With the number of Internet users set to rise to 465 million by June 2017, the digital revolution in India deserves all the attention it’s getting. Clubbed with increasing smartphone penetration and reducing data costs, this has led to an unprecedented number of people across ages and genders taking up the online medium for education, shopping, banking, and much more.
India is also rapidly transitioning to a data rich nation. Discovering consumer consumption patterns, preferences, and even interests, is just a click away, giving businesses customisation and targeting opportunities like never before.
While sectors such as e-commerce are already reaping the benefits of this digital explosion, it’s time financial services institutions tap into this incredible pool of opportunity.
Financial Services in 2020’ is an industry by BCG and Facebook that aims to help financial institutions embrace this new normal. And why should they? Because the report reveals that financial institutions can grow their profit pool by $3 to 3.5 Billion by adopting digital and reducing their cost base. The report also estimates that by 2020, 250 million urban banking users will have internet access. Out of these, over 120 million are expected to use at least one digital channel during the purchase journey of a financial product. This isn’t hard to imagine seeing that over 70% of urban banking users with internet access are already digitally influenced during the purchase journey of a financial product.
India is set to trump many advanced economies. From creating ‘Digital India’ to establishing open architecture layers such as Adjara, India Stack, Bharat Bill Payment System, and GST, to more recently pushing cashless transactions post demonetization, the government has been actively pushing for digital. But would all current financial institutions be in a position to take advantage of these emerging opportunities?
Making the digital switch
Financial institutions need to fix basic backend operations to ensure timely delivery of digital services. The white paper notes that adoption of digital can significantly increase profitability for financial institutions. On an average, customer acquisition, servicing, and transaction cost, on digital channels are almost 1/10th compared to the cost incurred on traditional non-digital channels. Plus, customers using digital channels tend to bank more and generate almost 5x-8x times revenue. Overall, this leads to 10x higher profitability from digital customers compared to non-digital customers.
Giving financial institutions the Facebook advantage
With millions of users worldwide, Facebook has always championed the cause of moving to digital, driving customers for businesses across verticals, from discovery through purchase and beyond. Our family of apps and services have been built with mobile audiences in mind, and hold the key to unlocking the future of the banking and financial services industry.
Digital is revolutionizing industries at an unprecedented scale. Businesses in the financial services industry are poised to create meaningful disruption across the spectrum, if they find a way to leverage this transition.