“Role of cooperative banks is really crucial in rural areas while we speak about the financial security of the people in those areas,” said P C Panigrahi, General Manager – FI, Union Bank of India. Panigrahi was opening the panel discussion on ‘New Age Bancassurance: Challenges and Outlooks’ at the BW Businessworld’s ‘Cooperative Conclave Maharashtra 2017’ in Mumbai.
Elaborating further, D Nageswara Rao, General Manager, NABARD said, Cooperative banks and other banks should take care of the risks of their customers. “NABARD is helping cooperative banks in eKYC, so that the government schemes and benefits can be given to the deserving people in rural areas,” Rao said. There is also a need for micro ATMs in rural areas, NABARD is helping the cooperate banks in this area also, he added.
Explaining the technology advancements in Bancassurance segment said, Suresh A. Shan, Head – IT & Innovation, Mahindra & Mahindra Financial Services, “Technological advancements in identifying/verifying customers have come a long way.” Technology is available at a cheaper rate in KYC point of view, he added.
Shekhar Desai, Chief Executive Officer, Thane Bharat Sahakari Bank Ltd. observed that to earn a crore of insurance income, you don’t need to invest any capital. He also pointed out that no insurance company is giving more than 4 to 5 per cent interest to their customers. “Since all the insurance companies and nationalised and private banks are earning through insurance business, cooperative banks are also forced to be in this space,” Desai added.
On what more needs to be done in the segment, Shan explained, “We should be able to participate in the life cycle of the customers in rural areas through festivals, events etc. and must engage with them by using technology.”
Bancassurance can be successful if the incentives are shared with the staff and other stakeholders, the panel felt.
Low cost, low premium products have penetrated the Bancassurance segment. Panigrahi concluded by saying that high volume, low margin products is the way to success.