Financial Inclusion

Digital Escrow Services
Escrow

Digital Escrow: Revolutionizing Trust and Security in Fintech Transactions

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Digital Escrow services play a pivotal role in modern financial transactions, offering a secure and trustworthy method for managing payments between parties.  In the fintech sector, digital escrow solutions have become essential, ensuring the safety and efficiency of online transactions. Understanding Escrow An escrow arrangement involves a neutral third party holding funds or assets on behalf of transacting parties until predetermined conditions are met.  This mechanism safeguards both buyers and sellers, ensuring that funds are only released when all contractual obligations are fulfilled. The Evolution of Digital Escrow in Fintech With the rapid advancement of technology, traditional escrow services have evolved into digital platforms, seamlessly integrating into the fintech ecosystem. These digital escrow services offer enhanced security, transparency, and efficiency, making them indispensable in today’s digital economy. Benefits of Digital Escrow Services Applications in Fintech Digital escrow services are particularly beneficial in sectors such as e-commerce, real estate, and online marketplaces, where large sums of money are exchanged, and trust between parties is paramount. For instance, in online auctions involving high-value goods, escrow services ensure that buyers receive the goods as described before funds are released to the seller. Technological Advancements in Digital Escrow Digital escrow services are becoming smarter with the help of advanced technologies: These technologies remove the need for middlemen, speed up the process, and reduce human errors, making digital escrow services faster, safer, and more reliable for everyone. Conclusion Digital escrow services are revolutionizing the way financial transactions are conducted in the fintech industry. By providing a secure, transparent, and efficient means of managing payments, they build trust between parties and facilitate smoother transactions. As technology continues to advance, the role of digital escrow in fintech is set to become even more significant, offering innovative solutions to meet the evolving needs of the digital economy.

Financial Digitalization
Financial Inclusion

Future of Finance – Embracing Digital Transformation

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Today, with just a few taps, funds can be transferred, bills can be paid, and purchases can be made. All without needing to touch cash. As technology advances, with financial digitalization the future of finance looks brighter, promising even more innovative and secure ways to the government and corporate entities, and financial intermediaries. To add to this, digital transformation has been a crucial factor in reducing operational costs, improving efficiency, and rendering enhanced services to customers. Hence, the significance of digital transformation in modern-day finances cannot be overstated. In this rapidly evolving landscape, companies like Teknospire are at the forefront, offering innovative Fintech solutions tailored for emerging markets. As we explore the digital transformation trends in the Middle East and African (MEA) region, we’ll see how such platforms are shaping the future of finance. While the financial systems all around the world are the beneficiaries of this change, a wave of rapid adoption can be seen in the economies of the Middle East and African (MEA) region. As per a recent report, there has been a 70% boost in digital banking in the region. The implementation of novel digital transformation strategies has led to the rise in the adoption of fintech solutions and related mobile banking services. Steered by the increasing penetration of smartphones, the growing trend of digital adoption in the MEA region looks promising. This blog aims to unravel this very trend, exploring the key drives, the challengers, the impact, and a handful of inspiring case studies. The Global Surge of Digital Transformation in the Finance Sector We all are well aware of the massive digital transformation that the finance sector is undergoing on a global level. As we speak, somewhere, a financial institution is transforming its service to serve its customers better and to stay ahead in the game.  Today, a large proportion of banks around the world are heavily invested in Machine Learning (ML) and Artificial Intelligence (AI) fostering quick transactions, proactive fraud detection, and satisfactory customer virtual assistance. When it comes to the MEA region, the digital transformation has been earmarked with several key statistics and ebullient case studies. For instance, the United Arab Emirates (UAE) has witnessed a whopping 200% rise in the use of e-banking services over five years. Based in South Africa, the First National Bank or FNB is successfully offering AI assistance to its customers for the very first time. Other initiatives include the launch of Vision 2030 by the government of Saudi Arabia to increase the digital transaction rate up to 70%,  the Dubai Blockchain Strategy of UAE and to name a few. While these account for a handful of instances, the governments in the MEA region are playing a major role in transforming the finance sector to bring in more transparency and better efficiency. But the road taken hasn’t been an easy one to tread on, it is full of challenging bumps. Challenges Before Financial Digital Transformation A couple of challenges stand in the way of the financial sector and the concerned stakeholders to digital upgradation. In this section, we will be discussing the major ones: Financial Digitalization Drivers in the MEA Region In overcoming the aforementioned challenges and fostering the digitalization of the financial sector has been catalyzed by several key factors. One of the most significant of these are Smart Dubai initiative by UAE and other government policies of the MEA region such as incentivization of the adoption of digital technologies have managed to create a conducive environment paving the way to digital transformation.  Another crucial driver of digital transformation in the finance sector has been the technological advancements that have been taking place. As far as the MEA region is concerned, there has been significant progress in the adoption of distributor ledger technology or blockchain technology, AI integration, and the development of cloud computing infrastructure. This has been in sync with the rising consumer demand. Today, the consumers of the MEA region are demanding more convenient, quicker, and efficient financial services. This is pushing the government, corporate entities, and financial intermediaries to accelerate their efforts of digital transformation. Case Studies: Financial Digitalization Success Stories Let’s delve into the latest case studies related to the financial digitalization: Case Study #1: Super-fast and Secure SARIE system of Saudi Arabia.The SARIE system is a subsidiary of the Saudi Central Bank and has driven the digital payment ecosystem of the country by leaps and bounds. It has enabled the transaction of instant fund transfers between banks. This has boosted digital payment transfers by manifolds. It also supports the Vision 2030 launched by the country. Case Study #2: The Success of the First National Bank (FNB) of South Africa. The First National Bank (FNB) has been a great success in the South African soil. This bank had heavily invested in AI and data analytics to serve the customers better. With instant loan approval, it has become one of the most successful financial ventures in the MEA region. Case Study #3: The Digital Transformation of Emirates NBD. Based in the sands of Dubai, Emirates NBD has been successfully digitalized by launching Liv. A digital-only bank that targets unserved sections of the country’s economy. It offers a range of features such as personalized financial insights, instant account opening, and to name a few. This initiative has managed to increase customer engagement and satisfaction by 62%. Case Study #4: The Mobile Money Service of Kenya’s M-Pesa.Safaricom had rolled out the mobile money service on the Kenyan landscape in the form of ‘M-Pesa’. It allows users to digitally transfer funds, pay for goods and services, and deposit money in their banks digitally. By providing financial access to millions, it has increased the financial inclusion percentage of the country from a meager 26% to a whopping 84%.  Case Study #5: The Novel Mobile Banking Initiative by Saudi’s National Commercial Bank (NCB).The sands of Saudi Arabia have witnessed a tremendous transformation in the services rendered by its largest bank – the National Commercial Bank (NCB). With

