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Alok Bansal

Alok Bansal is the Co-Founder and CFO at Policybazaar.com.

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Expectations from Fintech Sector in 2018

We hope that the government will continue to push digitisation of financial systems and the consumer will, more and more, be encouraged to shift to digital platforms for financial transactions.

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A new year is upon us and with that new challenges and opportunities. The growth and success of Indian fintech industry in the coming years will largely depend on how efficiently we analyse customer data, study customer behaviour and use technology in developing new products which are customer friendly and, at the same, allow top and bottom lines of companies to grow at a healthy rate.

We hope that the government will continue to push digitisation of financial systems and the consumer will, more and more, be encouraged to shift to digital platforms for financial transactions. Some of the recent initiatives such Aadhar and UPI provide a good opportunity for banks, insurers, and other players in the fintech sphere to promote financial inclusion for their own good as well as for the country as a whole. What is encouraging is that as a nation, India seems to have taken to digital technology quite willingly. Use of smartphones is widespread now not only for entertainment and communication but also for online purchases. This is good news for the insurance industry as insurance penetration in the country is very low, and if insurers could make use of digital technology to come up with innovative and cost-effective products, they can grow leaps and bounds in the coming years.  

Benefits of new technologies like AI and IoT

The good news is also that India’s start-ups have taken to technologies such as artificial intelligence, IoT, blockchain, wearables, machine learning, etc, and are competing with global players. What is needed is greater collaboration between corporates and start-ups to provide customer-friendly, innovative and cost-effective plug-and-play solutions in the financial services industry. Insurers have, for instance, introduced mobile apps for quick online payment of premiums and claim settlements. Precaution needs to be taken to tackle cybercrimes and make online transactions safe and secure.

Data crunching and customer behaviour

What is, however, going to be the game changer is the intelligent use of data and study of customer behaviour. With the availability of relevant information online, Indian customer now opts for more educated purchases. Having experienced platforms such as Amazon to buy a vast range of products, customers now expect similar service standard from insurance companies, banks, and other financial services companies.      

It is now possible to have a clearer and extensive understanding of customer behaviour. Technology has made it possible to know customers’ age group, economic status, location, economic and social associations, etc. More importantly, we can now track a customer from the time he logs in, what products he shows interest in, how much time he spends on a particular product, etc. Very often, customers interact with sellers to provide more information about their choices, expectations, etc. So, companies now have access to substantial data on consumers, and their success will depend on how efficiently and cost-effectively they customise their products and services to suit customer expectations. Not only that, companies, armed with better understanding of consumer behaviour, will also have to go much deeper and devise products for niche segments. 

To give an example from the insurance sector, our data analysts came up with some deep insights on the Unit Linked Insurance Plans which were, once upon a time, banished for being opaque and costly products. We shared our insights with a leading life insurance company and worked out a unique, zero-commission product which has been doing very well.

Government should push social security

Soon, the government will present 2018 budget which, we hope, will provide more clarity on regulations and encourage investment in the fintech sector. What is also needed, as we recently conveyed to the ministry of finance, are tax incentives to the insurance sector such as a separate tax deduction of for pure life insurance cover beyond the existing section 80C deduction of Rs 1.5 lakhs. The technological advancements can help government provide more for social security schemes such as the Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). The fintech industry, of course, needs to make use of new technologies and deliver exceptional user experiences for its own progress as well as contributing to the overall growth of Indian economy.  

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house


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