Forget trends: For Financial Services, here’s your 2020 glossary

Financial Services

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 curve!
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 watching!
QR code - The ubiquitous square patch which customers have learned to scan and pay.
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 cards, etc.
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 to water.
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!