Digital Banking, Financial Inclusion, FinTech Trends, Mobile Wallet

Financial Inclusion and Union Budget 2020

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Financial inclusion is increasingly being recognized as a key driver of economic growth and poverty alleviation across the globe. Studies have found that access to formal finance can boost job creation, reduce vulnerability to economic shocks and increase investments in human capital. Seven of the United Nations Sustainable Development Goals (SDG) of 2030 view financial inclusion as a key enabler for achieving sustainable development worldwide. Union Budget 2020 and Enabling Financial Inclusion  While presenting Union Budget 2020, Hon’ble Finance minister Mrs. Nirmala Sitharaman said Technological tools like Artificial Intelligence, Internet of Things, 3D printing, drones, data storage, Quantum Computing are helping change the way the country functions, these emerging technologies need to be focussed to drive financial inclusion in the country.” How Artificial Intelligence Can boost Digital Financial Inclusion? Most of the rural population looks for a “credit” facility with a financial institution but in the absence of “credit score or history” the loans are not granted or provided at a very high-interest rate. AI can be used to build a rural credit score for individuals based on their crop turnover, business profit or sales. Data collected from SMS logs, contact details could assist in identifying the user who can be trusted in repaying the loan. Based on this a score could be assigned to him and FI can impart credit for individual’s needs. How the Internet of Things Can boost Digital Financial Inclusion? Internet of Things [IoT] of wearable technologies bridges the gap and open access to formal finance to rural/immigrants of a country.  A live example has been seen in Africa where people struggle to get a continuous supply of electricity. Hence Solar powered chargers and lanterns evolved, but they cost a lot and with people having limited income, putting a lump sum amount at the start is difficult. Hence they came up with Pay-as-you-go model that connects the solar-powered device to their SIM card for remote management and integration to payment network offering customers to pay installments easily and ability to service providers to manage device remotely in case of issues. How Drones Can boost Digital Financial Inclusion? Last-mile delivery in rural and remote areas is still a struggle and startups, brands are looking for a feasible solution. Drones could offer assistance here.   While delivering cash to the last mile may have its risk, but delivering couriers [containing clothes, books, grains, etc] with a digital-based interface that enables payment could assist in social inclusion.  Drones could also aid to insurtech in investigating, inspecting the home/vehicle/shop under an insurance claim and send the report for faster processing. This would help in getting rural people under insurance assuring a good quality of life. How Quantum Computing Can boost Digital Financial Inclusion? Quantum Computing may not directly impact the unbanked individuals, but it can help  Investors in evaluating the business cases for Banks and FI with the innovative products  In Localizing banking to regional flavor with the use of data  Supply Chain in scanning and quickly coming up with the best route to meet the logistics timelines. Our Hon’ble Finance Minister not just made sure to include these emerging technologies growth plans in the budget but she confirmed that all the public institutions at a Gram Panchayat levels will be given digital connectivity, and Fibre-to-home through BharatNet will link 100,000 Gram Panchayats in the financial year 2020-21 itself. Sitharaman said, “Anganwadi centers, health and wellness centers, post offices, police stations, and other rural welfare centers to get 100 percent digital access. The government’s vision is that all public institutions be provided with digital connectivity.” For last four years Teknospire, a technology provider to Banks and NBFC’s is doing its bit in enabling Financial and Social Inclusion. If you are looking for a Digital Banking, API Banking or Mobile Wallet solution, we are just a call away. References RBI, Finextra, Nextbillion, finovate, bobsguide

