The recipe to brewing a generation of financially literate consumers

Science? Check. Mathematics? Check. Politics? Double check. If there is one thing an educated Indian consumer still struggles with, it is money. How it comes, how it goes, and most importantly, how it works. 

For years, the BFSI (Banking, Financial Services and Insurance) category has strived to build awareness among consumers about the nuances of the financial system. And the efforts are appearing to materialise.

A few days ago, a record 6.77 crore ITRs (Income Tax Returns) were filed for AY 2023-24, with more than 5 million of them coming from first-time filers. More than 2 million ITRs filed in the FY 2022-23 came from individuals aged between 18 and 35. 

With new brands from the pockets of crypto, trading, and even investments entering the category, an opportunity arises to raise a generation of financially fluent Indians. But, what is the communication elixir to bring this to fruition?

The insurance category has been an active advertiser in the Indian market. But the communication mix for the sector has primarily been driven by the realities of accidents, impending diseases, and the age-old fear of death. But is the strategy effective in attracting up-and-coming consumers?

Nimish Agrawal, executive vice president and CMO, Niva Bupa, suggests that the younger cohorts who are evaluating the category do not buy into the fear narrative. “Health is on their side, and selling a category solely on establishing vulnerability is futile. They are more upbeat and positive. The narrative that resonates with them must mirror the same.”

Insurance as a category works on delayed gratification which is contrary to the way youngsters assign value to money, Agrawal points out. “There has to be a tangible benefit else the spend is seen as an expense vs investment for a rainy day.”

Avinash Pollepoly senior director- Crypto Business, ClearTax, points out that younger consumers are relatively more aware of the world around them, and this translates positively into the category. 

He says, “Thanks to digitisation, the youth today is much more aware than the previous generations. They have multiple sources of income and they don’t shy away from trying new instruments of investment.”

The onus is on industry leaders to provide a more accommodating ecosystem for novice investors. The key is in simplification, Pollepoly opines.

“Youngsters today want to handle their own finances and make their money work for them in the best way possible. And technology has made all of it much more accessible and simpler. So it is the cue for industry players to jump at this opportunity and create large-scale awareness because we have an audience now that has intent. Showing them the value in things instead of confusing/intimidating them should be the way to go. All they want is jargon-free, simplified content.”

Pollepoly also points out that the trend of growing financial wellness and awareness is fairly new in India, and has been on the upsurge post-pandemic. “Gen Z and millennials have prioritized it and many brands including ours have also taken this up to simplify these complex and seemingly overwhelming topics or concepts.”

But what is ClearTax doing to cater to this inquisitive audience? Pollepoly answers, “In-depth explainer articles and videos, shorts, reels, are all aimed at creating user awareness and engagement. There are many live discussions and webinars that we conduct throughout the year to connect with our audience and clarify the most pressing questions.”

Core to any such awareness building is the product. If the experience is really simple and seamless, users will adopt it as a result. “This way, we see the change in the behaviour of an entire generation. This is witnessed in online tax filing, investing and many other such activities,” he adds.

Unawareness and lack of interest aren’t the only dilemmas that the BFSI players are tackling when it comes to wooing newbies. Saurabh Pandey, who is the CMO of the financial investment platform Kuvera, underlines the prevalence of misinformation within the market.

“Siren calls of quick money through videos and social posts are targeting naïve minds. It's an army of so-called influencers feeding the frenzy to make fast money in the markets through online courses,” he says.

Tragically, thousands of youngsters and newcomers fall prey to these tricks. While the regulator does its job, Pandey reckons that it is also the responsibility of the industry leaders to fight this menace and ensure that it doesn’t lead up to a ‘misinformed and misguided’ generation.

In a bid to avoid consumer mishaps, the platform has undertaken activities to inform and educate youngsters about financial well-being. “We have a team to conduct financial literacy sessions at schools and colleges, to train investors of tomorrow.”

As per Akshar Shah, founder and CEO, Fixed, the caveat of approaching younger audiences, especially Generation Alpha, is catering to their worldly dispositions. That is, the youngsters are sufficiently equipped with information to decide which activities they wish to take part in.

“Generation Alpha are quite sensitive to the world around them. They want to be aware of the impact they are creating with their decisions. This is why there is a need (for BFSI players) to show them the purpose behind managing their money, and the impact of it.”

From an advertising viewpoint, this could be done through effective storytelling to educate them about the importance of savings and managing their money, Shah adds.