Forget trends: For Financial Services, here’s your 2020 glossary
28 Dec 2020
Phew! What a year! Rarely have there been more eventful years.
Here’s a look back at financial services 2020.
- Adaptation - Covid was one of those Malthusian catastrophes, fortunately not so much for human life, but certainly for business and corporate health, and forced individuals, families, businesses, and economies to adapt. For the resilience and workmanlike adaptation demonstrated by customers, businesses, and even regulators, adaptation was the A-lister trend of 2020.
- Broking - Was undecided between broking and bailouts – remember that have had two
fairly large bank bailouts this year. But for an industry that has remained
unsung for so many years, this has been an inflection point, not just in India
but globally as well. The number of new-to-broking customers has surpassed all
past records; this is also one industry where we have a shining example of a
fintech player not just gaining market share, but also making serious money!
- Capital - Well, actually it's COVID, but then that would really overshadow
everything else, including the not-so-strong banks who are not
well-capitalized. This is why I chose capital – it will separate the men from
the boys, so to speak.
- Deleveraging - Digital would have been so passé… As growth stuttered and business
volumes even fell, corporates and individuals (at least those who could afford
it) started to rightsize their balance sheets and set themselves up for the big
growth story that India still remains…
- E-commerce - For being the big growth story and a key contributor to the resilience
of junta like us… Looking at the experience of my circle, it does look like
e-commerce has broken into customer personas that otherwise would have always
preferred to go to a shop and buy stuff!
- Foreign - We love that term, isn’t it, from foreign capital to foreign trips and
even foreign hand! Well, for one, there were bundles of foreign capital that
poured in across private and public markets. As for foreign trips, neither the
high-flying investment banker types nor the humble insurance sales teams could
make it this year
- Growth - Conspicuous by its absence this year, but swinging wildly from degrowth
of ~23% to what looks like a rebound in double quick time, we are already talking
of basking in the glory of the base effect next fiscal… The other contender was
gold (including gold loans), which is a near-perfect inverse of the growth
- Health insurance - Possibly the fastest growing revenue-earning product in financial services
in 2020 (remember that payments don’t much revenue). Indians took to health
insurance as if there was no tomorrow, but one does hope that this is a secular
trend in a category plagued by low awareness and penetration.
- IWG - The report of the Internal Working Group of RBI on allowing corporates
to enter banking caused a flutter in financial circles. One wonders what the
trigger was but do watch this space for more action in 2021.
- Jobs - Will digitization kill jobs – this is the elephant in the room as we
make rapid strides to a less-paper and less-cash system. The jury is out on
that, but one thing is certain – jobs will never be the same again.
- Krishi Bill - Like a batsman coming in the final overs and changing the course of the
match, the Krishi Bill (actually two bills with titles that have more words
than can be scored in an over) has the potential to change the course of
agriculture with deep ramifications on rural incomes and credit.
- Liquidity - Ample amounts of it, and kudos for RBI to make sure that liquidity was
not in short supply as the economy went through some serious pain. The flip
side, of course, was that savers felt deprived, but then you can’t have it both
ways, I guess!
- Moratorium - 2020 will be remembered for not one, but two types of moratoriums – one
which allowed borrowers to defer their loan repayments, and the other that
prohibited depositors of a couple of banks from withdrawing more than a certain
amount of money from their accounts.
- Neo-banking - Is this the time that neo-banks, at least the Indian variety come of
age? There is certainly no dearth of aspirants – Jupiter, Niyo, Razorpay, Open,
to name a few. Having said that the desi version of neo-banks is much more
conservative, and perhaps it's better that way.
- Omnichannel - Banking has an on-off relationship with this term – we first heard of
this term when ATMs and call centers became big, and then again when mobile
banking took off. The industry has a chance once again to build a truly omnichannel model where customers can roam seamlessly between their apps,
internet banking, branches, call centers, chatbots, etc. maybe this time we
will get it right!
- Puri premium - A salute to possibly the longest-serving bank CEO in India and arguably
the most successful one as he hung up his boots earlier this year. It’s now up
to the team there to see if they can fill his large shoes – and investors are
- QR code - The ubiquitous square patch which customers have learned to scan and
- Restructuring - Yes, it’s here once again, but clearly more measured than earlier. Only
borrowers who were standard pre-COVID can benefit from the scheme and that too
only for two years.
- Soonicorns - This time it’s different - Fintechs that appear to be on track to become
unicorns are an interesting and varied mix of B2B2C and B2B models, and some
niche ones that focus on specific categories like supply chain finance, credit
- Technology - Technology is perhaps more apt to include in this list than digital, it
encompasses the entire spectrum across customer-facing apps, analytics,
customer service applications, RPA, and even infrastructure that has ably
supported the entire economy in the COVID phase.
- UPI - No surprises here, UPI volumes have shot through the roof and catapulted
India on the global stage as an innovator at scale.
- Video KYC - The timing of the Video KYC guidelines by RBI was spot-on and banks,
insurers, asset managers, brokers have all taken to this enablement like a duck
- WhatsApp Pay - Toss-up between WFH and WhatsApp Pay, but given the buzz that
accompanied its launch including the very interesting regulation on market
share cap, WhatsApp Pay takes the stage for me!
- Xinja - A failed neo-bank in Australia. Timely lessons!
- YONO - A successful neo-bank in India – probably the largest neo-bank globally!
- Zoom - This doesn’t refer to the pace of GDP growth, but rather to the ubiquitous
platform that many of us depend on, including some like yours truly for whom
Zoom was a TV channel till COVID hit!
Contributed by: Shishir Mankad, Head, Financial Services Practice