Digital Banking, Finance, Financial Inclusion, FinTech, Internet Banking, Mobile Banking, Online Banking, Open Banking, Rural Banking

DIFFERENT WAYS TO BANKING – DIGITAL, ONLINE, INTERNET, MOBILE BANKING, NEO, E-BANKING

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Editor’s Note : This post was originally published in [January, 2019] and has been updated for freshness, accuracy and comprehensiveness. What is Online Banking Accessing Banking services via internet Also Called Internet Banking or Web Banking Conducting financial and non-financial transactions via web interface or a smartphone Ability to access all financial information of your bank on your computer or mobile What is Digital Banking Banking services delivered over internet Digitization of traditional banking activities and programs In technical terms, full digital transformation of front-end, back-end , data collection and everything What is Internet Banking Facility to a customer to transact/access financial data via a net banking account Internet banking is same as Online banking Manage your money online via internet. What is Mobile Banking Accessing banking services via Mobile phone Using of online banking from smartphone or cellphone What is Neo Banking Digital Only Digital Offers on the go Banking beyond walls “Financial Institutions must be able to deliver and easy to navigate, a seamless digital platform that goes beyond a miniaturized online banking platform.” -Jim Marous, Publisher –  Digital Banking Report How many of you have actually visited a bank in recent times? Do you remember the last time you visited a bank to transact money? Not sure, right? The reason for this can be understood better if you acknowledge the fact that you live in an era of digital banking. Your buying behavior and modes of payment have changed drastically over the last decade. Cheque and cash are old schools now, and it is more about online banking, mobile banking, and Internet banking. This cashless economy has not only made things easier for you but has also made it all instant and quick. You no longer have to carry wads of cash or wait for banking hours to receive and transact money.  While you do have quite an options when it comes to virtual banking, here, we would focus majorly on digital banking, mobile banking, open banking, and online banking. So here is the primer on different ways to bank. What is ONLINE BANKING | Define Online Banking You are using online banking service every time you log in to your online bank account. In other words, transactions conducted electronically using the internet as a gateway are called online banking.  “Online banking refers to banking services where depositors can manage more aspects of their accounts over the Internet, rather than visiting a branch or using the telephone. Online banking typically is comprised of a secure connection to banking information through the depositor’s home computer or another device.” – Techopedia. So Online Banking is – Accessing Banking services via internet Also Called Internet Banking or Web Banking Conducting financial and non-financial transactions via web interface or a smartphone Ability to access all financial information of your bank on your computer or mobile What are the Pros of Online Banking | Advantages of Online Banking HASSLE FREE BANKINGAlmost every financial institution nowadays gives this facility to its customer to reduce the hassle of visiting their physical branch. EASY AND CONVENIENT FEATURESSome banks even allow you to deposit cheque by simply taking a picture of it. BANKING ANYWHERENo more tedious process of banking with the long queue with restricted working hours and unpredictable weather conditions with equally unpredictable mood swings in hot, sweaty and humid conditions. BANKING ANYTIMEWith the advent of online banking, a person can virtually monitor and transact money 24/7 without having to wait for the banking hours. REAL-TIME ALERTS/NOTIFICATIONSAlso, the alert messages and emails allow you tomonitor your account anytime and detect any fraudulence well in advance. What are the Cons of Online Banking| Disadvantages of Online Banking COMPUTER/MOBILE CANNOT DISPENSE/DEPOSIT MONEYThe biggest drawback of this mode of banking is that it can’t be used to deposit and withdraw money. NO OFFLINE MODEAlso, your online banking experience is dependent on your internet connectivity. What is DIGITAL BANKING? | Define Digital Banking While there is a tendency among people to confuse this term with online banking, digital banking is definitely not the same as the former. While online banking literally limits you to the services provided by your banks like NEFT transfers, automatic payment reminders, and the likes, digital banking goes beyond this. Online banking focuses on digitizing the “core” aspects of banking, but digital banking encompasses digitizing every program and activity undertaken by financial institutions and their customers. Digital Banking is – Banking services delivered over internet Digitization of traditional banking activities and programs In technical terms, full digital transformation of front-end, back-end , data collection and everything What are the Pros of Digital Banking? | Advantages of Digital Banking ACCESS HIGH-END FEATURES VIA INTEGRATION WITH THIRD PARTY API’SWhen you talk about digital transactions, you think of mobility, feature-laden transactions, predictive and profile-oriented banking with functions like booking tickets online and purchasing a product/service online. SHOP FROM OFFICE, HOME, BUS OR ANYWHEREIt is also about using e-commerce businesses for doing your day-to-day transactions and your regular online banking without any hassle on-the-go. AVAIL INSTANT DISCOUNTS AND CASHBACKSDigital banking also means attractive cash-backs, discounts, and vouchers while transacting digitally. What are the Cons of Digital Banking? | Disadvantages of Digital Banking While the advantages outweigh the disadvantages, there are a few drawbacks involved in digital banking as well. RELUCTANCE TO CHANGEYou may not be very comfortable making large payments digitally. EXCESS SPENDING’SAlso, you may tend to get lured into unnecessary online shopping just to use the cash back and vouchers that you get whiletransacting digitally.  But who considers shopping a drawback ever, right? What is INTERNET BANKING? Define Internet Banking | What is e-banking? You may say that online banking and internet banking are the same.  Yes, agreed!  However, there is a new facet of online banking that goes over and beyond the understanding and scope of online banking.  Open Banking!  Ever wonder what that means to you?  Through this concept, people can share their transaction data with third parties to boost competition in the financial market. Sounds interesting, right? So, Internet Banking or e-banking is – Facility to a customer to transact/access financial data via a net banking account Internet banking is same as Online banking Manage

