Storyboard18 | Why BFSI brands are doubling-down on financial literacy campaigns

Even as players in the BFSI sector continue to work towards financial literacy, only 24 percent of the Indian adult population is financially literate, according to a report by the Global Financial Literacy Center. Image: Shutterstock

Be it fraud prevention, importance of retirement plans, or understanding of markets, the BFSI (Banking, financial services and insurance) sector is banking on financial literacy campaigns to spread awareness and onboard clients especially from the millennial and Gen Z population segments.

Players in the space are also roping in celebrities such as Amitabh Bachchan, Sachin Tendulkar, MS Dhoni, and others, to be the face of various campaigns that promote financial literacy.

More than 100 campaigns with a sharp focus on financial literacy were released in 2021 and organisations are now using up to 50 to 60 percent of their marketing budget on promoting financial literacy in various ways.

The Association of Mutual Funds in India (AMFI) has been working with Dentsu, JWT and Mirum India for ad buying, creative, and digital initiatives since 2017. While AMFI started with investments to the tune of Rs 130 crore in 2017, today, the body spends close to Rs 200 to Rs 250 crore to create financial literacy campaigns—that’s almost 100 percent of its marketing budget on creating awareness campaigns.

“Our agenda is simple. We want to demystify mutual funds and add more people into the community. We have roped in cricket celebrities such as Shreyas Iyer, Mithali Raj, Rohit Sharma, Sachin Tendulkar, MS Dhoni, and many other popular faces in the last two years so that we can attract the younger generation,” N. S. Venkatesh, chief executive of AMFI, tells Storyboard18.

After focusing on TV, print, radio and outdoor, AMFI is now diverting resources towards digital. “We want to create campaigns for social media platforms and OTT to create a buzz around mutual funds and catch the attention of Gen Z investors,” Venkatesh says.

Marketing smart investment habits  

The overall spends and ad volume from the sector have also gone up in the recent past. According to latest TAM AdEx data, on digital medium alone, ad insertions grew by 30 percent between January and August 2021 compared to the same period last year. Turns out there were close to 240 brands from the sector advertising during the period across platforms.

The top five categories in the sector included life insurance, securities and sharebroking organisations, mutual funds, corporate-financial institute, and housing or construction loans. The top five advertisers in the period were ICICI Prudential Life Insurance Company, SBI Life Insurance Company, Motilal Oswal Securities, Nippon Life India Asset Management, and Life Insurance Corporation.

Experts say more than 50 percent of advertising from the sector focuses on ‘education’ and not merely customer acquisition.

The momentum of financial literacy campaigns especially around handling digital wallets and UPI [unified payments interface] picked up during demonetisation and hasn’t slowed down since.

“To help the next billion users access financial services online, many of our launch campaigns have been awareness initiatives first and advertisements for the product second.

The industry has surely grown by leaps in a country where bank deposits and government bonds were once the height of financial literacy for the average investor,” says Anubhav Sonthalia, CEO, Dentsu CXM India & Merkle Sokrati India.

The agency that works with fintech startups, insurance companies, and mutual fund brands has seen a rise from users in small towns and cities as a common trend, pushing players to invest more in awareness campaigns.

Ramsai Panchpakesan, senior vice president and national lead-integrated media buying, Zenith, says that most of the demand is coming from the non-metro markets where financial literacy is still very low.

“Financial literacy in India is only about 27 percent to 30 percent, which means we have to go a long way to educate the consumers. However, most of the growth in availing and subscribing financial products will come from the non-metro markets, and that is where financial companies are focusing,” he says.

According to him, digital penetration in the non-metro markets is an enabler for promoting direct-to-consumer connect that helps in bypassing middlemen and strengthening cross-selling.

Focus on Bharat

Focus on the ‘Bharat’ or rural India market is a priority for most players marketing financial products amongst youngsters.

Stock broking company Angel One is one of the many companies concentrating on educational content to attract millennials from non-metro markets.

“We are a fintech brand that wants to cater to the ‘digital native’ audience—GenZ and millennials— especially from Tier-2, Tier-3, and cities beyond that. We are focused on empowering first-time investors with a robust financial education,” says Prabhakar Tiwari, CGO, Angel One.

“We are educating the investors about IPOs through our content library, informing them about the actionable steps and insights, and developing real-time analysis of upcoming IPOs on the fly,” Tiwari adds.

Angel One creates content in multiple formats such as videos, podcasts, webinars and blogs in both Hindi and English. Videos, for instance, are explainers on topics like ‘what is ELSS and what are its advantages’; ‘5 reasons why one should choose equity over FD, gold and real estate’; ‘how and when to buy your first stock’; ‘what is an IPO and how it works’, and so on. The original content created by the brand is amplified through platforms such as YouTube, Instagram and Telegram. “Our aim is to create a digital-first community on each of these platforms and contribute to build financial awareness among the first time investors,” says Tiwari.

Catch ‘em younger

While millennials and Gen Z are the most popular target group for the financial institutions, for new-age fintech startups like Junio and Fyp, the idea of catching them young has a new definition. These brands are designing campaigns to educate young children about investments.

Junio, a brand that provides children with their own smart card for all their online and offline expenses, is investing 50 percent of its marketing budget on creating educational campaigns.

“We are targeting both parents and children through our campaigns and, alongside creating our own campaigns, we are also promoting user-generated campaigns that come to us from our clients,” says Shankar Nath, co-founder of Junio.

Junio has content like card unboxing videos that have high engagement on digital platforms, and help the company in driving growth, reach and customer acquisition, according to Nath.

The kids-focused digital pocket money startup, crossed 50,000 users within just a month of launch in June 2021. The company has raised a total of Rs 150 million (approximately Rs 15 crore) in their seed round, and plans to utilise the funds to further develop its product, strengthen the team, and launch customer acquisition initiatives, which includes creating more campaigns for TV and digital.

The bottom-line

Even as players in the BFSI sector continue to work towards financial literacy, only 24 percent of the Indian adult population is financially literate, according to a report by the Global Financial Literacy Center. The need to push the number higher is becoming stronger with increasing cases of debt trap coming from across India.

According to an RBI Working Paper Series titled 'Persistence of Rural Credit in India', 42.9 percent of the Indian population borrows money from informal sources such as commission agents and money lenders, who charge high rates of interest while also killing businesses in the formal sector.

As Panchpakesan of Zenith puts it, the increased focus on financial literacy by the BFSI sector is an attempt to get rid of the middlemen and help investors across socio-economic strata make informed decisions when it comes to saving, borrowing or investing.

The thoughts and opinions shared here are of the author.