Building a resilient future: The need for a financial health framework
Almost 65% of India’s population lives in its rural areas. India’s financial sector has seen unprecedented expansion, driven by policy initiatives, digital infrastructure and regulatory reforms. Initiatives like Pradhan Mantri Jan-Dhan Yojana (PMJDY), Aadhaar-linked banking, Unified Payments Interface (UPI) and digital lending have significantly improved access to financial services, particularly for underserved segments.
However, mere access does not ensure financial health and stability. Many consumers, despite being part of the formal system, face income volatility, low savings and inadequate risk management, limiting the true impact of financial inclusion. To address this, a financial health framework is essentialin order to move beyond access metrics to assess how individuals leverage financial services for long-term financial wellbeing. Financial institutions must shift from transactional engagement to personalised, data-driven solutions, using behavioural insights, AI-driven analytics and predictive modelling. This will enhance customer retention, improve portfolio resilience and drive sustainable growth.
A holistic approach – integrating technology, product innovation, and cross-sector collaboration – is key to ensuring financial inclusion efforts translate into tangible financial health improvements. Institutions that embrace this shift will be better positioned to capture market opportunities, mitigate risks and contribute to economic stability
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