Is digital the new darling of the BFSI sector?
Key players are channeling a fair share of their budgets towards creating innovative digital properties that connect with their consumers
Digital ad spends are expected to grow at 35-40 per cent in 2014, though some other analysts and marketers project the growth will be much higher. One sector that has taken to the digital medium like the proverbial duck to water is the Banking, Financial Services and Institutions (BFSI) sector. According to the Pitch Madison Report, the percentage share of BFSI sector in print and TV has seen a decrease over the last couple of years. (PITCH Madison Advertising Outlook 2013), however, the spending on digital medium has seen an upswing.
Says Vishal Sampath, CEO at SMG Convonix, “The BFSI sector leads the online spends among all the traditional sectors (behind the e-commerce players and OTAs). The primary reason for this is that with online conversion tracking and fulfillment, it is easier to demonstrate business impact and ROI in these sectors. For example, we can track the entire conversion process from the person looking at a banking or insurance product to him or her converting. This makes it easy for the management to see an actual business impact and compare the efficiency of this medium versus other traditional channels.”
Most BFSI players we spoke to, admitted that spends on digital medium have increased in the range of 20-25 per cent over the last year, with a similar growth expected in the coming year. HDFC Life Insurance has been one company making a conscious decision to increase investment in the digital medium.
In fact, said Sanjay Tripathy, Senior Executive Vice President (Marketing, Product & Direct Channels) of the company, there has been a conscious decision taken to maximize digital as part of the internal strategy. “The other side to our strategy is how we can substitute digital for other media wherever possible. Basically, we are looking at how we can have digital-led campaigns rather than TV-led campaigns,” he added.
Kotak Mahindra Bank launched its “Twitter Banking” earlier this year, which allowed account holders to carry out a host of functions like checking available balance, receive updates, etc. through their Twitter accounts.
What draws BFSI companies to the medium?
So what drives BFSI companies to the digital medium? For Jaimit Doshi, Head (Marketing & Product) at Kotak Securities, the ability to exactly map leads makes it a no-brainer. “Our incremental budgets are all going into digital. We believe digital is the future,” he said. Apart from shifting consumption patterns, which is obviously a major factor in why brands are exploring the digital medium, another reason is a change in the ‘Research online, Buy offline’ philosophy. As Tripathy told us, people are now researching online and even buying online. The entire experience has shifted online. Which is why brands like HDFC Life Insurance have invested resources and time to build a comprehensive digital footprint and why banks like Kotak Mahindra are exploring new platforms like Twitter to get closer to the consumer.
This does not mean that funds are getting funneled out of mass media like print and TV, but as in other segments and perhaps more so, it is the digital medium that is generating interest. Also, not all products might be suitable for the digital medium. Explains Ajay Kakar, CMO of Aditya Birla Financial Services, “In absolute terms, the spending on digital is still minimal, but yes digital allows you more focused communication, more focused targeting and it is more measurable. Digital is still preferred but I won’t make a sweeping statement in financial services. If you have a vanilla product, OTC product, digital works well in selling. Because in a term insurance price is the only difference, so a consumer will compare and shop. But some of the financial services products are very complex and therefore I will not generalize that BFSI equals digital or digital equals BFSI.”
Having said this; the digital medium is becoming important from even a knowledge and awareness facet. Companies like HDFC Life Insurance and Tata AIG Life Insurance have invested in creating digital properties that provide customers and potential buyers a one-stop window to answer all their queries about the various products. Thanks to such properties, customers can now compare different products and then invest in the ones they feel are the best fit for them; a procedure that at one point of time would require a physical trip to a branch. Perhaps this is the benefit the digital medium provides to the BFSI sector and which is why we are seeing increasingly strong investments in this medium.
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