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Financial Literacy in InsurTech: Building a strong financial foundation

Zopper Team Basics of Insurance November 11th, 2023
Financial literacy means financial freedom.

In a world full of uncertainties, financial literacy has become one of the most essential kinds of learning. Equipping a person with the ability to understand and effectively manage personal finances can empower them with the acumen to make the right financial decisions. And that too, very early on in life!  Applying the old-world wisdom of ‘teach them young’ can transform the youth’s approach toward financial planning for a better future. Financial literacy goes together with InsurTech, enhancing the overall customer experience. 

When individuals comprehend the intricacies of insurance and risk, they can optimise their coverage, reduce costs, and make well-informed choices. By integrating financial education into InsurTech solutions, companies can bridge the knowledge gap and foster a more financially secure future for all. With user-friendly interfaces and educational content, InsurTech companies can empower consumers to make confident decisions about coverage that suits their needs. 

Financial literacy in the era of ‘Digital Age’ 

The young population today face the unique task of balancing the real-world consequences of spending money via digital services and their dependence on digital is only set to grow. By 2030, India, along with Sub-Saharan Africa will account for around half of new mobile subscribers globally. As millennials, GenZ’s are already accustomed to apps, there is merit in introducing them to cutting-edge digital budgeting apps, which will allow them to track and control their spending habits. To help bridge the gap between digital transactions and responsible money management, integrate interactive digital tools, apps, and online resources into financial education programs.

Gamification of financial concepts can make financial management particularly enjoyable for young users. For instance, apps that incorporate engaging features, such as gamified savings and avatar creation for sharing on social media will be fruitful. The whole gamut of the ‘Digital India' initiative has laid the groundwork for InsurTech to flourish. With increasing internet penetration, widespread smartphone usage, and the rapid expansion of digital infrastructure, more and more people are gaining access to vital information and services.

A strong financial foundation for tech-savvy customers  

Currently, the government is looking at setting up a National Digital Library to promote financial literacy among Indians. Various MNCs, insurance firms and financial institutions are using social media to explain and simplify concepts, financial experts are sharing advice on social media and YouTube videos. The era of fin-influencers is trying to communicate and educate the masses with the power of social media. Every Indian today is being empowered with financial literacy in some or the other medium. India today is strengthening its commitment to financial inclusion and is bridging all gaps from the northern region to the southern part of India. Consumer fintech is indeed in a great transitory phase and the opportunity for tech-enabled personal finance has never been stronger, especially in the InsurTech space. 

Hereon, the new concepts of insurance such as embedded and contextual solutions will gain significant momentum and strengthen financial literacy by making consumers more aware of how to shield themselves from potential financial losses before they happen. Indian insurers, InsurTech companies and the government are now working towards creating a regulatory environment which will encourage usage of such products across all segments of the society. In return, it will also help insurers to leverage the power of data analytics and digital platforms to offer personalised solutions which will drive more innovation in coming times!

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