‘Distribution Disrupted:
Building a Zillion Distributors’

Summit 2015 Background

The Financial Services Industry is undergoing a phase of evolution where it is dealing with a new set of customers, who are extremely demanding, well-informed and need personalized services across all the channels. The semi-urban and rural markets in India are expected to grow at over 8% -10%. In these segments, the youth largely influence the behavior patterns of their parents, who are swiftly moving up the economic strata. By 2020-21 India will have more than 63% of youth and nearly 250 million people would have moved up different economic strata. The upwardly and laterally mobile have high aspirations, coupled with access to information about financial products through digital empowerment. Financial service companies are trying to create multiple touch points with customers to create a better engagement framework and increase customer loyalty.

Even though digital platforms are gaining ground, the financial services industry still faces challenges to roll out savings credit and insurance products to the larger population and make these products easily accessible. Business models are changing with technology as the backbone, and the financial services industry is definitely envisioning a more diversified landscape in terms of traditional players like banks, insurance and asset management companies on one side and the new entrants like mobile network operators, payment service providers, E-commerce companies. Inclusion of these entities in the eco-system of the financial services facilitates the participation of the low-income segment and brings them under the net of the formal financial services sector. Cloud computing and new generation banking applications are also likely to lower costs. Products provided to this segment have been standard, and no different from those provided to the urban middle class customer. Technology will make it cheaper to provide targeted niche products for the semi-urban and rural customer.

Policy makers so far were focused on servicing the semi-urban and rural customers, through public sector banks, which have challenges of efficiency, asset quality and product design. However, the story reads differently now with new players, fostering viable collaborations and allowing usage of one channel for distribution of all financial products including insurance, pension and loans.

Hence, the point to debate upon in this Summit here is not really whether traditional channels of distribution are taking a backseat, but how these channels can be complemented and strengthened with digital touchpoints to compete in this constantly changing environment to reach out to customers and service them in a cost efficient way. This Summit will throw light on all the key trends in the financial services industry and how they will impact the distribution model for the products available in the market.