REPORT

Communication
Challenges in BFSI
& NBFC Sectors

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Table of Contents

Summary 1

Market overview 3

Bottlenecks in the industry 5

Challenges & areas of growth 6

a) Financial Literacy ------------------------------------------------ 7

b) Poor response times ---------------------------------------- 8
c) Timely due repayments ----------------------------------- 9
d) Customer communication ---------------------------- 10
e) Visibility into agent conversations ------------ 11

Communication challenges
Exotel
in BFSI
Industry
and NBFC
Reportsectors
- 2019
 Executive Summary
The finance industry in India has a remarkable history- from traditional
banking practices to nationalization of banks to privatization and now an
increasing presence of foreign banks in India. Financial institutions are
undergoing a radical shift while still working under a lot of constraints
such as government regulations, wavering customer loyalties and
competition from changing business models.The use of technology has
brought about a great change in the working style of banks. Nevertheless,
fundamental aspects such as customer experience and trust of the
customers on the institution remain instrumental for this vertical.

This report is an overview on the existing market structure, identifying

opportunities for growth, challenges that are limiting these growth
opportunities and how BFSI and NBFCs can tackle these challenges while
customer experience still taking the prime focus.

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Communication challenges in BFSI and NBFC sectors
 Unfolding of the development
of BFSI and NBFCs

BANK
2000-2009
Bank Branch
Customer walks in to the bank branch
for any account dealings

2010-2019
Digitized Bank Branch
Face-to-face interactions slowly moves
towards digital and multiple touchpoints

2020-2025
Low Rental Processing
Centre Branches
Video call RM, Digital debit card, biometric
verification, Robotics-enabled transactions

2
Communication challenges in BFSI and NBFC sectors
 Market overview: Why the time
is right for NBFC and BFSIs

D I
DEMAND
Growing incomes are pushing
the demand for financial
services across all income
brackets.
Financial inclusion drive from
the RBI has expanded the
target market from urban
cities to semi-urban and rural
areas.
Investment corpus in Indian
insurance sector is
estimated to rise to 1
trillion USD by 2025.
INNOVATION
India has a large cross-utilisa-
tion of channels to expand the
reach of finance services. For
instance, many states are
launching their own mobile
wallets and allowing the
transfer of funds from other
wallets.
Many technologies such as
cloud telephony, blockchain
etc. are adding efficiency
to the BFSI and NBFC
operations.

BSFI & NBFC

ADVANTAGE
PENETRATION: POLICIES:
Credit, insurance and Government has
investment penetration is approved new banking
rising in rural areas. licenses and increased the FDI
limit in the insurance sector.
Mutual fund penetration of a
meagre 5–6% in the country
reflects latent growth oppor-
tunities.

P P

3
Communication challenges in BFSI and NBFC sectors
 Insurance and NBFCs have grown
significantly over the years.
Life Insurance Premium (US$ billion) Non-Life Insurance Premium (US$ billion)

70 67.12
62.45
60 56.06
52.71 51.9 53.64
50

40

30
23.38
19.89
20
13.14 14.95
11.05 12.03
10

0
FY13 FY14 FY15 FY16 FY17 FY18

NBFCs are rapidly gaining prominence as intermediaries in the retail finance space. They finance
more than 80% of equipment leasing and purchase activities in the country.

7
6.10
6 5.65
4.95
5 4.31

2 1.61
1.06
0.82
1 0.42 0.61
0.29
0
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Source Number of NBFCs in India

4
Communication challenges in BFSI and NBFC sectors
 Bottlenecks challenging the growth
of the Indian Finance Industry
Significant complexity of products, associated processes and legacy infrastructure

Hidden expenses creeping from the non-automation of organisation functions

Consumer fears about data security and privacy

Late and non-payment of dues and insurance premiums from customers

Regulatory requirements need organizations to spend a large part of their budget
on compliance and building systems to keep up with the requirements

Acquisition, on-boarding, engagement and retention involves a great deal of

resources in terms of manpower, time and money

...and ensuring that the customer experience is not compromised while looking out
for solutions for all these challenges.

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Communication challenges in BFSI and NBFC sectors
 BFSI and NBFCs
can focus on the following
areas of growth to address
the challenges

Challenges
Financial literacy Poor response times
Timely due repayments Customer communication
Visibility into agent (RM) conversations

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Communication challenges in BFSI and NBFC sectors
 CHALLENGE-1
Financial literacy
In simple terms, financial literacy refers to a set of skills that allow people to
manage their money wisely along with some understanding of essential financial
concepts. Financial literacy is essential for enabling people to make the right
financial choices and India has a huge problem to solve.

The Standard & Poor survey from 2014 found that over
76% of adults in India lack basic financial literacy.
- Source

According to the World Bank’s Global Findex database, 48% of the

180 billion bank accounts in India have seen no transactions in the
last one year.
- Source

SOLUTIONS
It is impossible for banks to distribute physical material to improve financial
literacy. Instead, introducing a toll-free number where customers can call to get
basic FAQs answered will be a first step to seeing a marked improvement in
financial literacy rates. New product or policy launch can be communicated with
customers via automated calls or SMS for a better response.

