Onboarding Non-Tech Savvy Customers: Challenges & Solutions

Banking Frontiers hosted 3 industry experts - Vivek Chaturvedi, Marketing Head at Digit Insurance, Anuj Pandey, Chief Operating Officer at U GRO Capital, and Mohan Kumar Sahni, Head of Cards, Payments & Digital Banking at Utkarsh Small Finance Bank - for a panel discussion on the challenges in attracting and serving non-tech-savvy consumers into the digital ecosystem:

The average banking clients are today much more than just account numbers or account holders. The era of digital transformation with online shopping, focus on cashless economy and digital India has meant banks no longer can ignore the tech disruptions. Banks, however, face a dilemma as they press on the digital transformation accelerator. Not all clients are as tech savvy and some still rely heavily on traditional human touch and paper-based methodologies. The future is digital but banks face a huge challenge to bring all non tech savvy consumers including semi illiterate or less tech savvy consumers on board. .

DIGITAL - WORK IN PROGRESS

With the sudden onslaught of the covid and its immediate fallout, the focus shifted to ‘digital’ in a big way, but most banks were already following a roadmap to expand their digital umbrella for all consumers including the less tech savvy ones.

Sharing his experience as the Chief Operating Officer of UGRO Capital, Anuj Pandey shared how they started with the premise of digitizing and digitalizing together to handle problem of tech adoption and logistical hassles concurrently. Giving an example, Pandey shared how they at UGRO Capital are digitizing the sourcing via an intermediary for small business lending. “Typically, when a small business applies for a loan, it applies with a load of documents including balance sheets, P&L sheet, bank statements etc. Lenders over the years are also used to that physical touch and feel of such a file and documentation.”

Explaining how UGRO Capital changed the norm, Pandey revealed it developed a software platform that scanned all documents, digitizing them at the source while adding to the rule engine to ensure an instant decision making. Changing mindset, developing technology capabilities and integrating the same as a philosophy are what Pandey believes contribute to getting digital transformation truly embedded in the future. “In small business lending it’s not the lack of being tech savvy as a consumer but the complex digital ecosystem which is a challenge,” he added.

To make consumers incubate and be comfortable with U GRO Capital’s digital processes, Pandey says all it takes is one successful transaction proving how going digital was more a mental block at the consumer level.

“During the covid crisis we contacted our customers for a survey sent to them as a link on their mobile phones, and most consumers were comfortable answering the same,” revealed Pandey.

CUSTOMER ENROLLMENT JOURNEY

Tracing the journey so far to enroll nontech savvy customers, Vivek Chaturvedi, Marketing Head of Digit Insurance, highlighted the need to keep it all simple. Accessibility is one essential parameter, and rapid transformation happened mainly due this, he said. He also explained how paying using a barcode for daily chores may well have been pure fantasy some years ago but is today the norm as digital wallets are accessible to a large number of consumers.

Security and trust have helped nontech savvy consumers come on board after successful first transactions, he added, also pointing out that in the previous e-commerce journey of cash on delivery mechanism helped consumers build trust to buy digitally. The benefit and convenience of going digital has also helped consumers the digital plunge and the third parameter was simplicity in communicating with the consumers. Introduction of simple board games to help consumers understand the importance of insurance and having insurance documents written in a language easily understandable have been a few proactive measures implemented successfully in Digit Insurance.

Mohan Kumar Sahni, Head of Cards, Payments & Digital Banking at Utkarsh Small Finance Bank, shared how the challenges were paramount for banks when enrolling a semi-literate and non-tech savvy consumer.

As money is involved, the trust factor remains paramount along with security concerns for the consumer even in the first step and with majority of small shopkeepers, traders etc dealing predominantly in cash, it is also a difficult for banks to suddenly switch them to a digital ecosystem.

DIGITAL PAYMENT SYSTEMS TO THE RESCUE

The introduction of digital payments has to a large extent helped remove the initial barriers, said Sahni. “If you look at recent digital payment services like UPI and Aadhaar enabled payment systems, Google Pay, Phone Pay, etc all have played a major role in transforming the entire payment space,” he felt, stressing that convenience is what has been at the forefront of such a transformation at the consumer level. Once the consumers understood the power of digital, the process of onboarding even the non-tech savvy customer becomes that much easy, he added.

Sahni is of the view that rural is now almost at par with urban and semi-urban areas when it comes to using digital banking applications. The pandemic and the lockdown have actually made customers go digital. Earlier they were sitting on the fence when it came to digital adoption.

Giving an example from the insurance world, Vivek Chaturvedi of Digit Insurance explained how digital transformation for non-tech savvy segments like commercial vehicle drivers was smoother than anticipated. “While they assumed such consumers may be dependent on a physical agent to help them with their insurance needs, it was found that they are also comfortable in an online setting having vernacular online searches. The simplicity of digital setting and developing vernacular searches for insurance show that consumers across demography and irrespective of whether low- or high-tech savvy are adopting digital ecosystem provided the ecosystem is simple to follow,” he added.

IMPORTANCE OF COMMUNICATION

Communicating with the consumers is paramount and various industries use either mass communication or customized messaging to increase their digital footprint.

Anuj Pandey explained how customized campaigns helped U GRO Capital to communicate with the appropriate clients instead of mass communication. “The messaging should relate to the customer keeping in view the sector, the sub-sector and the challenges faced. “The use of chatbots have also led to high level of engagement with consumers compared to communicating over email or traditional forms,” he added, stressing on proactive communication.

On communications a Digit Insurance, Vivek Chaturvedi stressed on avid open communication with agents rather than mass communication with consumers. This, he said, helps in offering customized solutions, which are easy to manage for the end user. “Communication for us involves a lot of live video content that can ensure that users once adopting digital do not go back to the non-digital segment for further needs,” he added.

O n ma s s versus c u s t o mi z e d communication, Mohan Kumar Sahni highlighted on the importance of geo target-based communication for best results. “Personalized visual messaging has had a much higher success rate than mass marketing techniques. Communication in various vernacular languages and the use of smart short videos are collectively offering the best results for us at Utkarsh Small Finance Bank,” he added.

THE DIGITAL PUSH AND BUSINESS GROWTH ROADMAP

People are coming online and making more online purchases using digital channels, but to consider digital will offer a massive surge for enterprises to gain exponentially may be very industry centric, said Vivek Chaturvedi. He felt in some industries like insurance, a human touch remains much more relevant for new on-boarded buyers. “It’s going to be a hybrid journey with online, machine-based assistance channels like WhatsApp along with a human contact like an insurance agent as showed by successful European models” he said, maintaining that removing friction and hand holding support while onboarding new clients digitally are the 2 prime focus areas businesses across industries should have to drive scalability and growth.

Mohan Kumar Sahni agreed that a new normal post the lockdown is likely to bring multiple changes in the ecosystem. This alone can be an able driver for businesses to grow at a much faster rate provided they play their cards right. Sharing an example, he said Utkarsh Small Finance Bank has witnessed a 300% jump in customer registration in one and a half month, using digital. “Digital revolution in banking is already a work in progress; it offers a good chance for banks to maximize the benefits of digital channels thanks to a post covid era. The one big platform is likely to be on the acquisition side on QR based solutions,” he said.

The covid-19 aftermath will help customers move away from touch-based card payment systems to adopt either QR-based payments or use NFC-based contactless payments. This gives banks a good scalable opportunity to offer products and solution and in turn generate growth and revenue, he added.

OPENING COLLABORATION OPPORTUNITIES

All the three agreed that technology enablers will offer many more chances for all players, especially in the BFSI space, to work closely and opening up space for mutual collaborations.