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The financial sector could pick up a few tips from how companies market products like soap and toothpaste.
Justice Srikrishna noted how the fast moving consumer goods segment studied the consumption patterns of rural India and implemented a program which resulted in greater penetration in the non-urban space.
“They study the aspirations and spending habits of rural population to deliver the best value for money and inculcate a culture of spending on their goods, imbuing in them a sense of greater empowerment and satisfaction,” he said speaking at the Confederation of Indian Industry’s (CII’s) Financial Distribution Summit.
The financial services segment too could learn from the same, he said, according to a press-statement issued about the event.
“Similarly, the foremost task of the financial distributor is to empower the consumer with knowledge to achieve their financial goals and instill in them the discipline of regular savings in financial instruments. This would wean them away from their ingrained habit of not trusting any investment other than physical assets. Their next task should be to engage in right selling after assessing the risk profile of consumer, his long term goals, his levels of understanding and his needs. This ensures that through all cycles of markets, sustainable wealth will be created in the long run,” he said.
C Jayaram, Chairman – CII Financial distribution Summit 2013 and Joint Managing Director, Kotak Mahindra Bank Ltd suggested that rural areas represent an untapped opportunity.
“Financial service businesses have not yet unlocked the value present in rural and semi-urban markets. They are yet to establish a profitable business model which will be able to meet the specific requirements of the low-income group,” he said.
Ninad Karpe, Chairman, CII Maharashra State Council pointed to blocks which affected penetration.
“Penetration in rural and semi-urban markets has largely been driven by regulatory push because despite the opportunity which exists in these regions there are multiple roadblocks like lack of infrastructure, low financial literacy and absence of a strong distribution channel,” said the chairman.
A rural push requires different skill-sets noted Ranjeet Mudholkar, Vice Chairman and CEO, Financial Planning Standards Board India (FPSBI).
“The skill set required to make inroads in rurban segment is materially different from those required in a metro. Distributors and financial advisors need to fine-tune their soft skill including negotiation skills to effectively realise the potential in the segments,” he said.
