With Internet users embracing online shopping and banking like never before in India, the adoption of digital technologies can substantially improve customer-level profitability and add to the retail profit pool by $3-3.5 billion by 2020, a new report said. Also Read - Ola to offer free oxygen concentrators to the needyAlso Read - Samsung Galaxy S20 FE Long-term Review
According to the report prepared by Facebook and The Boston Consulting Group (BCG), in spite of a growing digital adoption, financial institutions are yet to fully harness the opportunity. More than 50 percent of consumers is dissatisfied with their online banking and mobile app experience largely because of fear of hidden charges, lack of trust and complicated information provided, among others.
“As more and more Indians access the Internet on their mobile phones, there is a big opportunity for the financial companies to create a powerful digital experience that is intuitive and secure for their customers,” said Umang Bedi, Managing Director, Facebook India and South Asia, in a statement. ALSO READ: India shows growth in LTE availability but average internet speeds behind Pakistan, Sri Lanka
The report confirms that consumers are leaning towards digital adoption of financial services faster than previous estimates. “The time is now for the financial services industry to invest so we can help more people contribute to a digital future,” Bedi added. Today, nearly 70 per cent urban internet users are digitally influenced, which is much larger than other categories like consumer electronics or travel.
The adoption of online banking fuelled by the ongoing digital drive is expected to double to reach 150 million people from the current 45 million active urban online banking users by 2020 in India, the report observed. “Wide-scale adoption of digital has the potential of reducing costs of acquisition and cost of servicing to 1/10th,” added Amit Kumar, Partner and Managing Director, The Boston Consulting Group, India. ALSO READ: Internet users in India to double to 829 million by 2021: Cisco
The report requested financial institutions to transform themselves to increase their appeal to customers in three steps. “First fix the basics through automation of most of their day-to-day tasks; next they should transform customer experience by leveraging data and analytics and finally support customers in their entire journey and go above and beyond just traditional products and services,” the report said.