The entry of a substantial number of new, differentiated banks is an overarching growth driver for the financial distribution segment, says a CII-PwC report.

The other three growth drivers for the segment include providing an impetus to change in the delivery and consumption of financial services, demographic factors, technology changes and regulation, it said.

As non-banking digital companies and new banks, premised on low cost-high tech models to deal with low value—high volume customers, make their mark in the banking universe, the delivery of financial services must be re—imagined by the supply side, it added.

The report has identified how the future will be different from what it is today and how financial institutions, distribution channels and agents can respond to this change to capture new opportunities.

The ability to harness transaction data on new customer segments possessed by payments and small banks will allow cross—selling of comprehensive financial services to lower income customer segments through intelligent combinations of mobile and physical delivery channels.

The upwardly mobile middle class, which has traditionally been the favoured customer of financial institutions, will see ‘choice’ expand, both in terms of products and service providers, it said.

With digital becoming the increasingly popular media for sales initiation, simplicity in products and transparency in charges are expected to become a commonplace consumer expectation.

In their other facets of life, consumers, particularly those using mobile phones, are responding enthusiastically to the app—based delivery of services, intuitively learning and responding to simplicity of design and communication by accepting the alternatives that work and rejecting many that do not, it said.

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