The banking, financial services and insurance (BFSI) sector has undergone a seismic shift over the past few years, primarily driven by digital disruption, rapidly changing customer expectations and sustainability imperatives. Market dynamics too have, of late, had a spiralling effect, as evinced by the tremors in the global economy following attempts by global central banks to rein in inflation by hiking interest rates. India’s banking sector, fortunately, has seen little impact, as loans rather than investments comprise the larger share of Indian banks’ assets and the relative increase in interest rates was much lower than that in the western world.
In the banking space, India continues to be at the forefront of innovation and financial inclusion with the Unified Payments Interface (UPI) and Aadhaar stack. India is also one of the select few countries that has launched its own Central Bank Digital Currency (CBDC). While the Reserve Bank of India (RBI) perceives CBDC as the next-generation seamless, ubiquitous, anonymous payment mode that delivers value to customers, there is, however, more ground to cover before digital currency can become the dominant mode of exchange in India and elsewhere.
On the insurance front, the pandemic was the litmus test of the insurance sector’s resilience quotient in India. Despite the unprecedented disruption caused by COVID-19, the insurance industry in India was by and large solvent, indicating that there is enough room for leveraging capital and using efficiency tools for furthering growth.
The colour of money then is the broad theme of this edition of Immersive Outlook, with the spotlight on securing the customer’s future by building trust, demonstrating value and meeting customer expectations with hyper-personalisation. While wealth, as they say, may consist of having few wants rather than great possessions, in the current BFSI landscape, if those few wants are met satisfactorily, the 1.4 billion-strong population of India will have much to celebrate. That is the crux of the articles and interviews.
Varun Dua, Founder and CEO, Acko General Insurance Limited, emphasises that point – showing value rather than preaching it. In an online interview with Joydeep K Roy, Partner and India Financial Services Advisory and Global Health Insurance Leader, he insists on the need for insurance companies to transition from being complex product companies to trust and brand companies, and discusses the necessity to bridge the protection gap and the means of rural penetration.
‘Digital at the fore, human at the core’ is Shyam Srinivasan’s mantra for transformation. In a conversation with Venkata Peri, Partner and Research and Insights Hub Leader, the MD and CEO of Federal Bank says that technological advancements and rapid innovations in the banking space have further accentuated the need for human connection.
In Bridging gaps in the India insurance sector, Partners Amit Roy and Nitin Jain contend that the insurance industry’s growth at a CAGR of ~12% over three years points to a huge opportunity to cover the 90% protection deficit. India is the 10th largest and fastest-growing insurance market in the world. To further accentuate this growth, harnessing technology is the need of the hour. The authors recommend, among other initiatives, embedded insurance and innovation for developing hyper-personalised products to win customers and influence people via robust distribution channels.
In Assessing vulnerabilities in India’s banking sector, Partners Kuntal Sur and Rounak Shah examine the resilience of the domestic banking system by scanning the vulnerability indicators in India’s banking system. Elaborating on the importance of timely regulatory intervention and the need to build investors’ trust, they recommend a three-pronged strategy to help banks withstand global headwinds.
Mihir Gandhi and Zubin Tafti focus on global tailwinds in the Future of digital currency in India. India is steadily transitioning to the digital mode with a record INR 149.5 trillion UPI and card transactions registered in 2022. According to the India Digital Payments Annual Report, UPI clocked over 74.05 billion transactions in volume and INR 126 trillion in terms of value. Understandably then, the RBI foresees the e-Rupee as the next-generation ubiquitous payment mode that will deliver value to customers. The authors dwell on what it will take to turn the RBI’s vision of a cashless economy into reality.
It is evident that the BFSI sector is poised for further disruption and exponential growth. The integration of emerging technologies with business strategy, as the articles and interviews suggest, will unlock new possibilities for hyper-personalisation, customer engagement, efficiency and risk management.
We hope you find the content in this edition insightful. Reach out to us if you would like to have a more detailed discussion on any of the aspects we have touched upon.
Vishnupriya Sengupta, Senior Director, Markets
Varun Dua, Founder and CEO, Acko General Insurance Limited, believes insurance companies need to transition from being complex product companies to trust and brand companies. In an online interview with Joydeep K Roy, Partner and India Financial Services Advisory and Global Health Insurance Leader, he outlines the key factors that could ensure wider reach and lead to enhanced customer experience.
As technology advances, the human connection becomes even more important, says Shyam Srinivasan, MD and CEO, Federal Bank. In conversation with Venkata Peri, Partner and Research and Insights Hub Leader at PwC India, Srinivasan throws light on the changing nature of banking.
Varun Dua, Founder and CEO, Acko General Insurance Limited, believes insurance companies need to transition from being complex product companies to trust and brand companies. In an online interview with Joydeep K Roy, Partner and India Financial Services Advisory Leader and Global Health Insurance Leader, he outlines the key factors that could ensure wider reach and lead to enhanced customer experience.
The growth of the Indian insurance sector is important for the expansion of India’s GDP. With customer requirements driving innovation in this space, insurance sector CEOs have their work cut out for them, say Amit Roy, Partner, Insurance and Allied Businesses, and Nitin Jain, Partner, Management Consulting.
A grim global macroeconomic outlook has brought the vulnerability of financial systems to the fore. Kuntal Sur, Partner and Risk Consulting – Financial Services and Treasury Risk Management Leader, and Rounak Shah, Partner, Financial Services – Risk and Regulatory, examine the resilience of the domestic banking system, and outline a three-pronged strategy to help banks withstand global headwinds.
114 countries, including India, are exploring digital currency, and India is piloting its own retail CBDC. The RBI foresees the e-Rupee, which it will issue and regulate, as the next-generation seamless, ubiquitous and anonymous payment mode that will deliver value to customers. Mihir Gandhi, Partner and Payments Transformation Leader, and Zubin Tafti, Executive Director, Payments Transformation, weigh the pros and cons.
As technology advances, the human connection becomes even more important, says Shyam Srinivasan, MD and CEO, Federal Bank. In conversation with Venkata Peri, Partner and Research and Insights Hub Leader at PwC India, Srinivasan throws light on the changing nature of banking.
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