Toll free numbers Automated Calls Smart IVR

Know More Learn More Know More

Automated SMS Website Chatbots

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Communication challenges in BFSI and NBFC sectors
 CHALLENGE-2
Poor response times
With the growing digital and fast paced banking, engagement becomes even
more important. Today digital consumers demand more than just a response for
their problems, they demand speed and simplicity.

Reports suggest that 85% of all customer interactions are going

to be handled without the need of a human agent. - Source

59% of customers say tailored engagement based on past

interactions is very important to winning their business. - Source

Customer experience represents a recognized priority for

financial organizations, and 65% of those surveyed for our
research indicates that CX is at least a top 3 priority. - Source

Genesys found that after a poor experience, 71% of customers will

end their relationship with you. Worse, 61% will go to a competitor
after you mess up. - Source

SOLUTIONS
With a boost in the financial literacy, banks are going to receive more queries that
can be handled by agents. Call center automation is the only way forward to
manage a large number of calls with minimum workforce. In addition, banks can
undertake an omnichannel approach and introduce chatbot and Click on Call on
their website to improve response times.

Call Centre
Automation Click to Call
AI Chatbots
Know More
Learn More

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Communication challenges in BFSI and NBFC sectors
 CHALLENGE-3
Timely due repayments
Delayed loan repayments increase the cost of lending for financial institutions.

The results of a study suggest that SMS reminders led to 7-9%

increase in the probability of borrowers paying their dues on time.
- Source

This was comparable to giving borrowers a 25% reduction in the

interest rate on a future loan, or giving a lump sum rebate
equivalent to a 25% interest rate reduction on the current loan.

SOLUTIONS
With a boost in the financial literacy, banks are going to receive more queries that
can be handled by agents. Call center automation is the only way forward to
manage a large number of calls with minimum workforce. In addition, banks can
undertake an omnichannel approach and introduce chatbot and Click on Call on
their website to improve response times.

Automated In App
Voice Calls Reminders
Know More

Email SMS
Reminders Reminders

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Communication challenges in BFSI and NBFC sectors
 CHALLENGE-4
Customer communication
The simplest way to ensure great customer experience every single time is to
keep the customer apprised of the developments of their transaction/interaction
with your financial organization.

An insurance survey conducted by Ernst & Young of Indian life insurance study
shows that company trustworthiness (69%), customer service (43%) and
convenience (38%) overtook price as an important factor (33%) in provider selection.

According to a report by Microsoft, over 95% of the customers

surveyed, mentioned customer service significantly affects their
purchase decisions & brand loyalty.

SOLUTIONS
Customers often complain that insurance companies are not proactive when it
comes to communications, especially regarding claims. With increasing
competition and customer experience being the only differentiator, it is
imperative for financial institutions to keep customers informed about the status
of claims, application status, credit card status via SMS or IVR.

Voice
Email
Know More

SMS In-App
Learn More Communication

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Communication challenges in BFSI and NBFC sectors
 CHALLENGE-5
Visibility into agent (RM)
conversations
The simplest way to ensure great customer experience every single time is to keep
the customer apprised of the developments of their transaction/interaction with
your financial organization.

SOLUTIONS
RM has the crucial job of upselling and cross-selling, but since the bank doesn’t
have insights into RM conversations with the customers, their performance is not
being monitored. All the calls made from a cloud communications provider like
Exotel are recorded, thereby making it easy for the bank to gauge and monitor
RM’s activities.

Automated Feedback Calls

Call Recordings
Know More

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Communication challenges in BFSI and NBFC sectors
 Conclusion
Technology adoption
Most of the finance operations have moved to the cloud. Some companies are
reluctant because of the misinformed notions about security and regulatory
compliance. It is also because of the existing infrastructure and the associated
large capital expenditure.

A research by IDC Financial Insights for Reuters shows that the

biggest global banks can save upto $15 billion from cloud adoption,
cutting down technology infrastructure costs by 25%.

According to a report, 73% people agree that banks should deliver

the latest technologies to their customers.

At the end of the day, moving to the cloud isn’t a risk, but a necessity.
The sooner financial organizations understand this, the better it will be for them
and the customers.

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Communication challenges in BFSI and NBFC sectors
 About Exotel
Exotel is Asia's leading cloud telephony platform. We empower over 2500
businesses including Ola, Uber, Ekart, Tokopedia, Lazada, Redbus, Redmart, etc. to
efficiently handle their customer conversations over calls and SMS. In the 7+
years we've been around, we have grown from handling 1000 customer
conversations a day to nearly 5 million conversations every single day.

Get in Touch with Us

or Test for free

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Communication challenges in BFSI and NBFC sectors