_official/
o Twitter: https://twitter.com/TVSCredit