India, next big market for retail financial

services
According to the 'Indian Retail Finance' report, India
is the next big market for the retail financial
services. The Indian market may have come a long
way but things are just getting started. The next 10
years will see more changes.
2008-10-31 17:39

CJ: Artika Shah

Fri, Oct 31, 2008 17:39:31 IST

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1529
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Business News India :
Fashion licensing: Opportunity to grow globally
RESEARCH AND Markets has announced the addition
of the “Indian Retail Finance” report to their
offering.

This report uses exclusive interviews plus a survey

of third party data to present the critical success
factors in creating an Indian retail financial
operation, including:

• Who’s who among domestic and foreign players?

What are they doing? What are their existing
 and future growth strategies? Plus in-depth case
studies of the post office network and the micro-
finance movement.
• Key segments explained and de-mystified,
ranging from the affluent, the female market,
the un-banked consumers in regional and rural
markets.
• Multi-channel distribution strategies, including
branch, mobile, peer-to-peer, and self-service.
• Understanding domestic regulations.
• Best practice and market intelligence in
collection strategy, cultural due diligence and
talent management.
• The size and shape of the deposit, cards
(prepaid and credit), wealth management,
mortgage lending, personal lending, and
remittances markets, where the opportunities
lie, how these markets will change, issues to
watch and key success strategies.

This report is essential business intelligence for

anyone seriously considering how to profit from the
growing Indian financial services sector.

It’s hard not to get excited at the thought of India

as the next big market for retail financial services.
Although Indian consumers have started to feel the
affects of high commodity prices and the fall-out
from global economic uncertainty, gross domestic
products (GDP) growth remains impressive and as
one of the ’BRIC’ countries, which included Brazil,
Russia, India and China, she is set to become the
world’s third-largest economy by 2050. The financial
services sector is expected to be a lynchpin of this
growth along with the retail, information technology
and telecom industries. The market for banking
products is growing at an even faster rate.

An economy transformed -- The rising elephant

In 1985, 93 per cent of the nation lived on

approximately a dollar per person per day. By 2005,
that proportion had been reduced to 54 per cent, or
431 million people lifted from poverty (more than
the population of the United States or of Western
Europe).

India’s population is the youngest in the world. Half

of its roughly 1.2 billion people are below the age of
25. Over the next 20 years, the number of people in
their prime working years will continue to grow in
India. Unlike in some of the other BRIC nations,
where the population is aging, this again will grow
the market for all retail finance products. Mortgages,
in particular, will benefit as this population becomes
of home buying age. The mortgage market is
currently under-penetrated, with the value of
mortgages representing just six per cent of GDP.
Changing attitudes to debt and consumer finance
and rising affluence has altered consumer attitudes
and the approach of the urban consumer has shifted
from ’debt averse’ to ’spend now, worry later’.
Abundant employment opportunities have increased
peoples’ confidence in their future earning power
and with that, an appetite for spending that their
parents would have indulged in only after a lifetime
of careful saving.

The credit card market in India has seen a rapid

boom from less than two million cards in the market
before 2005 to 26 million cards in 2008. India is the
second-fastest growing cards market in the Asia-
Pacific region, with an annual growth rate of more
than 30 per cent. It is predicted by the Indian
Banks’ Association that the financial cards market
will increase threefold within the next five years.

The Indian market may have come a long way but

things are just getting started. The next 10 years
will see more changes than the past 25 years, and
with just 59 per cent of the Indian population
reported to have a deposit account (compared to an
average of over 85 per cent in Western Europe),
there is a lot of territory yet to be staked out for
both banks and their suppliers. Many financial
services firms have entered the fray, and there are
now close to 300 foreign, public and private sector
banks doing business in India -- compared to only
60 ten years ago.

The opportunity of the 21st century

On almost every metric that matters, India

invariably tops it. However, such a considerable
opportunity does not come without risks. As many
foreign investors have discovered in recent years,
India is not a business proposition for the faint-
hearted or the uninformed.

This report provides a complete 360-degree

perspective on the Indian financial services sector
giving readers both critical insights into the market
as it is currently structured, and an informed
perspective on the likely direction of change in the
medium term.

You’ll learn not just how the banking sector is

structured and regulated, but how it is likely to
change over the next two years. The report goes
well beyond the usual business and economic
analysis, also covering both the cultural and political
dimensions of Indian culture.

Who should read this report?

Retail banking and consumer finance operations -

Heads of of strategy, marketing, risk and business
development - assessment of the prospects for
success with an Indian operation.

Wealth management and private banks - Heads of

strategy, marketing, risk and business development
- assistance in targeting affluent and high net worth
individuals (HNWI) based in India

Banking sector – Analysts, data and analysis that

can be used to arrive at a more realistic assessment
of the potential of the Indian retail financial market.

Anyone else in retail banking and financial services

who wants to know more about the opportunities,
challenges and possible pitfalls of extending retail
financial services to India as a strategy for growth
can avail the report.