The rate of improvements in the Banking sector over the past few decades was outstanding, but the growth after the covid-19 hit has been unimaginable. The novel coronavirus will cross the barrier of China in 2020, and since then over the past 18 months, the BFSI industry has faced different challenges. Before the coronavirus pandemic, this industry was at the inflexion point, but the foundational movement in customer behaviour has lifted off its transformation. Ascending cost pressures, Big Tech, growing competition rate, Fintechs and improved regulatory pressure are continuously developed. If you notice it, t was a perfect initiation of changes
Let’s describe the BFSI Industry picture at the time of Covid-19
Banks: They are expected to meet consumers’ pain points with their recent financial crisis including poor credit quality and rating. The backsliding in the cost of assets has had an immense impact on the chequebook and passbooks. Still, in this faltering state of affairs, many branches of a few government and private banks were eventually closed after allowing the petition of the bank unions.
Insurance Company: The consistency and prospective growth of insurers faced challenges as their assets and liabilities were getting affected. Elaborately speaking, Insurance firms were facing challenges by considering financial plus operational uncertainty, which in turn, are affecting the price of capital due to triggered markets.
NBFCs: The inconsistency in the market conditions convince the firm to recheck their business framework. Due to immense losses, many entities were gradually eliminated from the substantial amount of capital. Hence, they also require essential capitalization to proceed with their trading operations
Now we’ll evaluate the impact of Covid-19 on the BFSI industry
Here we’ll explain the matter domain-wise
Credit Management: The economic crisis comes from unemployment and salary cuts which eventually promotes an increased number of loan defaulters. The borrowers come across challenges in repaying loans, and banks are not interested in extending loans to small and medium enterprises. The cumulative credit to small and micro units has been reduced by 7.6%, in the case of medium scale enterprises that dropped by 5.4%.
Inadequate Funding: FinTech startups are monitoring a decreased trend of investments due to very poor market situations. As a result, the huge fall in revenue has developed enough pressure on Fintech Firms and they get in secured for their survival. As per many consultancy firms, Fintech with an inconsequential business framework has stumbled unless they receive huge investor funds.
Non-performing Assets: As per the S&P Global rating report, the NPA ratio of Indian banks is likely to increase by 1.9% due to current economic stagnation. This can gradually deteriorate the bank’s credit cost ratio. In September 2020, the NPA ratio is supposed to cross 10% under medium and extensive stressful conditions.
Digital Marketing Here comes as the ray of hope: A silver lining in dark cloud
In the era of digital marketing, people are becoming more tech-savvy. Basically, they become digitally empowered. You may observe that the maximum consumers of banking, insurance, and other financial services are living up to the hype. The evolution of smart devices and the online has given strong stimulation to convert everything into digital media. A large number of banks are also associated with the digital party and some of them are growing through the right music.
For example, ICICI bank run the social media campaign #FundYourOwnWorth, intended to promote financial fitness among women. The campaign is basically created to empower women by providing them special benefits over their savings accounts. They leverage the potential of social media storytelling in their advertisement campaigns. They also use real-life narratives of women entrepreneurs who run successful businesses from small investments. Considering the competition faced by customary finance organizations from FinTech companies, it turns out to be totally huge for the previous to hold its base. Also, banks and insurance agencies should hold old clients and gain new ones as individuals have various choices to browse.
And here we are discussing such consumers who invest considerable time on the internet. Therefore, it has been proved that digital marketing plays a feasible role in the BFSI industry.
The BFSI Industry use Social Media Marketing for their Growth
The Finance and Insurance sector is gradually becoming interesting in social media. Social media and its narrative storytelling marketing strategy make it appealing to users. They have enough potential to discover the most intriguing concept. Presently most of the private bank, insurance and financial sector runs advertisement campaigns through social media.
Do you know the state bank of India has the maximum number of engagements across social media?
Yes! It is absolutely true. Social media makes SBI the most popular bank online. Social media channels like Facebook, Twitter, and YouTube are some of the main reasons behind its popularity. The bank intended to educate and inform their clients through social media platforms, and it has become their topmost priority in digital marketing campaigns.
Now the BFSI industry collaborates with SEO India and promotes their services with financial tips through social media. They ask their consumers to follow their social media page to get regular updates and notifications. It is considered to be a smart initiative taken by banks, LIC and Insurance companies.