Financial Inclusion in India: Tech’s Impact on BFSI and Jobs

How Technological Advancements Aid Expansion and Impact Job Creation

Earlier this year, the Finance Minister emphasized India’s need for significantly larger banks, potentially three times the size of SBI, to meet increasing demand. This highlights critical growth imperatives for the sector. The move towards technology-driven financial inclusion has greatly influenced India’s job market, creating a demand for skilled professionals.

For instance, job growth in the BFSI sector spans various levels: Entry-level positions (0-3 years) account for 23%, intermediate roles (4-6 years) for 21%, and mid-senior level positions (7-10 years) for 16%. There is strong demand for BFSI jobs in India particularly for sales and tech roles, driven by the sector’s focus on expanding digital services and improving customer engagement. The need for salespersons to promote credits is increasing, prompting the hiring of 25-30k frontline salespersons in Q1 alone, with expectations for further growth as demand rises and infant attrition remains a persistent challenge in the sector.

Recent data highlights remarkable growth in credit card sales, insurance, and demat account openings. India, traditionally not credit card-centric, is witnessing a shift with over 100 million cards in circulation, representing a 5.5% penetration among its 1.4 billion population. The introduction of UPI-based credit cards is expected to further boost growth, with FY24 transactions totaling Rs 1,64,586 crore, up 20% from the previous year. Demat accounts have surged to 150 million, highlighting significant workforce involvement in their management. The insurance sector employs over 2.2 million sales agents, underscoring its expansive reach and employment potential.

Technology significantly enhanced sales efficiency and reach across sectors. Salespersons use CRM systems and digital tools for precise audience targeting and effective customer relationship management. Digital platforms streamline onboarding with e-KYC processes, ensuring swift and secure client verification. Automation and AI-driven analytics provide insights into customer behavior, enabling personalized sales strategies and higher conversion rates.

The industry’s evolution requires upskilling new entrants to meet standards and foster financial inclusion in untapped regions, expanding banks’ outreach capabilities. Moreover, the BFSI sector is increasingly focusing on temp staffing to manage its varying demands. This approach offers flexibility and caters to the sector’s evolving needs, ensuring that skilled professionals are available for short-term assignments and peak times. By prioritizing temp staffing, organizations can quickly adapt to market changes and maintain a competitive edge. Temp staffing thus becomes a crucial strategy for staying agile and responsive.

Future Directions and Conclusion

Looking ahead, technology-driven financial services in India show great promise. AI and machine learning will enhance personalization and efficiency, while blockchain technology will revolutionize cross-border payments and smart contracts, promoting financial inclusion. However, challenges such as digital literacy barriers in rural areas and cybersecurity threats persist, requiring educational initiatives and balanced regulations.

As India advances towards becoming the world’s third-largest economy, with a projected GDP exceeding $7 trillion by the decade’s end, financial inclusion will play a crucial role. Expanding the BFSI sector and leveraging fintech innovations present significant opportunities, but the existing skill gap in the Indian workforce is a major challenge. This gap needs to be addressed through specialized education programs, industry-academia collaboration, and government support.

At TeamLease, we understand the critical need to address the skill gap in the BFSI sector. Our offerings encompass skilling, reskilling, and learning & development (L&D) programs specifically designed for the BFSI industry. With a strong history in staffing and recruitment, TeamLease is dedicated to closing the skills gap and facilitating a smooth transition to the future.

Unlock the potential of India’s workforce with TeamLease’s industry-focused skilling and staffing solutions. Contact us to discover more about our services!