43% of Indian Consumers have Witnessed Decline in Household Income Since Onset of COVID-19: Experian Global Insights Report

* Experian’s research shows major shifts in consumer behaviour and business strategy pre- and post-COVID-19, with economic perception at the epicentre

The pandemic has created a seismic shift in the volume of online activity and experiences in the past few months. Experian’s Global Insights Report, one of the first large-scale surveys assessing the impact of COVID-19 on businesses and consumers explores the major shifts in consumer behaviour and business strategy pre- and post-COVID-19, with economic perception at the epicentre. According to the report, 43% of Indian consumers have indicated that their household income has declined since COVID-19, thereby, being concerned about their well-being. Not just consumers, even businesses have been concerned about the well-being of their customers. This is evident in the fact that 53% of Indian businesses have highlighted health & safety of customers as the biggest challenge.

Experian – a leading global information services company – surveyed 3,000 consumers and 900 executives working in retail banks, e-commerce, consumer technology and telecommunications. Respondents spanned India, Japan, Singapore, Australia, Brazil, France, Germany, Spain, the United Kingdom and the United States. The survey was conducted in June and July and covered consumer and business economic outlooks, financial well-being, online behaviour and more.

The report also says that 74% consumers in India more strongly indicated that businesses are doing a better job at communicating about the use of their personal data since COVID-19. This shows that not only are people relying on mobile and digital channels to bank, shop, work and socialise, they’re also closely watching how businesses respond to their needs.

Key highlights for India from the Experian’s Global Insights Report - Consumer Survey:

* Increase in activities online during the pandemic as compared to before - General Media (46%), OTT (42%) and Online Grocery Shopping (42%) being the top three online activities

* Approx. 50% of consumers expect an increase in online spending; both the short-term and within the next 12 months

* Consumers face challenges in paying internet/cable (36%), utilities (35%), credit card (33%) and mobile phone (32%) bills; a significant increase from the pre-COVID-19 days

* Consumers have taken significantly stronger actions in almost every possible way to deal with their current financial circumstance; Creating / using more personal budget (31%), reducing discretionary spending (25%) and saving more in emergency funds (24%) are the top three actions currently taken

* India has seen the largest incremental growth in the use of digital banking and payment methods since COVID-19, with 16% increase in the use of mobile wallets and 14% increase for retail apps

* Indians indicate high concerns regarding conducting activities online - Credit card being stolen (42%) and Online privacy (41%) being the top two concerns

* Consumers are most trusting of retail banks (69%), technology providers (75%), payment system providers (72%) and streaming services (71%)

* There has been an increase in the number of consumers (76%) wanting to know what their data is being requested for

* Financial data (38%) is the type of personal data that consumers are most concerned about protecting; followed by protection of personal information (19%)

* Consumers expressed the highest willingness (39%) to share personal data since COVID-19

* 70% of consumers want more control over their personal data. Furthermore, consumers in India are driving the APAC increases from pre-COVID-19 period – opening new online account (+7% jump to 52%), opening bank account (+6% jump to 50%) and applying for credit card or loan (+6% jump to 47%)  

* Indian consumers feel the most secure with physical biometrics (96%) and the use of PIN code (90%)

Commenting on the consumer findings for India, Sathya Kalyanasundaram, Country Head and Managing Director, Experian India said, “The impact of the COVID-19 pandemic has caused both businesses and consumers to shift their priorities. With social distancing becoming the norm, consumers have had to get out of their comfort zone by letting go of conventional methods and adapting to the digital way of conducting their daily affairs. This also means that banks and financial institutions must be very careful in how they treat consumers in these tough times. Our data shows that 54% of customers would give an organisation more business if they felt they were treated fairly during the pandemic, higher than the APAC figure of 41%.”

He further added, “At Experian India, we believe that consumers should be in control of their data. In keeping with this, we enabled free and unlimited credit report downloads from our website whilst continuing to educate consumers on financial prudence in this challenging period.”

The survey also found that since the start of the pandemic, top priorities for businesses include the health and safety of their customers and employees, as well as adjusting their operations to ensure business continuity. Organisations are utilising digital solutions to manage customer credit risk, with 26% planning to use on-demand cloud-based decisioning applications.

Key highlights for India from Experian’s Global Insights Report – Business Survey:

* 53% of Indian businesses indicate health & safety of customers as the biggest challenge; followed by 48% health & safety of customers and 38% operational adjustments

* Since the pandemic, nearly 40% of businesses in India and Singapore have implemented strategies related to recognizing their customers across their various platforms – the highest within the APAC region

* Customer authentication solutions receiving the most focus involve Know Your Customers (50%), security measures in customers’ devices (49%) and multi-factor/two-factor authentication (48%)

* Since COVID-19, the most common fraud detection and protection methods include security measures in customers’ devices (20%), physical biometrics (19%), Customer Identification Programme (17%) and PIN codes (16%)

* 82% of Indian businesses indicate the highest intention to increase fraud management budgets in the next 12 months as against 69% in APAC; however, 61% businesses are much more likely to place a focus on revenue generation than putting resources on fraud detection as compared to 47% in APAC

* High intention to implement policy rules (31%), automated decision management (30%) and hybrid of business rules (29%) are the top three solutions most used to assess & manage customer credit risk and credit worthiness

* 84% of Indian businesses are increasing their budget for analytics and customer creditworthiness in the next 12 months

* There has been an erosion in the confidence of businesses in India in the effectiveness of analytics models related to consumer credit risk (from 83% to 76%) and consumer collections decisions (from 81% to 76%)

* Nearly 81% of the businesses have increased an adaption of Artificial Intelligence to help manage their businesses in the current marketplace 

* Businesses have re-examined their existing analytics models and are looking for ways to improve with 24% relating to the hybrid approach to analytics models

* 99% of the businesses in India strongly consider (very/somewhat) the lack of historical data and its impact on analytics performance; to make up for this lack of historical data, 67% of businesses prefer asking customers to contribute more information

Commenting on the business findings for India, Sathya Kalyanasundaram, Country Head and Managing Director, Experian India said, “I have always believed that challenging times present the best opportunities. While businesses have had to grapple with the onslaught of the pandemic initially, we have also witnessed greater agility and adaptability in the banking, financial services and insurance sector. We are working closely with financial institutions by providing them with on-premise and cloud-based solutions. Experian’s latest cloud based PowerCurve suite of decision management solutions enable companies to automate decisions across an increasingly complex customer journey. We provide the option of pre-configured solutions for organisations that prefer standard, ‘out of the box’ applications, as well as solutions that can be tailored to their infrastructure and requirements for rapid deployment, so clients can quickly adapt their decisioning strategies to minimise risk, preserve valuable relationships and remain fair and compliant.”

An example of a bank successfully digitising their processes on the cloud is AU Small Finance Bank, a retail bank. AU Small Finance Bank digitised its previously manual lending process with Experian’s PowerCurve Customer Acquisition. The end-to-end solution involved digitising and automating the application and approval process for a new credit card offering, enabling automated decisioning, and provided the ability to host and configure scorecards.  

“Being able to tap into Experian’s data, decisioning software and analytics has helped us accelerate our own transformation while we continue to redefine the banking experience for consumers in the markets we serve,” says Mayank Markanday, President and Chief Risk Officer at AU Bank. “Out-of-the-box decision management technology saves us time and resources, so we can focus on delivering innovative solutions to meet our customers’ needs, always guided by the principles of simplicity, inclusion and progress for all.”