Digital Banking in US
Digital Banking, Financial Inclusion, FinTech, FinTech Europe, Industry Observation, Open Banking

Digital Banking – Initiatives, Use Cases, Examples, Opportunities in the US

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The year 2012 was a bit frustrating for Olympic tourist in London as VISA was the only card to be accepted. Banks in the US who have offered Mastercard to their customer were under pressure to issue new VISA cards to engage their loyal customer and earn revenue from international payments. For a developed nation like the USA that excels in technology adoption issuing new card may not be a significant task and that reflects in their growth and economy with flexible products, services, underbanked population dropping to 6.5%[ in 2017]. Indeed, U.S. is far ahead in innovation in the banking sector when compared to other countries. Our post of today would talk about these initiatives, opportunities, and examples of Digital Banking in the U.S. Examples of Fintech-Bank Collaboration to enable Digital Banking in the US   Legence Bank integrating their CBS Legence Bank in Eldorado, Illinois was looking for a tool that guides their customer on solid banking practices. They needed a tool that could integrate all customers’ accounts at one place and help them analyze their spending decisions. Collaborating with CSI, a fintech offering banking solutions that got integrated with their legacy banking system helped in educating young customers about making smart budgeting plans.   Live Oak Bank integrating with Plaid Another interesting collaboration happened when Live Oak Bank in the US collaborated with Plaid to serve the small businesses and personal customers with security and speed. Live Oak Bank was looking for speedy on boarding process so that the customer could use the online banking platform within hours if possible and should be secured validating and following all legal processes. Plaid offered their secured solutions that helped Live Oak Bank in expanding their services to different verticals, and they also started offering personal banking platform to other regions. Implementations / Examples of Digital Banking in the US Banks need to draft a “Digital Strategy” to move and align with the digital wave. Each Banking services be it in Corporate Banking or Cards and Payments now has a Digital Solution available. What Banks need to work on is analyzing all aspects of Digitization and evolving truly as Digital Institution. Let’s take a closer look at some of the banks in the US who followed banking trends and emerged victorious in serving tech-savvy millennials.   American Express AmEx or American Express is a brand that doesn’t need an introduction in the US. Popularly known as “premium brand” it has been one of the banks that understand “How customer and relationship need to be nurtured while offering comfort and convenience.” An article covered by The Financial Brand dictates some of the “good things” that make AmEx a top choice in customers, sample these –   Onboarding Simple and QuickAmEx bid goodbye to long paper forms, quick and easy onboarding process helps in saving customer’s valuable time. In fact the application for an American Express card is so simple that it takes ~30 seconds. Digitization Rocks! Compatible With All DevicesIs your Banking form only compatible with Desktop? How about opening it on Tab? AmEx made sure that all the screen sizes and device compatibility is applicable for the application form to avoid any inconvenience to the customer Integration of Third Party PluginsAmEx always shows its value to its customers by displaying the comparison chart and dictating the actual value customer would derive. Does your banking software allow the customer to integrate with other third-party plugins to compare and make informed decisions? Using Data effectivelyAmEx uses data points not only to mitigate risks but also to detect fraud. Are you using your data effectively? Above features may not be “newer innovations” but are making customer life more straightforward and that’s what distinguish you from your competitor. Wells Fargo Wells Fargo another leading bank in the US who led the Digital Banking initiative implemented Balance Scorecard [BSC] to track and measure the online financial services [OFS]. The case study that studies the implementation in the year 1997 and 1998 came up with the following conclusions – It’s worth to highlight the fact that even in those days when digitization was not end to end Wells Fargo was able to reduce its cost by 22%, imagine with modern technologies and innovation how much operational cost could be reduced for a bank leading to an increase in profit margins. History of Banking and adoption of Digital Channel in the US October 8 that is celebrated as National Online Bank Day triggers nostalgic feelings of banking to be a brick-and-mortar business. The simplefund’s transfer used to take 2-3 days and depositing a cheque on bank holiday was utterly forbidden. We have indeed come a long way of Banking …. Initiatives in the U.S to adapt to Digital Banking Stanford Federal Credit Union (or Stanford FCU) was one of the first to offer banking by telephone and conducting its first four internet transactions, introducing Online Banking to US residents. Wells Fargo was the first bank to provide secure credit card transactions on the internet. As they celebrated 20 years of internet banking on their website in 2015, they mentioned – people being reluctant to avail banking services online. An exciting story shared by early adopter is worth sharing – One of the major hurdles faced by Banks in the past while adopting digital channels is “assuring security” to the customers. With lack of regulation, Banks themselves managed compliance to assure best services to the customers. But with innovation in technology speeding up, there was a rise in adopting the Digital banking initiatives by the US residents. We now see tech-savvy millennials demanding IoT based banking services, easy acceptance to contactless payments and use of VR/AR in banking institutions. Opportunities for Digital Banking in the U.S Different modules of Banking have been digitized with Fintech and Bank collaboration, but as Banking is like the veins of any country’s economy, it has the potential to evolve further. Some of the innovative use cases being explored by enterprises in

