Let's talk about YOUtility

Financial literacy problems are pervasive despite an exponential increase in the number of financial service providers. In fact, regulators have mandated financial service providers to allocate funds towards financial literacy. The lack of financially aware consumers has resulted in numerous scams and blame game among government agencies, political parties and regulators. Many blame the individual, who lost his money, for his inability to grasp basic math and lack of motivation to act in their best interest.

Unlike scouring for a new smartphone where a consumer trawls the net for the best phone and then the best deal, looking up for the best insurance or mutual fund option does not come naturally. That’s because of the low involvement nature of financial products.

The investor is deemed relatively uninvolved and not particularly interested in engaging in an active search for information. Rather, their decision and choice processes are triggered by life-stage and/or environmental cues such as starting a new job. Moreover, the entry barriers are same for everyone, irrespective of them earning `2 lakh per annum or `2 lakh a month. For any financial transaction, be it saving or investing, one needs a bank account, a PAN (permanent account number) and be KYC compliant.

Until Election 2014, the average Indian voter was somewhat less involved and it was common to find people making holiday plans around polling dates. The mood of the nation changed during the 15th Lok Sabha elections. Suddenly, there was an increased traffic on social media with tweets, likes and followers and other such phrases taking over one’s imagination and attention.

Political parties identified the social media route to reach out to the 150 million first-time voters who were part of the connected generation. Facebook, for instance, states that Narendra Modi’s fan base grew by 14.86 per cent between 7 April and 12 May, the duration of the elections. Also, according to Facebook, between the day the elections were announced and 16 May, the counting day, 29 million people made 227 million poll-related interactions.

Digital communication platforms have shifted the centre of control and influence away from institutions to individuals. There is no doubt that online learning is a new form of financial literacy. But messaging is the key when it comes to social media.

There is no argument about social media’s outreach, but equally true is the importance of conveying a message across using the medium.

Social media involves empowering people, facilitating two-way conversations and nurturing collaborative relationships, something that this magazine will get on with this year. Here’s to a Happy You Year!

nk@outlookindia.com