Page 34 - Insurance Times August 2018

not be ready to take more risk compared to
identify the customer's need; however, many Companies still
consider market research as luxury.
It means that most of the financial players are
manufacturing their products based on the sales feedback.
There is a need to change in the approach of providers to
reach the customer to understand their need, this could be
expensive but the sales volume may recover an additional
cost incurred on market research.
Understanding of the customer's mindset and their trust on
the brand value are instrumental in the buying behaviour
of the customers especially in the banking and insurance
sector where traditional customers like to move more
towards established brand.
Customers are looking for simplicity over more choices
responsible for the success of financial distribution; the
providers are to understand the limited understanding of
the customers and every customer should not be judged
from the yardstick of metro city customers approach. More
choices to the customers may confuse rather than providing
more choices. May be for more sophisticated customers,
more products choices may given compared to lesser
sophisticated.
It is important to read the customer's mind, where they look
to assured return irrespective of whether the providers are
mutual fund or insurance. This mind set is more influenced
by the various advertisements on the assured return along
with past history of fixed deposits in the banks in the past.
Manufacturing of products based on target market makes
a more focused approach rather than fitting everyone with
the same products. A lesser financial aware customer may
34 The Insurance Times, August 2018
more financially aware customer who may
take more risks and invest in equity related
products.
Digitalization
In the first revolution up till now came
through customers physically visiting the
stores and making purchase; however, things
have fast changed over last decade in India
where there is a lot of focus on customer's
ease of operation with the use of online and
digitalization. With the advent of smart
phone, cheaper data and focus on online
distribution are fast changing the way Indian
customers make their purchasing.
The providers of products are also spending more money in
upgrading their infrastructure to meet the future demand
of online services. Even in the villages, they have started
using the cheaper smart phone imported from China. The
size of the bank branches are shrinking even in the rural
areas and mobiles are taking the place of bank branches. In
the future, the bank branch may cease to exist with mobile
doing the job of the bank.
The banking industry is spending on digitalization, sensor
based technology, artificial intelligence and internet of thing.
As a result of this, there is already a paperless account
opening/mutual fund and personal loan, one app for all bank
needs, paperless credit and debit card etc. On the security
side, strives have been made towards enhancing the security
compared to current One Time Password (OTP) through face
recognition, iris scan, speech recognition and finger print. It
is acknowledged by everyone that Addhar has really helped
in digital verification of customers and it is very convenient.
All the financial services industries mutual fund, insurance
and banks are spending on the upgrading the infrastructure.
The future survival of financial services industries will depend
on new technology for marketing and distribution. Some of
the older methods of reaching to the customer may go
away and taken up by softer mode. With such a rapid change
in the landscape, new level of fraud and risks will emerge,
so the future success will not only depend on the investment
on digital but on the risk management of digital risk because
the entire market will change.
From the customer's point of view, they also have to learn
to store the soft files and retrieve at the time of need. In
this regard some of teething problem may need to be
addressed through the customer education.