Understanding a financial product can stump the brightest of minds and in a diverse country like India, the BFSI marketer’s job is a tough one indeed as he has to cater not just to different socio-economic classes, but also local preferences and people speaking multiple languages. Marketing experts from the field of banking, financial services and insurance came together at a Roundtable on ‘Diversity Marketing – The BFSI Marketer’s Challenge’ to understand the extreme diversity and complexity in the Indian market. The event was organized by Surewaves, a media convergence company, in collaboration with exchange4media on June 4 in Mumbai. Niloufer Dundh, founder and CEO of Ventes Avenues, moderated the discussion
The Participants
Abhijit Shah, Head of Marketing, Digital & Customer Experience, ICICI Prudential AMC; R Balaji, Vice President , Marketing & Strategy, Mahindra Finance; Braj Kishore, Head - Brand and Corporate Communication, SBI Life Insurance Company Limited; Meera Haridas, Asst. General Manager( Mktg & Corp Comm), Bank of Baroda; ?Pradeep Pandey, Chief Marketing Officer, Future Generali India Life Insurance Co Ltd.; Sevantika Bhandari, Sr. VP & Head Marketing, Dewan Housing Finance Corporation Limited (DHFL); Tamanna Khanna, Head - Marketing, IndiaFirst Life Insurance
Finally, it’s ‘Find
me the right offer’
By Niloufer Dundh,
Founder & CEO, Ventes Avenues
Roundtable Moderator
It was an absorbing two-hour session with seven stalwarts in the BFSI sector. My panel included marketers from a PSU, a housing finance company, an NBFC, an AMC and three life insurance companies, all sharing their challenges and opportunities with respect to Diversity Marketing.
The conversation was that there is enough opportunity for all, customer needs are high, product penetration is the key challenge, and also what are the channels to be used: TV, Digital, Outdoor, In-Cinema … how to combine these. There is diversity in ways to sell and diversity in ways to service. However, the core need is the same…’Find me the right and suitable offer’... be it a loan, insurance or mutual fund. According to the panel, the industry needs to take concrete steps in educating the customer and ‘partnering’ him; after all, most financial products are sold, not bought.
The panel also prepared itself for future shock, expecting the likes of an ‘Uber’ in the Indian BFSI segment, and clones of US companies like Lending Club and Robinhood to mushroom in the near future. On the positive side, there was unanimous acknowledgement of the push by the Government of India towards the Jan Dhan scheme, which the marketers termed “the best way forward for our country to achieve financial inclusion”. Concrete positive steps by the government and regulatory bodies like SEBI, IRDA, KYC portability, etc., were welcomed by all the panelists.
The Discussion Points
· The challenges and opportunities for marketers, such as financial inclusion, diverse consumer base, increasing savings mobilization to financial products, emerging affluent middle class and increasing disposable incomes
· Strategies and channels used to handle the diversity and effectively communicating the financial products, which are perceived to be complex, by the vast, diverse potential consumer base
· The local way of advertising, how to address language barriers and different cultures.
Here are excerpts from the insightful debate.
Meera Haridas: The challenge in financial inclusion has been in bringing in the unbanked segment and this cannot be driven without the government’s support. Diversity exists in customers from different backgrounds and with different aspirations. Financial inclusion is not just about the rural population, but also the unbanked in the urban slums… and also in terms of gender disparity. Banks have taken initiatives such as self help groups and other programmes, but the real challenge is driving a balance between brick and mortar, pen and paper culture to probably click and router culture.
R Balaji: Affluent people in rural areas may be fewer when compared to the urban/ metro areas, and they may be less knowledgeable, but they are wiser. That’s because service providers in the past have defrauded them and they don’t trust people easily. But, they are looking for partners to progress. Looking across categories, the penetration levels are low and the aspirations high, so for the next 10-15 years, you don’t need to worry about competition and can focus on a growth of 15-20%. For the financial sector, 20% CAGR is assured for the next few years. You need to move away from the culture of lazy banking to highway banking and reach out to people where they are comfortable. People need to be assured of your presence as they have not been provided adequate customer service.
Abhijit Shah: It’s interesting times for the mutual funds industry because we have a problem of plenty. We are just a 20 million customer industry and 44 players. The consumer who invests with us has preferences and does his research. The advantage we have right now, unlike a lot of legacy businesses which have highly branch/people-led model, is to capture on the disruption that mobile services can offer. With mobile and net-banking, it is as simple as buying on Flipkart. A larger opportunity is the disruption that is happening on payment. I firmly believe financial inclusion will take off with disruption.
Sevantika Bhandari: While we are seeing a lot of technology trickling down to the middle and higher income groups of society, a very interesting change is happening in the Lower Middle income (LMI) segment. While they may have a smartphone and be able to surf the Internet, they are still not transacting on the Internet. But the children in these families are all transacting on the Internet, so a very surprising statistic we found was that our home loan enquiries were coming from the 18-25 age group, which is the largest on the web, which is not the typical home-buyer age group. Then you realize that it is actually the children who decode the expectation of the parent for you. The way you communicate has to be different, because you are communicating to the end user via a very young with-the-times customer. While the eventual decision lies with the parents, the first interface and communication is targeted at the younger set and you have to be slightly more textual and relevant and this creates another layer and nuance for the marketer.
