Innovations in Financial Services: Vision 2021 & Beyond

The Indian BFSI sector is making great strides in the field of digital transformation by embracing advanced technologies. However, the speed of change at all levels are challenging in the current state. Highlighting the tough situation, the sector is facing today, Asim Parashar, Partner – Financial Services, PwC India said:

“The BFSI industry must adapt to the changes spreading across multiple areas like customer experience, rapid policy changes, competition from FinTechs, new business models, along with macroeconomic policy changes due to Covid and deglobalization. In this challenging environment, BFSI must play a critical role in boosting economic growth by offering credit update, reaching out to more people, and helping them to grow, by bringing in innovation.”

Indeed, technology is no longer a differentiator but a basic necessity of business. Technology alone is not enough to overcome these hurdles – it must be spearheaded by innovation. Explaining the role of innovation and the areas of its impact in BFSI in near future, Pradeep Menon, MD Technology – HSBC opined:

“In the current era of digitization, innovation is going to be the key differentiator between winners and losers. As far as the impact of innovation is concerned, we see a movement from a transactional system to an experiential system. Increased data availability will help us create new revenue schemes and increase our ability to help customers. The ability to interphase financial technology with third party systems will gain more momentum.”

Further elucidating on the areas of innovation that are expected to gain momentum in the coming years, KV Dipu, President & Head – Operations & CX – Bajaj Allianz General Insurance, added:

“After customers get accustomed to digital servicing across the entire spectrum, there arises a need for these services to mimic a human experience. So how do you blend technology with the art of customer centricity to make it as human-like as possible – is one area where we expect a lot of innovation.

Second area is making UI/UX touch-free, in the context of Covid. How do you leverage a touchless UI/UX to ensure that you focus on customer hygiene as well as world-class service – may be, by using voice command or bar codes – a lot of innovation is expected on that front as well.”

Customer experience has become a priority for all businesses in the increasingly digital environment that Covid has pushed us into. Customer expectations are also rising as they gravitate towards a more holistic experience, where everything they need is made available in one place. Elaborating on the need for innovation in this zone, Nitin Agarwal, President & Group CIO – Edelweiss Financial Services explicated:

“The one big change from the customers perspective where companies would have to innovate themselves would be around the eco-system play, where different services would be coming in from different sectors of the industry to offer customers a holistic solution experience. To deliver this whole experiential economy which the customer is expecting, all of us would need to change our product construct, our acquisition channel structure, our risk strategy, our operating model.”

Resonating similar thoughts on collaborative innovation, Byju Joseph, CTO – Future Generali India Life Insurance, further added:

“Now is the time to co-innovate, all segments – banking, financial, NBFC, etc. must work together to build innovation which is meaningful for the customers. Building this shared ecosystem will be facilitated by Blockchain. Moreover, such collaboration would be needed to build an intelligence system which is equipped with a huge customer data pool and is capable of providing right offers and apt product recommendations to customers.”

Murali Nair, President Banking – Zeta, summed up the key innovation areas in the BFSI sector for 2021 and beyond beautifully in 5 emerging trends:

  • A secular move towards cloud banking
  • Personalization at scale, supported by cloud technology
  • Creation of ecosystems with embedded banking – collaboration between FinTech and banking
  • Digital onboarding will become a mainstay
  • Contactless digital payments will become the norm

With so much going on in so many different fronts and key industry leaders advocating fundamental shifts in terms of collaboration and co-innovating, BFSI sector is definitely poised for an exciting era of evolution which will finally usher a new dawn of economic growth and prosperity.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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