In an e-mailed interaction with Medianews4u.com, Vinit Kapahi, Head of Marketing, Aviva India, explains the changes that Covid has thrust upon consumers and the BFSI space, catalysed by accelerated digitization.
There seems to be greater awareness on insurance and financial security. Should we attribute some of this to Covid?
Covid is a testament to the increasing awareness in the insurance sector. Businesses across the globe have suffered unprecedented hardships and people were in a financial bind due to job losses. The silver lining is that people have understood the need to save and invest in insurance as life is unpredictable.
Following Covid, there has been a significant increase in financial literacy campaigns, seminars and conferences. Virtual events, videos, and live sessions on social media were organized by banks, financial platforms, personal finance firms and individual financial advisors to help people understand and develop a corpus to meet their financial needs. While personal finance has become more important in recent years, there is still a significant gap in financial literacy. When it comes to financial literacy, consumers in smaller towns and cities are more vulnerable. As a result, both the public and private sectors must work together to improve financial literacy in the country.
A SEBI report says only 27pc of the population in India is financially literate. How has digitization helped and changed this in the past two years?
The digital penetration in India has been enormous in these two years. It stood at 47 percent of the total population at the start of 2022, with the number of internet users increasing by 34 million between 2021 and 2022. Covid fast-forwarded the growth of the BFSI services in the last two years. As the pandemic panned in, people started resorting to digital transaction modes, leading to an increase in the number of Aadhar card issuance for KYC. The pandemic has boosted the use of digital and contactless payments. The latest Red Book Statistics from the Committee on Payments and Market Infrastructures (CPMI) suggest that post Covid, people have switched from physical cash to digital and contactless payment tools at an unprecedented rate.
Banks and financial institutions have accelerated the use of digital services. They emphasized the integration of extra services into their digital channels, whether through net banking, mobile banking, chatbots, or other techniques.
When it comes to insurance, financial immunity is becoming more commonly acknowledged. It is plausible that life insurance is now seen as one of the best risk-mitigation instruments, rather than merely a financial saving tool. Customers’ faith in insurance as a secure financial instrument has been bolstered by the pandemic.
Even though the number for financial literacy in India is low, people are increasingly interacting with BFSI through digital services that provide ease and security. And this is only the beginning. Now, the onus is on us, BFSI companies, to take this forward and educate the customer to make them financially literate.
How is Aviva addressing the lack of financial literacy in India?
With increasing urbanization, the literacy rate is rapidly increasing; however, financial literacy is not growing at the same pace. Over the years, we have worked with our consumers to increase financial literacy, make claim settlements simple, and create a memorable experience. We have made progress toward an almost all-digital environment. We at Aviva envisage a future of customer service with video bots.
Our digital solutions allow consumers to choose how they wish to contact us, explore our products, and access them.
The focus of our leadership has always been on financial literacy. That is why our marketing strategies are designed in a way to financially educate the masses. We carry out this by running social media campaigns, writing blogs on different topics for different target groups, participating in different thought leadership events, etc.
We have been steadily upgrading our marketing strategies over time. It includes rethinking operations to enable remote customer outreach, rapid adoption of digital technologies, and educating our consumers on how to use the same. With our product developments and marketing approach, we hope to see an increase in financial literacy numbers.
What is the role of marketing in this sector? Are you spending more on digital as compared to traditional platforms?
With the shift in consumer behavior, the way brands communicate with their customers has also shifted dramatically. I am of the opinion that to be successful, organizations must move in tandem with ongoing trends, and this is where marketing comes into play. Consumers are more focused on the consistency of the experience provided to them across touchpoints, whether it is on a real location or an online platform.
The ‘one-size-fits-all’ approach is a thing of the past. We can neither go entirely traditional nor digital. The role of the marketer is to anticipate the client’s wants, and while anticipating the same, I feel that a company should not put all its eggs in one basket.
Word-of-mouth plays an important role in onboarding new customers. It can prompt a consumer to consider a product, especially when it comes from a trusted source. We understand that digital-first millennials would only make up one half of our target audience — and the other half are the people who are still far behind on the technology adoption curve. They need more human experience and handholding on their financial journey to help them stay on top of their game.
The way to reach new consumers is mainly through phygital, i.e., physical, and digital. No matter how the customers are acquired — offline or online — there is a need for various touch points during the customer life cycle on both channels to attain customer satisfaction.
At the end of the day, the customer is still king, and a brand that not only listens but also makes its consumers feel heard for all their expressed and unspoken requirements will live to tell the tale in times like these.
What are the trends in India when it comes to insurance in the new normal in India?
The need for innovation in the insurance space was apparent well before the pandemic. With the evolution of technology, there has been a constant rise in customer expectations. There has been a rise in certain trends, to name some we have:
Digitalized Services: Social media users in India increased by 19 million between 2021 and 2022.The shift to digital-first models has been the most visible change. Insurance and other customer-facing financial businesses have transferred all their contact with consumers to digital. This is an extraordinary development as it saves time, costs, and boosts the speed of delivery. In the new normal, insurance companies are exploring strategies to integrate their customer acquisition and services with their distribution partners to ensure a seamless customer experience.
Focus on Digital Word of Mouth: Word-of-mouth has always been a major way to attract potential customers. However, customers of today heavily rely on digital channels. While it is the job of insurance companies to ensure that customers’ digital journey is seamless, they rely heavily on reviews by other people before making any purchase decision. This is either achieved through influencers or customer reviews on different platforms which act as digital word-of-mouth.
Cyber Security Awareness: The rise in digital engagement with customers has also led to an increase in unwanted incidents of cyber fraud. Therefore, constant investment in cyber security is mission-critical. Businesses are investing in new security tools to ensure that customers’ money and trust are in a safe place. With the advent of blockchain and encryption, even the customers are now aware of cyber fraud and want to protect their data from any third-party intrusion.