The future of financial services in India

Fueled by the widespread use of digital technologies, the Indian financial services sector is undergoing a major transformation due to evolving consumer preferences and increasing competition. This is pushing the sector towards a different growth trajectory. Simply put, this rapid adoption of technology is accelerating the way Indians use services and make payments. Street vendors also use QR codes as a payment method. Not surprisingly, the Boston Consulting Group predicts that India’s digital payments market will more than triple by 2026, from $3 trillion to $10 trillion.

This growth is largely driven by millennials and Generation Z, who are tech-savvy and have different expectations of financial services than previous generations. In fact, the world’s youngest population lives in India. Millennials make up his 34% of the country’s population and Generation Z makes up his 27%. In addition, millennials contribute significantly to the country’s economy and are the main breadwinners of today’s families. These generations are digital-savvy, digital-first, and prefer to conduct financial transactions digitally rather than visiting a bank branch. Transparency and convenience in business transactions are a matter of course for this group, but they expect banks to provide personalized services that meet their specific needs. This is backed up by The Financially Independent Millennial Report 2022, which highlights that millennials are increasingly turning to digital alternatives and preferring to make investments themselves. To attract and retain millennials, financial services companies must develop solutions and products that deliver tailored value.

total experience

Today’s customers expect a “total experience” from financial services organizations. As defined by Gartner, Total Experience includes Customer Experience (CX), Employee Experience (EX), User Experience (UX), and Multi-Experience (MX). When an organization achieves all of these things, that’s when the customer has a complete experience. It’s seamless, intuitive, personalized, frictionless, digital, pre- and post-purchase engagement that builds loyalty and increases wallet share.

One approach is to improve the digital customer experience by enabling organizations to overcome information overload and use it to their advantage. Tech-savvy Indians expect to access financial services through digital channels such as mobile his apps and online platforms. Financial institutions can invest in UI/UX and intuitive digital interfaces to deliver personalized and relevant content, minimize downtime and ensure the safety and agility of digital channels. , can improve the digital customer experience.
Another strategy is to leverage artificial intelligence (AI) and machine learning (ML) to personalize the customer experience. You can use AI and ML to analyze customer data and provide personalized recommendations and service. According to Ernst and Young, by 2030, the integration of chatbots and other virtual assistants with human advice will be so seamless that customers won’t be able to tell the difference. Juniper Research has found that operational cost savings from using chatbots in banking will reach $7.3 billion globally by 2023. For example, AI-powered chatbots can be used to provide 24/7 customer service and answer frequently asked questions. ML can be used to anticipate customer needs and proactively offer relevant products and services. Robotic process automation (RPA) can also be used to automate repetitive manual tasks such as data entry and document processing. This helps financial institutions improve efficiency and serve their customers faster and more seamlessly.

future

The above strategies are increasingly becoming the norm, and in the future, financial services institutions will need to become more predictive and customized when shaping products and solutions for their markets. More and more consumers are adapting to open banking enabling ecosystems. India has committed to open banking by launching the Unified Payments Interface (UPI) in 2016. This marks the birth of open banking in India. The country has chosen a hybrid approach to the initiative, involving both the market and the government in establishing an open banking ecosystem. More specifically, India’s digital infrastructure, known as the ‘India stack’, has become a topic of discussion and research as a key contributor to the country’s burgeoning open banking efforts. In the future, financial services companies will try to incorporate solutions that create better opportunities. Insurance companies that offer low-cost insurance plans for airline and train tickets are a good example. Similarly, a banking player who offers attractive interest rates, EMI options, or pay later services on his e-commerce website is also an example of a financial services player embedded in the products and services of other players.

In the future, financial services players will be present wherever there is potential for market expansion. Smaller loans and more modular insurance plans will be offered to serve a broader customer base. For example, mobile payments have made it easier for people in India to access and use financial services. In the future, more ecosystems will be created and financial service providers will play a pivotal role in making this happen.

The future of the financial services market is undoubtedly exciting, but it is critical for these companies to invest in digital technology and data analytics to meet the demands of Millennials and Gen Z and to deliver a complete, technology-enabled customer experience. Essential.

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