With increased digital payments, a new model may emerge: digitally embedded bancassurance
In normal times, this rush would have been the joy of any banker. Never in the living memory of banking have people stood in long queues for hours to deposit their money into banks. A bank’s business is to accept deposits for the purpose of lending. Everything else is incidental. But somewhere along the line, their business models have changed. A key element of banking business now is to sell insurance. When did the banks become insurance agents? If you peep into the past, in 2000 the Insurance Regulatory and Development Authority of India (Irdai) was just formed and many Indian business houses were queuing up for licences to start insurance businesses. Not many knew about how to sell their products other than through an agency force. If selling any product is tough, selling insurance is tougher. It’s mostly a push sale and to push, you needed force. In science, if force is measured in Newtons (N), then selling insurance needed force 8N as compared to selling fast moving consumer goods (FMCG) at, say, 2N. So, insurance companies went about setting up a large agency ‘force’ to overcome customers’ resistance to buy on their own.