The Indian BFSI Sector is where all the growth is

 

AI-generated image

The Indian BFSI (Banking, Financial Services and Insurance) sector has seen humongous growth over the last two decades, having grown in GDP from Rs. 1.8 trillion in 2005 to Rs. 91 trillion in 2025- a whopping 50X rise in value.[1]Apart from the burgeoning size of the economy and the accompanying rise in consumption of financial services, the greater inclusion of people living in tier II and tier II cities has also given a fillip to the sector, with aspirational spending leading to a lot of the credit growth. The government, on its part, has gone out of its way to ensure that more and more people join the formal banking system via Aadhar and the e-kyc aided simple account opening process. It has also helped put in place a highly efficient Direct Benefit Transfer (DBT) system to reach funds directly to the beneficiaries in their bank accounts, helping ingrain banking habits in a larger and larger number of people.

The highly successful and transformational digital payments revolution in the shape of UPI or Unified Payment Interface has put India right at the top of the world with regard to real-time payment transactions. Fintech startups have played their part in the growth of the sector on account of their tie-ups with banks, helping the latter make their services vastly more accessible as well as customer-friendly. The BFSI sector has, in fact, been a frontrunner with regard to the use of data analytics and AI to help take its services to the next level. The widespread use of mobile banking is a sterling example of how technology can help improve the reach and efficiency of Indian banks.

Exponential Growth of Credit

The Indian middle classes have taken to credit like never before, allowing banks to achieve double digit growth in terms of credit uptake. This is particularly true for retail loans helping people finance the purchase of houses, vehicles, and even personal expenses. The scope of growth for credit to the private sector is quite good, given that India’s domestic credit to the private sector stood at 55% of the GDP in 2020, which is quite less than the global average of 148% according to World Bank figures. Compared to Chain’s 128% of GDP, South Korea’s 165% and even Vietnam’s 148% India can do much better on this front in the days ahead.[2]

Low Insurance Penetration

As a low insurance penetration nation, the scope of growth for insurance products is immense in India. With a mere 4% penetration in 2023, the sky is the limit when it comes to industry growth. The good news is that the Indian insurance industry already boasts a Gross Written Premium (GWP) in excess of $130 billion and an 11% CAGR (from the fiscal year 2020 to the fiscal year 2023.)[3] IRDAI, the body that oversees the Indian insurance industry, has initiated a number of reforms that have made insurance products much more accessible and easier to understand than they were in the past. The emergence and growth of private players has led to a number of benefits, including a rise in investment and the deployment of technology accompanied by a discernible rise in efficiency. Besides, the more liberal foreign investment policies have made global insurance majors look at the Indian insurance sector with renewed interest.

The Indian FinTech Revolution

The Indian FinTech revolution has made the world sit up and take notice. The smooth roll out of the universal digital payments system UPI has impressed nations from across the first and the third worlds. The Indian FinTech revolution has been fueled by the large scale adoption of innovative digital technologies that help meet the demand for efficient and cheap financial services and products. It is not surprising that the Indian FinTech sector has received $20 billion plus investment in the last five years.[4]

The potential for growth for the Indian FinTech over the next two decades is quite robust, given that less than 50% of the nation’s population has access to digital payments, and the number of people with access to credit is a measly 10%.[5]

BFSI- An Employment Generator Par Excellence

The BFSI sector provides employment to 6.1 million professionals, of which banking provides jobs to 2.4 million workers, NBCF to 2.2 million, insurance half a million, and other financial services 1 millon workers. [6]Going forward, one can expect the Indian BFSI sector to continue to do extremely well in terms of providing employment to the young. It is expected that it will provide employment to some 250,000 people by 2030, with most of the hiring happening in Tier II and Tier III cities. Much of the employment will be generated by wealth and insurance businesses who are looking to hire financial planners, digital underwriters, investment advisors, and claim automation professionals.[7]

Conclusion

The Indian BFSI sector is the sector to watch out for in terms of it sheer potential for growth and ability to generate employment. Driven by widespread digital adoption, a stupendous growth in financial inclusivity, the growth of diverse business and employment opportunities, as well as the fact that the Indian economy is on the ascendant, the Indian BFSI is in a fortuitous and happy space that is likely to remain that way in the foreseeable future.

[1] https://www.livemint.com/companies/news/indias-bfsi-sector-grows-over-50-times-in-two-decades-share-of-banks-reduced-due-to-nbfcs-report-11745462233150.html

[2] https://www.ey.com/en_in/insights/india-at-100/how-india-can-fill-the-credit-gap-to-fuel-economic-growth

[3] https://www.mckinsey.com/in/our-insights/steering-indian-insurance-from-growth-to-value-in-the-upcoming-techade

[4] https://www.pwc.in/assets/pdfs/investing-in-indias-fintech-disruption.pdf

[5] https://economictimes.indiatimes.com/small-biz/sme-sector/fintech-revolution-2-0-is-expected-to-unfold-in-india-in-the-next-10-years-mobikwiks-upasana-taku/articleshow/120891118.cms?from=mdr

[6] https://www.praxisga.com/insights/education-and-employability/unlocking-growth-skilling-opportunities-in-india-s-bfsi-sector

[7] https://economictimes.indiatimes.com/industry/banking/finance/banking/bfsi-sector-to-add-2-5-lakh-jobs-by-2030-hiring-shifts-to-tier-ii-iii-cities-report/articleshow/123426130.cms?from=mdr

Generative AI Moving From LLM to SLM?

