AI, digital solutions integration to bolster BFSI: Google McKinsey report

The integration of AI with digital solutions is set to enable India's BFSI sector to unlock access to its entire spectrum of products for over 700 million internet users in the country, according to a Google and McKinsey report.

Around 87 per cent of financial services seekers commence their consumer journey online, the report said, adding that nearly two-thirds find online channels more helpful for making a purchase decision over traditional channels. Approximately 40 per cent use search and about 31 per cent use online videos to help them with their decisions.

The report combines analysis of Google Search trends, revealing that online demand exceeded total purchases across all product categories by 3-5 times in 2022.

Credit cards, home loans and car loans were amongst the most searched products, enjoying amongst the highest growth rates in online demand, with searches focused on factors like innovative features and prices, the report, titled 'AI revolutionizes inclusion and profitability for financial services', stated.

Products with an established digital presence, such as life insurance and savings accounts, saw relatively lower online demand, but with much of the online interest being brand-specific.

Google India Director, Omnichannel Businesses Bhaskar Ramesh said, "India's extraordinary digital adoption and the success of UPI have paved the way for the BFSI sector to serve the needs of millions of internet users for whom digital has become the go-to channel for information on financial solutions."

In particular, the report points to a substantial opportunity for providers to serve the financial services needs of approximately 300 million people and extend to them the full advantages of digital-led financial inclusion, Ramesh said..

"As one of the early adopters of foundational tech, the BFSI industry is well positioned to integrate cutting-edge AI to create end-to-end omnichannel customer journeys that are personalized, privacy-preserving, and secure for customers, and profitable for the industry.

The report also spotlights the untapped digital demand across 18 categories of financial services, ranging across loans, insurance, deposit accounts, and investments like stocks and mutual funds, and highlights the potential for AI integration to bring more inclusive, customized and relevant experiences to internet users who are not yet availing BFSI products, such as retail loans, health insurance, life insurance, fixed deposits and UPI.