Financial Inclusion, FinTech, Open Banking

Different Ways to Bank – Digital Banking, Online Banking, Internet banking, Mobile Banking

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“Financial Institutions must be able to deliver and easy to navigate, a seamless digital platform that goes beyond a miniaturized online banking platform.” -Jim Marous, Publisher –  Digital Banking Report How many of you have actually visited a bank in recent times? Do you remember the last time you visited a bank to transact money? Not sure, right? The reason for this can be understood better if you acknowledge the fact that you live in an era of digital banking. Your buying behavior and modes of payment have changed drastically over the last decade. Cheque and cash are old schools now, and it is more about online banking, mobile banking, and Internet banking. This cashless economy has not only made things easier for you but has also made it all instant and quick. You no longer have to carry wads of cash or wait for banking hours to receive and transact money.  While you do have quite an options when it comes to virtual banking, here, we would focus majorly on digital banking, mobile banking, open banking, and online banking. So here is the primer on different ways to bank. Online Banking You are using online banking service every time you log in to your online bank account. In other words, transactions conducted electronically using the internet as a gateway are called online banking.  “Online banking refers to banking services where depositors can manage more aspects of their accounts over the Internet, rather than visiting a branch or using the telephone. Online banking typically is comprised of a secure connection to banking information through the depositor’s home computer or another device.” – Techopedia Pros of Online Banking Almost every financial institution nowadays gives this facility to its customer to reduce the hassle of visiting their physical branch. Some banks even allow you to deposit cheque by simply taking a picture of it. No more tedious process of banking with the long queue with restricted working hours and unpredictable weather conditions with equally unpredictable mood swings in hot, sweaty and humid conditions. With the advent of online banking, a person can virtually monitor and transact money 24/7 without having to wait for the banking hours. Also, the alert messages and emails allow you tomonitor your account anytime and detect any fraudulence well in advance. Cons of Online Banking The biggest drawback of this mode of banking is that it can’t be used to deposit and withdraw money. Also, your online banking experience is dependent on your internet connectivity. Digital Banking While there is a tendency among people to confuse this term with online banking, digital banking is definitely not the same as the former. While online banking literally limits you to the services provided by your banks like NEFT transfers, automatic payment reminders, and the likes, digital banking goes beyond this. Online banking focuses on digitizing the “core” aspects of banking, but digital banking encompasses digitizing every program and activity undertaken by financial institutions and their customers. Pros of Digital Banking When you talk about digital transactions, you think of mobility, feature-laden transactions, predictive and profile-oriented banking with functions like booking tickets online and purchasing a product/service online. It is also about using e-commerce businesses for doing your day-to-day transactions and your regular online banking without any hassle on-the-go. Digital banking also means attractive cash-backs, discounts, and vouchers while transacting digitally. Cons of Digital Banking While the advantages outweigh the disadvantages, there are a few drawbacks involved in digital banking as well. You may not be very comfortable making large payments digitally. Also, you may tend to get lured into unnecessary online shopping just to use the cash back and vouchers that you get whiletransacting digitally.  But who considers shopping a drawback ever, right? Internet Banking You may say that online banking and internet banking are the same.  Yes, agreed!  However, there is a new facet of online banking that goes over and beyond the understanding and scope of online banking.  Open Banking!  Ever wonder what that means to you?  Through this concept, people can share their transaction data with third parties to boost competition in the financial market. Sounds interesting, right? Pros of Internet Banking It allows you to initiate and make payments directly from your account as a bank transfer. It also enable you to keep a check on your finances in a better way. Through open banking, you are not only transacting, but you are also streamlining your finances andmanaging it more effectively. With this, you can also get more customized services as per your spending behavior, leading to a more responsible and systematic lending process. Cons of Internet Banking This concept is relatively new, and that literally translates to many trial-and-error instances and a general mistrust related to its security and authenticity. People who are not adept at digital technology might not be able to reap its full benefits. Mobile Banking You all have used this at some time or the other. Every financial transaction you undertake using your Smartphone applications is termed as mobile banking. Apart from the commercial apps, your financial service provider would also have a mobile app with which you can transfer cash and make bill payments conveniently on your mobile. This is by far the most trending among all the banking types, and the onus is that you would only need your Smartphone and an internet connection for this kind of banking! Pros of Mobile Banking Mobile banking has a lot of scope in the virtual banking space and encompasses transactions through mobile wallets, digital payment modes, UPI transfers (like the BHIM app), etc. There are many mobile apps which offer you safe and secure transactions and much more, ‘anywhere – anytime’ with just a click. For example, SBI has SBI Yono, SBI Anywhere; ICICI Bank has iMobile. HDFC has HDFC Mobile and Pay Zapp. Kotak Mahindra’s Banking app is Kotak 811, while Axis Mobile provides Axis Mobile. We also have Payment Banks committed to the inclusion and service to the last