 

Photo by Google DeepMind: https://www.pexels.com/photo/an-artist-s-illustration-of-artificial-intelligence-ai-this-illustration-depicts-language-models-which-generate-text-it-was-created-by-wes-cockx-as-part-of-the-visualising-ai-project-l-18069696/

While LLMs, or large language models, have played a pivotal role in the significant growth witnessed by GenAI, they do come with a number of built-in issues that act as a damper on the universal adoption of the technology. For one, the fact that LLM necessitates the training of models that need to take billions and billions of parameters into account, which is something that requires an enormous amount of investment. This ensures that only the largest technology companies with untold resources can seriously look at adopting this technology. Besides, the sheer consumption of energy to run the servers can prove to be an environmental nightmare.

This is where the move to SLMs or small language models makes eminent sense. As these need to conform to a much smaller number of parameters than in the case of LLMs, they are able to run admirably on devices with lesser processing power, including browsers, edge & IoT devices, and smartphones. What’s more, the quantum of resources needed to be deployed for this is way lower.

SLM technology is more decentralized in that it can be customized to handle precise tasks as well as datasets. This exposure to much more diverse datasets often makes them much more efficient than large language models trained on a limited amount of data. As smaller language models do not have large hardware requirements, these are usually much cheaper to deploy, encouraging more and more organisations and individuals to leverage their power. Another great advantage of using SLMs is the fact that one no longer needs to share one’s sensitive information with external servers, helping you to have enhanced digital security. As you can never really fully comprehend the decision making process with regard to LLMs, there is an ever present trust deficit that does not bode well for the implementation of that model in a manner that aligns with your objectives.

The widespread adoption of SLM that we see on a daily basis includes things like smart mail suggestions, grammar and spelling checks, voice assistants, real time text translations, search engine auto fills, and so on. This is a testament to the increased use of SLMs in preference to the conventional LLMs by more and more businesses and enterprises, especially by those who put a premium on cost, better control over technology, and the security of sensitive information.

 

Summary

Though both LLMs and SLMs have played a critical role in mainstreaming GenAI, the growing popularity of the latter is something that has been quite discernible for some time now. To summarise, SLMs are growing in popularity on account of the fact that LLMs require the deployment of large amounts of resources, which require a substantial investment. Apart from that, SLMs lend themselves to customization more easily, making them a more efficient alternative to LLMs. To top it all, SLMs offer better security. SLMs are increasingly taking over from LLMs across small businesses and enterprises and this trend is here to stay.

 

 

 

 

Using AI for Digital Marketing

 AI is being used for practically every field of human endeavour, and it cannot be that it will not be leveraged for something like digital marketing, which, as it is, depends upon technology to achieve results. A majority of marketing professionals around the globe are quite comfortable using AI tools in their day to day work. The level of adoption may not be uniform, but there is no denying the fact that AI adoption in the field of marketing is growing by the day.

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Not surprisingly, the most pervasive use of AI is in written content in the shape of blogs, social media posts, and emails. It is also used extensively for carrying out market research and automating tasks. Amongst the biggest benefits of using AI for digital marketing is the fact that it can allow one to personalise one’s marketing efforts to speak to one’s prospects’ and customers' specific needs and requirements.  AI applications also help digital marketers with SEO and advertising, and campaign optimisation. It also helps analyse customer-related data obtained from diverse platforms and make accurate demand forecasts.

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  Image generated by Google's Gemini AI

                                  

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AI tools used for Digital Marketing

Most people are aware of generative AI tools like ChatGPT, Google Gemini, and Claude AI; there are a large number of other very useful AI tools that digital marketers can put to good use for a whole range of functions. Let’s get a lowdown on some of them-

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1. Midjourney

Midjourney is a generative AI tool that generates images based on prompts provided in natural language. While its speed and accuracy are quite noteworthy, its ability to allow savvy digital marketers to give full rein to their creative imagination is what is remarkable about this tool.

​2. Drift

Drift is a very useful AI chatbot that helps with lead generation. Besides, it is great for customer interface. Not only does it offer a proactive chat feature, but it also enables lead qualification via conversational AI, besides offering integration with CRMs.

​3. Evolv.ai

Evolv.ai is a handy AI tool that helps businesses provide improved customer experiences in real time with the help of AI and machine learning. It is a knowledge management tool that helps them make sense of AI-generated recommendations by integrating various types of business intelligence.

​4. Mailchimp

Mailchimp is a popular AI-powered email marketing tool. It is very useful as it not only helps one personalise content, but to also helps figure out the best time to send out marketing emails. This is one tool that can help a business increase both the number of new as well as  repeat customers.

​5. Surfer SEO

Surfer SEO is a very useful tool used for on-page optimisation. It is cloud based and can help a business analyse its pages vis-a-vis the currency ranked ones on any of the  search engines. The advent of AI has changed SEO. With Surfer SEO, one can access one workflow to ensure that one’s content is visible across Google, Chat GPT, and the plethora of similar AR platforms.

​6. Tableau

This is a data visualisation and business intelligence tool par excellence that uses AI to help marketers analyse data to obtain cutting edge insights with regard to growing a business or brand. Its ability to leverage data to solve problems is unparalleled, which gives it the ability to transform a business.

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Why use AI in Digital Marketing

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The case for using AI in digital Marketing is very persuasive indeed. For one, it leads to an improvement in overall efficiency for the simple reason that it frees business owners, executives, and marketers from having to perform repetitive tasks and focus on the core ones that help a business grow in an optimal manner.

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AI imparts the ability of making data-driven decisions, allowing businesses to benefit from the most well considered and informed strategies, tactics, and actions.Leveraging AI allows businesses, regardless of size and budget, to compete with the best in business by enabling a level playing field.

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AI helps enhance customer satisfaction by personalising the way that the clients’ requirements are met in a timely manner. This is something that tools like chatbots can help achieve. Apart from speeding up decision making, perhaps the best advantage of using AI in digital marketing is the fact that it helps a business scale up their marketing without having to break the bank on account of a huge marketing budget.

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