Financial Services Innovation for Bharat

Yashraj Erande Neetu Chitkara Nisha Bachani Dr. Amitoj Singh Rezul Setia Somya Singh Abhishek Mishra Shreyas Sriganesh

Rural and semi urban India constitutes over 65% of the country’s population and contributes to 47% of the nation’s GDP. Undoubtedly, integrating this Bharat into the financial services ecosystem is pivotal to ensuring an inclusive economic development but challenges such as low financial literacy, unsuitable products, complex banking processes, and limited formal credit access, lead 60% of these Bharat consumers to rely on informal lending. Having made notable progress in areas like telecom, internet, and healthcare access in Rural & Semi-Urban India, access to comprehensive financial services including savings, investments, insurance and financial planning solutions for this segment, will take us a step ahead in economic advancement.

With this context, BCG in association with the Reserve Bank Innovation Hub (RBIH) has highlighted the key challenges faced by Bharat, and has laid out a holistic framework for driving financial innovation. Financial services go beyond mere transactions, they encompass a wide range of tools that can empower individuals, nurture dreams and drive socio-economic progress. The success of FIs will depend on leveraging the right mix of technology, strategy and local insights to reach this underbanked community. This report lays out key insights from Rural/Semi-Urban consumers and introduces this framework to think about innovation for Bharat, which is hinged on 3 key elements: Desirability, Viability and Feasibility. It calls into action a multi-faceted strategy for financial innovation in rural India, involving all stakeholders across the value chain – Innovators, Investors, Incumbents, and Policymakers to create a future where financial empowerment is not a privilege for the few but a right for all.