The Changing Landscape of Financial Services in India


Customer centricity, simple products and collaborative approach: key to democratising financial services

India is steadily progressing towards the vision of becoming a cashless economy, and the digital payments ecosystem is fuelling this unprecedented growth. With users becoming comfortable with various digital modes of payments, fintech players are making efforts to bring in the next wave of digital financial inclusion and PhonePe is leading the charge.

In this edition of the PhonePe Pulse Beat of Progress conversation series, Karthik Raghupathy, Head of Strategy & Investor Relations at PhonePe, got into a candid conversation with Hemant Gala, Head of Financial Services & Banking, PhonePe, on the need for a differentiated approach towards customer engagement and the importance to simplify complex products such as insurance and investments for higher adoption. Here is an excerpt from the conversation:

The shift in consumer behaviour

Amplified digital adoption has enhanced customer awareness and education spurring informed choices and a better understanding of financial services. On the investments side, Hemant explained how smart initiatives and simplified processes such as the UPI-based SIP have empowered customers to undertake their investment journeys without unwarranted intervention. Democratizing of information, digital mode of buying, and availability of varied investment avenues is encouraging consumers to diversify their portfolios. On the other hand, the pandemic has prioritized insurance across Life and General categories.

Initiatives by Regulatory bodies facilitating financial inclusion

Hemant acknowledged the massive efforts made by the governing forces to drive penetration, inclusive growth, and adoption of financial products. He shared that these endeavours have laid the foundation for financial inclusivity and will only get stronger over time. He further shed light on key initiatives undertaken by regulatory bodies - mass programs like the Ayushman Bharat Yojana, policy changes implemented by IRDAI (Insurance Regulatory and Development Authority of India) to ease the insurance acquisition process, liberalizing the insurance space for private participation, SEBI (Securities and Exchange Board of India) relaxing norms for the launch of innovative products by new asset management companies and AMFI (Association of Mutual Funds in India) playing an active role in creating awareness around informed investing. Hemant firmly believes that such measures encourage the spirit of innovation in meeting the needs of a diverse populace and will go a long way in bringing more people into the fold of financial inclusion.

Differentiated approach to solving challenges

Hemant opined that insurance and investments are under-penetrated categories in India in comparison to global benchmarks owing to problems of distribution, customer education, and awareness. Hemant spoke about the intensive research undertaken by PhonePe to understand customer needs that helped in crafting customized digital solutions. Underscoring a strong customer-first approach, he highlighted that PhonePe is focused on providing consumers with simple-to-understand products at affordable prices backed with features such as ready assistance, instant enrolment, and self-inspection, amongst others. PhonePe has also heavily invested in its tech architecture to ensure efficiencies of time, speed, and comfort of simplified payment flows for the end user.

He also explained the importance of forging strong ties with the end-consumer through regular engagement, building long-standing trust by ensuring consistent and relevant communication, and the solutions being easily accessible across geographies. All these efforts have helped PhonePe augment reach, engagement, and adoption by people even in the hinterlands. Sharing an example of PhonePe’s efforts toward customer education and engagement, Hemant spoke about a recent marketing campaign called “No tension insurance”. The campaign is targeted to counter the complexity attached to insurance products and drive awareness that life gets easier for those who anticipate, plan, and buy insurance in time.

Solutions oriented journey

Hemant shared that PhonePe is committed to providing diversified solutions to encourage the investment climate in the country and drive further adoption of insurance. He also shared key milestones achieved by PhonePe in the mutual funds and insurance categories - over 1.3 million policies sold in the two-wheeler segment, the first to launch a COVID-specific insurance product and selling over 0.5 million policies, over 250% annual growth in PhonePe’s new investors and is the market leader in the digital sale of gold in India.

From selling insurance, and facilitating buying gold & silver digitally, to being the first to launch the UPI-backed SIP, PhonePe’s repertoire of financial product offerings is in line with its intent to continue the dream run of adding scale and value to the digital payments ecosystem.

Watch the full video of the conversation here