Capgemini Research Institute has come up with a study on Covid-19 and the financial services consumer analysing on how the global pandemic will change consumer behaviour in the financial sector.
The institute stated that it has spoken to more than 11,200 consumers in early April 2020 from 11 countries including India, the USA, UK, and China. The study found that pandemic has hastened the shift towards digital payments, increased digital channel adoption, spurred consumer interest in savings, and safer investments.
The key India findings from the report “Covid-19 and the financial services consumer: Supporting customers and driving engagement through the pandemic and beyond” including comparison with global counterparts are below:
The shift towards digital payments in India is particularly striking when the evolvement of consumer behaviourcan be seen among different segments, including older consumers who have traditionally preferred cash for transactions.
Eighty per cent of the older consumers in India between the age group of 56-60 years show the highest usage of digital payment channels in the next six months. This was followed by the age group of 36-45 years at 83 per cent. The global average for the increase in digital payment channels in the next six months between the age group of 56-60 years and 36-45 years stood at 43 per cent and 48 per cent respectively.
The report highlights that 80 per cent of the Indian consumers who are older than 66 years and above mentioned that they will increasingly adopt digital payment channels in the next six months compared to a global average of 35 per cent.
India ranks highest in the usage of digital payments in the current scenario and in next six months, mentioned the research study.
The study highlights that the usage of digital payments amongst Indian consumers in the current scenario stood highest at 75 per cent, followed by China (63 per cent) and Italy (49 per cent). The global average stood at 45 per cent.
The impact of Covid-19 on the use of digital touchpoints amongst Indian banking consumers has seen a significant surge from the pre-Covid-19 period to the current period and its expected use in the next 6-9 months. According to the study, 57 per cent of the Indian consumers were interacting on mobile app pre-Covid-19, increasing to 67 per cent in the current scenario; and 74 per cent of Indian consumers will prefer communicating over the mobile app in the next 6-9 months.
The study further mentions that 40 per cent of the Indian consumers were using voice assistants and chatbots pre-Covid-19 as one of the preferred digital touchpoints for banking, and this will see a surge to 52 per cent currently, and a further increase of 59% consumers preferring to use voice assistants and chatbots over next 6-9 months. This was the highest amongst the countries surveyed.
A similar trend has been witnessed in the insurance segment with 42 per cent of the Indian consumers using voice assistants and chatbots pre-Covid-19, which will see a surge to 57 per cent of consumers using voice assistants and chatbots in the next 6-9 months for their insurance.
The study highlights that 85 per cent of the Indian consumers prefer to save more in the next 6-9 months as compared to 80 per cent in the current period and 72 per cent pre-Covid-19.
Additionally, it has been observed that 77 per cent of the Indian consumers are preferring to increase their savings in safe instruments than investing in the stock market or any high-risk financial products in next the 6-9 months.
Earlier, this stood at 73 per cent in the current scenario and 66 per cent pre-Covid-19.
The demand for insurance coverage is growing and highest in India compared to global counterparts.
The study unveiled that India stood highest is increasing demand for insurance coverage with 83 per cent of the consumers opting for an increase in Life insurance coverage in the next 6-9 months from 80 per cent currently; and 70 per cent in the pre-Covid period.
A similar trend was witnessed on demand for Health Insurance with 84 per cent of the consumers opting for an increase in Health insurance coverage in the next 6-9 months from 80 per cent currently; and 71 per cent in the pre-Covid period.