Financial Inclusion, FinTech, FinTech Trends, Open Banking

Digital Banking: The Talk of the Town

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Digital Banking is all about the transformation, where the consumer rather than the technology, is in the driver’s seat, and this MATTERS. It’s about digital money deposits, withdrawals and transfer of money from one account to another. It’s also about Account Management to loan management to paying all your bills digitally. Digital Banking essentially entails the leveraging of technology, where banking services are delivered over the internet, by involving high levels of process automation and web-based services. What Is Digital Banking? Digital banking, in simple words, is emulating 90% of the services provided by a conventional bank branch digitally, via a mobile app or through net banking in your computer browser. Welcome ‘Digital Banking’. Welcome to the virtual world of  banking services! Channels of Digital Banking Just as the word “virtual” is put up, you might wonder about the channels existent to avail such services. Let’s take a look at a few. Today, the main channels of digital banking are the Android and iOS apps of the respective banks and their browser-based websites. These apps are easily available in different app stores like Amazon Appstore, SlideME, Samsung Galaxy Apps, Mobile9 and so on. For example, SBI has SBI Yono, SBI Anywhere; ICICI Bank has iMobile. HDFC has HDFC Mobile and Pay Zapp. Kotak Mahindra’s Banking app is Kotak 811, while Axis Mobile provides Axis Mobile. We also have Payment Banks committed to the inclusion and service to the last mile like PayTM, Vodafone m Pesa, Airtel, Fino, Indian Post, Jio and so on. Babies on the block: Neo banks & Challenger banks In this race, we are also joined by Neo banks and Challenger banks (Read ‘Tomorrow’s Bank’)  like Revolut, N26, Monzo, Atom, Yolt, WeBank, Moven, Fidor, and MYBank to name a few. These banks are an important part of the emerging cohort of  FinTechs which puts customers at the center of everything. They are the banks which are reinventing the practices and processes associated with the traditional banking. A new type of digital bank (often working solely through a mobile app) which exists without branches. These are 100% digital banks. Neo banks don’t have the license and they rely on a partner bank to operate. On the other hand, Challenger banks have the full banking license and offer full suite of banking products. They compete independently and on equal terms with traditional banks or digitally manifested traditional banks.  They offer: Reduced costs Advanced features User friendly interfaces Customized reports Fast account openings ( between 3 to 10 minutes) International ‘Multi Currency’ Payments Instant ‘Multi Currency’ Payments 24/7 support Vaults and Expenses Analytics All these to ensure simple, secured and seamless transactions! Digital Banking Features Listing some of its many features: You can apply online for opening a savings or current account from your desktop or mobile. A manual call from a bank representative follows, who then completes verification from a remote branch.  OTP, video authentication and upload of scanned documents are proceeded with. This enables low cost zero balance account. 24/7 query solutions by chatbots are available in your app or net banking facility. Provides a highly secured, encrypted money transfer. Enables 24/7 money transfers at minimum or no extra fees, and displays their records whenever necessary. Electronic payment of bills to the pre-registered payees. Offering customized pre-approved all-purpose loans to the customer via a digital channel. Advantages of Banking Digitally Some of its many advantages will surely help you in forming a fair view of digital banking and its multi-faceted applications: Visiting a branch and spending precious work time is eliminated. Paying your bills online, keeping track of your transactions and tab on your spending has become easier. Customized approval for a loan via Artificial Intelligence using CIBIL in minutes for a customer. Avail discounts on your favorite activities right there from your banking app. Digital Banking provides with a virtual debit card, whenever you wish to generate one. Without a permanent CVV and duration of 24-48 hours, these are much safer. Real-time interbank payment is now the norm through IMPS while BHIM (Bharat Interface for Money) and UPI (United Payment Interface) enhance the interbank payment security. Multiple money applications can be synced together. Online budgeting was never so easy. Real-time figures, anytime, anywhere. Multiple sources of revenue for the bank. Cost of providing digital banking services is a fraction of branch bank services. Cons of Digital Banking Like any other novelty, digital banking also comes with its own set of disadvantages: Not possible without a stable internet connection. With scraping of Aadhaar for authentication, the model of digital verification that’s the cornerstone of digital banks is at risk. Chatbots and Robo advisors are not always the best option for the query. Unless they have the algorithm to learn from new questions, sometimes they loop back to the same answer for different queries. When products like FD, which are linked to the performance assessment of a bank employee, are done online, no particular back employee gets its credit. This leads to disinterest in that product in the bank employees of that branch where it’s registered. Few Dos and Don’ts in Digital Banking (Source: TribuneIndia.com) While banks and FinTechs take all precautions to ensure security, it’s always advisable to know the dos and don’ts of digital and online banking. Here are some of them: Always keep them password protected. Change your passwords and security settings regularly. Always visit your bank’s secure Internet Banking site directly. Always verify your domain name. Log out of your Internet Banking account the minute you complete transactions. Use dedicated/secured  WI-FI networks only. Always use, and update Antivirus software to keep your information safe. Safety tips while using a mobile app for banking transactions: Never save your mobile banking log-in and password on the phone. Never leave your handset unattended. Always lock your phone to prevent unauthorized use. Notify your bank as soon as your mobile is lost or stolen. Update the apps regularly. Keep an eye on your account balance and transaction history regularly. How FinTech

