Weathering the Pandemic: BFSI Industry and Digital Marketing - Delhi Digital Marketing Agency
Weathering the Pandemic: BFSI Industry and Digital Marketing

Weathering the Pandemic: BFSI Industry and Digital Marketing

Eight months have gone into the pandemic, but the novel coronavirus persists to deteriorate health matters and the economy. Nobody must have anticipated what awaited them — staggering incomes, health concerns, loss of employment, and an uncertain future — all piled up together.

People on lockdown and businesses facing shutdown are the key points resulting in loss of revenue and a decrease in productivity. The sweeping decline in the economic operations stalks from the sectors that constitute it. The BFSI sector, being one of them, has also had an adverse impact, owing to the consecutive lockdown phases paired with sluggish opportunities.

The BFSI Industry as Pictured during COVID-19

The initial condition of banks and financial institutions was worse than expected. With uncertainty looming over and the present loss of cash flow and capital, the industry faced a big dilemma, as asserted under:

  1. Banks —

They are expected to encounter clients struggling with their current financial crisis — poor credit quality and ratings. The decline in prices of assets has had an impact on the books of banks. And, amidst these faltering states of affairs, many branches of some banks were eventually closed after considering the pleas of the bank unions. 1775 of the total branches of SBI and 289 branches of Canara Bank were among the thousands of branches closed during the lockdown due to the corona scare.

  • Insurance Companies —

The continuity and the prospective growth of insurers have been threatened as their assets and liabilities are getting affected. Broadly speaking, insurance firms are faced by considerable financial plus operational risks, which in turn, are impacting the cost of capital due to triggered markets. Many companies’ have seen a huge drop in their premium collections, too. For Example, Bajaj Allianz saw a drop at 21 per cent, the sharpest during April 2020.

  • NBFCs —

The fluctuations in the market situations compelled the firms to reassess their business models. Due to huge losses, many entities observed wiping out of a substantial amount of capital. Hence, they may also need capitalization to resume their trading operations.

Evaluating the Overall Impact

The impact of COVID-19 on the BFSI industry has been decoded, domain-wise, below.

  1. Credit Management: The economic crisis stemming from unemployment and reduced salaries has resulted in swelling of the number of loan defaulters. The borrowers are facing difficulties in repaying loans, and banks are reluctant to extend loans to small and medium enterprises. The incremental credit to small and micro-units has fallen by 7.6%, while it has dropped by 5.4% in case of medium scale enterprises.
  • Insufficient Funding: FinTech startups monitor a downtrend in investments due to the prevalent weak market conditions. As a result, the fall in revenue has put immense pressure on such firms’ existence. According to many consultancy firms, fintechs with puny business models will stumble unless they do not rely greatly upon investor funds.
  • Non-Performing Assets: According to an S&P Global Ratings report, the NPA ratio of Indian banks is likely to increase by 1.9% due to the current economic slowdown. This can result in the worsening of banks’ Credit Cost Ratios.In September 2020, the NPA ratio is anticipated to cross 10% under medium as well as severe stress circumstances.

Undoubtedly, COVID-19 has had a profound effect on customers and businesses in India. It has resulted in a change in consumer behaviour as people have started to prefer digital channels, and look for digital services. Therefore, the need for banks and financial enterprises to be future-ready with digital competence was discretionary until now.

Digital Marketing — a Silver Lining

In this era of digitally-empowered people, it is noticeable that most of the consumers of banking, financial and insurance services are living up to the hype. The proliferation of smart devices and the internet has induced the shift to digital media. A lot of banks have also joined the digital party and some of them are seen grooving to the right music!

For instance, ICICI Bank’s social media campaign, #FundYourOwnWorth, aimed at promoting financial fitness among women. It sought to empower women by giving them special benefits on their saving accounts. Social media storytelling was leveraged by the bank as it used real-life narratives of successful women to promote a niche product, simultaneously amplifying brand affinity.

Considering the competition faced by traditional finance companies from FinTech companies, it becomes absolutely significant for the former to retain its base. Moreover, banks and insurance companies ought to retain old customers and gain new ones as people have numerous alternatives to choose from.

And, here, we’re talking about such consumers, who devote a considerable period of time to the internet. So, as is evident, digital marketing is a feasible means.

The BFSI Industry’s Tryst with Social Media Marketing

Finance and Insurance are not necessarily boring. If coupled with the right kind of appealing content, they have the potential to be the most intriguing concept. And, nowadays, that is what we perceive banks, insurers and finance companies doing.

The State Bank of India has the maximum number of engagement across social media, thus making it the most popular bank online! Its regularity on platforms like Twitter, Facebook and YouTube is one of the main reasons behind the regard it enjoys on such platforms. The bank aims at educating and informing its customers through these mediums, and it has consistently been the chief priority in their digital marketing campaigns.

A financial services company, Chime, combines humour with financial tips and bits of advice to enlighten its followers on a regular basis. The company predominantly posts user stories, quotes, and information on its Instagram handle, which resonates with the users they look for.

Coming to insurers, LIC and Aviva India have been quick to gather online praise and attention. It might be surprising to learn that even India’s biggest insurance company, LIC, uses social media marketing to promote its services. Their online presence is a subtle indicator that a company, regardless of its profitability, needs to adopt the latest methods and technology to stay in the game.

These insurance companies have continually stayed abreast with festive occasions and fads to grow their online customer base. Aviva’s well-known “Want to Meet Sachin?” campaign on Facebook helped the company in connecting with its target group. As claimed by it, 95 per cent of Aviva’s potential customer base is online. Hence, it was not startling to expect striking digital marketing campaigns from the company.

Conclusion

People and institutions, both have been advised to restrict their activities and indulgence since mid-February. This almost made every individual and enterprise feel distressed in the beginning, but as time has progressed, adaptability is the clear winner.

As firms are modifying according to the pandemic it becomes equally essential to ‘adapt’ to the most preferred form of marketing nowadays — digital marketing. Not just retail, it has now become indispensable to establishments in every industry to market themselves properly. Thus, the BFSI sector is well recognising the need to stay in the marketing game as it has a terrific customer interaction rate under its belt!

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