Payments Council of India' s Chairman Outlines 4 trends for BFSI sector With AI and VR coming up, BFSI companies have the burden to deliver their services or products to the customer at cheaper rates

The financial services industry is considered to be one of the key factors that are driving force behind any economy. But in India, the penetration of the BFSI sector is very low mainly because of three reasons — large ticket size products, cost of servicing small ticket size products is expensive and absence of digital interaction with customers.

But, with the emergence of technology-driven financial companies, popularly known as fintechs, the scenario is expected to improve.

But the question remains how to reach out to more people to increase the sector's market penetration while keeping up with the technological advancements?

Naveen Surya, Chairman of Payments Council of India, in a conversation with BIZ Experiences India, talked about four trends that financial companies can work on to reach to the untouched customer base.

Automobile

Cars without drivers are soon going to be a reality and they might well run on green energy.

But how does this impact the BFSI sector? Surya said, "If you look at BFSI's interaction with the automobile industry, you will understand that it will impact the credit, payment and insurance segment."

Anybody who buys a car is likely to take a loan.

With a driverless car, it is not as easy to spot the owner as it is with any normal car.

Take an example of the taxi service, either an individual buys a single car or a fleet company in this case. In future, do we require any of these stakeholders? Or will the manufacturer start a model like "direct to drive' for consumers, where the former owns the cars and supplies direct services to the latter?

Moving forward to the payment segment, Surya asks who will make the payment at toll booths or for fuel recharge. And last is the insurance part — which stakeholder will take the risk of the vehicle and invest in the insurance products?

"The industry needs to rethink the value-chain model along with traditional measurement for the traditional customer segment – issues like who buys, who pays, who takes the risk need to be discussed," he said.

Customer Interaction

Smart watches have the capacity to replace our phones. It highlights the immense possibility of humans to lead life without a device and finally going virtual.

Surya said, "Over a period of time, people will not be obsessed with one single device like a mobile phone or an iPad and hence, your technology has to be API-driven to support any device. Secondly, moving forward Virtual Reality is emerging and there are chances that we might not even have any device at all. Technology will be able to create a screen whereever you want and you can use it as your phone, laptop or television."

Till the time people don't have machines that are intelligent enough to respond to human questions combined with AI and a draws a human image, the physical touch will remain and various branches of banks and other financial institutions will also keep operating.

As an example, Surya said customers require human help while investing in insurance or similar products. With Virtual Reality coming in, how do you sell such products? "In these cases, can we have holographic images to explain the products? There are possibilities that such images will arise with time, but how we gear ourselves for the change is important as this might pave the way to reach out to more people," he said.

With the development of Artificial Intelligence and Virtual Reality, companies in the BFSI sector also have the burden to deliver their services or products to the customer with the cost-factor in mind and with little or no human interference.

Blockchain

The blockchain is the talk of the town and it's been discussed in every office, event or website and Surya did not want to stress much on it. However, he pointed out that, "Blockchain has multiple applications available for the BFSI sector, especially for the fintechs and e-currency segment."

Elaborating more on the e-currency, he said, it is the need of the hour for government and regulator-backed e-currency that would drive all these trends seamlessly.

Off to Mars?

The last point, Surya stressed on is space travel. Just like driverless cars, this will be a reality. However, the segment has too many open-ended issues to be discussed such as what will happen to our present financial sector in space or how do we transact there.

"The way our financial services sector works here, we definitely would not wish to take it to space. We are better off without it," he joked, adding that if companies plan for the next three-four years keeping the above-mentioned trends in mind, adjusting in the space will not be a major task.

Surya is also the Founder and former Managing Director of Itz Cash, which he exited earlier this year in July 2017.