Financial Inclusion is the key
Agency Banking, Digital Financial Services Platform, Financial Inclusion, FinTech, FinTech Trends, Inclusive Banking, Open Banking, Rural Banking Solutions and Financial Inclusion

Financial Inclusion: What will it be like for years to come?

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Financial Inclusion helps lift people out of poverty and can help speed economic development. It can draw more women into the mainstream of economic activity, harnessing their contributions to society. – Sri Mulyani Indrawati, Indonesian economist, Minister of Finance of Indonesia since 2016 Economic growth of a country depends on factors like national income, per capita income & per capita consumption, technological advancement and even its political structure. An equilibrium between savings and consumptions is another factor which decides economic growth. Walter Bagehot, the famous classical economist, stated long ago that a strong financial system is crucial for economic growth and that the lending should be “quickly, freely and readily”. Translated to suit modern day scenario, to strengthen financial systems you need to encourage economic activities like Financial Inclusion, Digital Banking & Fintech. Let’s explore what and how Financial Inclusion can do and what it holds in the future for developing countries like India, Nepal, Bangladesh, and other African and Asian economies. Defining Financial Inclusion Financial inclusion can be broadly defined as the process of making financial services available to people, especially the weaker sections and low-income groups of the society. It includes the timely and adequate availability of a wide range of financial products and services like:   Bank accounts for saving & transactional purpose   Equity products   Insurance   Saving products   Loans For economic growth in developing countries, this aim is furthermore towards ensuring financial inclusion to the unbanked and the underprivileged community who are either unaware of or unable to affordable financial services and products. Penetration of financial services to all sections of society at a swift pace can be achieved through Digital Banking and FinTech. Goals to achieve Financial Inclusion are: To maximize the use of the latest technologies to transform the existing traditional financial or banking service models. To better the existing products or services of the financial sector. Financial Inclusion – Impacting Economies of Developing Countries Impact of Financial Inclusion, especially via Digital Banking or FinTech, can be exponential. A survey report by McKinsey Global Institute, which has been endorsed by the World Economic Forum also, states that there are more than 2 billion individuals and 200 million businesses (small, medium and micro) with no formal access to financial services like savings or credit. Those who have access are often required to pay heavy fees or charges. It goes on to state that if through Digital Banking, financial inclusion is ensured then the following impacts are expected:   GDPs of developing countries like, India, Ethiopia, Nigeria, and similar Asian economies will increase by 6%. The absolute value of such increase may reach a whopping $3.7trillion by 2025.   This incremental GDP thus created will generate an additional 95 million new jobs across industries.   Addition of 1.6 billion unbanked individuals will create a big pool of loan borrowers. Around $2.1 trillion of the loan amount to these individuals or small sized businesses is expected.   Governments can bring down tax collection leakages and gain up to $110 billion per year.   Governments stand to gain up to $400billion every year when they convert traditional accounts to digital accounts as they can now save 80-90% of cost on managing traditional accounts.   Increase in customer base will result in an incremental revenue generation of $4.2 trillion. All these predictions sound exciting, right? Read on to know some of the many concrete benefits of financial inclusion. Concrete Benefits of Financial Inclusion The few of the many,  main benefits of financial inclusion are:   Better Penetration of Services With financial inclusion in place, reaching the rural populace will be made possible providing them easy access to bank accounts, cash payments, cash receipts, and account statements. The authentication and fulfillment of services can be done by fingerprint and online receipts respectively.   Boosting Economic Growth The banking ecosystem will be strengthened as the cash economy will be reduced and the habit of saving will be inculcated in rural masses.   Direct Subsidy Transfer The government subsidies will be directly deposited to the bank accounts of beneficiaries. The funds will thus reach the intended recipients instead of middlemen forestalling leakages and corruption.   Encourages Entrepreneurship Financial inclusion will motivate formal banking and transparent credit availability which will release people from the clutches of unofficial money lenders. Adequate credit will prompt entrepreneur initiatives which will further enhance economic outputs and prosperity of the country. Financial Inclusion – Headway The progress of financial inclusion in the context of emerging economies like India has been substantial. The same has been highlighted in the Department of Financial Services GOI reports as:   35.5% of households availed banking services in 2001 which grew to 58.7% in 2011. This growth is significant in rural India –from 30.1% in 2001 to 54.4% in 2011.   The CRISIL- Inclusix which includes branch penetration, deposit penetration, and credit penetration was 35.4 in 2009 and has grown to 40.1 in 2011 to 58.0 in 2016.   IMF ‘Financial Access Survey 2018’ reported the following- Low-income countries like- Bangladesh, Myanmar, Guyana and many African countries have successfully used mobile payments for Financial Inclusion. These countries have more than twice the number of bank accounts per 1000 adults than the developed economies. What a sky-high improvement! Additionally, the IMF Financial Access Survey 2018 also reported an increase in the number of ATMs per 100,000 adults, branches of commercial banks per 100,000 adults, deposit and loan accounts with commercial banks per 1000 adults. Mobile money transactions number per 1000 adults was the most attention-gainer with a significant rise! Financial Inclusion does not mean only access to services but how those services are useful for the user. One of the parameters which are considered by various organizations while mapping FI is the safety and convenience of the financial service or product. A survey done by the World Bank Group, measuring the Financial Inclusion and Fintech revolution, reported that globally the percentage of adults using digital payments for receiving and making payments increased by 11% between 2014-2017. In developing countries, it is higher by 1% i.e. 12%.