Pradeep Pandey: We don’t build our product, we try to force fit our product from one segment to another segment. On the other hand, when you build a product, which is only for rural, and you ensure delivery along with that, it is not a challenge. If I am urban-centric, no matter how hard I try, I will never be rural-centric and vice-versa. The only option is to have a different unit, cut it off and make it an innovation cell, and house it separately. You have to customize your offering and communication, based on who you are talking to.
Tamanna Khanna: We are one of the youngest life insurance companies in the country, and that has been one of our biggest challenges and opportunities. What it forced us to do is try and see how we can catch up with the market and hence we had to act smarter, try routes that had not been tried before. Talking of technology, we have a micro insurance product for rural and urban-rural, for which the customer does not need a single document. We managed to do it last year with IRDA, through common service centres. Today, the customer walks in and through a retina scan, we directly connect with UIDAI and issue a policy on the spot. We have launched it in seven States.
Braj Kishore: The biggest challenge in the insurance category is customer inertia. Insurance has been sold historically not as insurance, but as a tax-saving instrument. The question to answer is, whether this is the right insurance product for us? Insurance is a highly intermediated sector and it’s mostly the agent’s discretion on what you end up buying. It is not you deciding, and that is the most unfortunate dimension of insurance as a category. Customers want the easy way out and you can’t blame insurance companies and agents for mis-selling.
R Balaji: When it comes to financial inclusion, it is not just about opening more accounts, it is giving credit because we need to realize that for people to invest or save more, the economic activity needs to increase. We found that 70% of people who take loans from us never approach a bank. Out of the balance 30%, 80% of the loans have been rejected by a bank and the remaining 20% has not been approved or is under process. We finance these customers, but when we see our net credit loss over a 20-year period on an average, it is 1.3-1.5%, comparable or even lower than banks. Traditional ways of credit evaluation are not relevant to different customer segments.
Abhijit Shah: There is an opportunity of investing in your branches as marketing outlets not only to cross-sell, but to build the brand. We use mass media for investor education campaigns to reach various genres of viewership on the consumer side. We see a lot of traction on digital advertising, especially through the partnership model we have explored. For example, before the Budget, we partnered with Google for a property, Mera Budget, to take the Budget to the common man. Consumers believe we are a difficult category to understand, so we have experimented with simple videos explaining simple financial concepts.
Braj Kishore: With so many mass media channels, one medium we have explored very well is in-theatre advertising. When you see a film, you have already segmented and carved out an audience for yourself. The product and language can be localized so that you can give the exact messaging to the audience. With so many mediums, it is important to understand what to communicate with each medium.
Meera Haridas: We spent 30-40% of our marketing budget on TV in the last year. Earlier, we used to be present more on Print. Now we are into TV and Radio. Cinema has also been a big medium with a captive audience.
Sevantika Bhandari: Our brand awareness is lower than our actual market-share. The first port-of call for DHFL is to raise awareness. While digital is growing, we still have a traditional heavy media mix, with TV being predominant. We use mass and regional TV, local cable, cinema and vernacular Press.
Tamanna Khanna: We do very little of mass media advertising as we bank on our partner banks, who are also our distribution partners. Our activities are synched with a lot of in-branch activities. Looking forward, we have tried to build a co-owner model of bank assurance along with our partners. We have experimented with outdoors, high impact properties and on-ground activation.
Pradeep Pandey: One of the biggest challenges in the country is financial fraud. You have to safeguard yourself because if you don’t take care, you can be out of business. This is a challenge we have to overcome when we go deeper into the interiors, and the way to overcome this is use of bio-metrics. This is where technology comes in to solve corruption.
Abhijit Shah
The brand or company which stays true to the promise of delivery and gives that customer experience at each and every touchpoint will succeed as consumer activism will have a big role to play.
R Balaji
The most important thing is product design, you need to understand and partner with the customer and develop appropriate products which provide him solutions for financial well-being.
Braj Kishore
Simplification of product is not only relevant for the lower income classes, where banks sell plain vanilla insurance, but also relevant for HNIs as more complex the product, more complicated is distribution.
Meera Haridas
Judicious spending and stretching every rupee to get the best mile is a challenge. Don’t be an aggressive seller all the time to bring business; sometimes, you have to sow and allow it to germinate.
Pradeep Pandey
The real challenge is having a big idea which works across segments. In BFSI, people don’t know what they are buying, or what they have already bought. So how to bring a technology like Uber for financial services?
Sevantika Bhandari
We are looking at how user habits are changing, how people are consuming technology and hence influencing decision-making processes. We are trying to change and adapt to that.
Tamanna Khanna
Diversity in life insurance comes from how the customer wants to be contacted... If a product isn’t working, it may be because we have missed out on the channel to reach and service the customer.