Open Banking Enabling Financial Inclusion
Financial Inclusion, Open Banking, Open Banking API

How Open Banking can Help in Financial Inclusion

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Jonathan a villager who supplies vegetables to the branded supermarket in the city needs to submit monthly invoices [physical copy] to get the payment.He has a bank account but still has to maintain a physical copy of the number of vegetables supplied with the offer price. Recently he got to know about a software that could do the maths, generate an invoice and submit it to the concerned vendor. Vendor on receiving the invoice can release the payment directly to his bank account, that is accessible to Jonathan on the software/app via open banking. Welcome to the World of Open Banking that is enabling Financial Inclusion. How Open Banking can Enable Financial Inclusion Financial inclusion a concept that ensures all households and businesses, irrespective of income level, have access to and can efficiently use the suitable financial services they need to enhance their living. On the other hand, Open Banking initiative assures customers get a secure, agile and rich customer experience. The two initiatives are to benefit “THE CUSTOMER” then why not let them collaborate and access manifold advantages. The Problems Faced by Individuals/Businesses in rural/remote areas Access to Banks and Banking is tough and costly Even though individuals have a bank account, they are not in an operational state or dormant as operating the bank account is like traveling to a distant town. Lack of Financial Education High-interest rates for businesses who are in need of loans Lack of transparency leads to broker/dealers conning individuals and enterprises The absence of proper banking services limits their capability while collaborating with urban clients.   Could Open Banking Help in Solving the problems? Let’s pick each case and analyze if Open Banking could resolve these problems. Accessing Banks and avoiding DORMANT status Fintech, Banking technology and government initiatives are helping individuals to open a bank account with the help of technology. With banks now equipped with digital channels, opening a bank account could be done via Bank Agents or Agent Banking. These foot soldiers’ are authenticated by respective banks to be the middlemen between the bank and the customer. With the digitization and availability of smartphone, banking apps are installed on the phone and all the services availed by the customer have a track record providing transparency to the process. Open Banking helps users to access the bank account via authorized third-party apps, assist in bill payments, funds transfer thereby keeping the account in ACTIVE status. Access to Financial Literacy Thanks to innovative fintech models and open API that you can download an app on your mobile hook it to your bank account and learn about different terminologies like what is savings account? What interest rates mean? How are interest rates calculated? Etc. All of this could be accessed in your native languages, thanks again to open API and open data. Interest Rates Offered as per Regulatory Orders If an individual applies for a personal loan to the bank, with digitization in a place, he would be offered the interest rates as approved by the regulatory authority of the country. In cases where an individual is served by different banks, he/she can use a third party app using Open API model to compare which bank/fintech firms offer the lowest interest rate? Access to Growth and Opportunity The same example of Jonathan would be the most apt here as with Open API module, and Open Banking concept applied, Jonathan now could reach out to more urban clients without the need to leave his native place. Teknospire enabling Financial Inclusion with Open Banking Teknospire growth has been a structured one, each module evolving in a planned manner, approaching digitization one at a time. With an Open API design, the salary automation platform designed for civil servants of Zimbabwe was seamlessly connected to government payrolls and corporate ERPs. Next move was to offer a platform that helps the customer to pay bills, recharge and funds transfer and Bill Automation platform or micropayments digitization birthed. Next module was to help solopreneurs or banking agents and we launched Agency and Payment Module for individuals to access the digital platform and help in last mile banking. With a stable ecosystem, rich customer base, and tested platform the small and cooperative banks saw an advantage to extend their reach. With a lean banking layer or Agent Banking solution as a new addition to our offerings. Banks trusted us as the technology provider, and started collaborating with us where they get Merchant Banking, Agent Banking, Automatic Reconciliation, Micropayments as solutions. The beauty of all these modules has been the standalone working, enabled with Open API architecture. The Banks or NBFCs or microfinance firms could either sign in for all modules as one suite or could get one module of their choice. With Open API it helps firms to integrate with their systems smoothly.

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