Financial Inclusion

Finance, Financial Inclusion, FinTech, Fintegration

No bank is an Island – Fintegration is the key. Welcome to the era of Digital Banking

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The buzz around fintech has gained substantial attention of traditional financial institutions, startups, venture capitalists and regulators. Banks and regulators are hard-pressed to revisit their operating model and policies respectively to create a conducive environment of collaboration and dynamism amidst the participants in the fintech ecosystem. – FinTech in India, A Global Growth story by KPMG & NASSCOM  Financial Services and Technology:  The world today is witnessing the phenomenal unprecedented occurrence between FinTech and Banks – Fintegration Redefining FinTech Transformation – Fintegration As the saying goes-“Every coin has two faces”, The FinTechs and the traditional banks have their respective merits and their own limitations. To build on their common business interests and to eliminate their weaknesses, collaborating logically,  so that together they can explore potential needs of customers and deliver, is the ‘need of the hour’. “Banks that do things well are our allies, but banks that do things badly are our competitors. We are in the same sector and we should move forward together.” This statement by Alfonso Sainz de Baranda, from Ahorro.net, on how fintech startups should interact with the traditional financial institutions, clearly summarizes the ‘should be’ relations between the most traditional financial entities and fintech startups to have a  strategic and streamlined partnership –   Fintegration.     THEN & NOW : Why Collaborate? THEN: 2010-15 Scenario To better understand the rationale behind the collaboration of Fintech and traditional banks, referring to The Economist Intelligence Unit Survey 2015, also titled The Disruption of Banking, the survey reported the findings of more than 100 bankers and fintech executives across the globe. It stated the advantages and disadvantages of both sides and their impact on each other. The following were the key findings: Dominance Remains with Banks: While 33% of bankers predicted that in the next five years the era will be of  ‘FinTech+Bank’ , 46% FinTech executives confirmed that banks will continue to dominate.   FinTech lacks Legacy and Funds: 27% fintech respondents believe that they lack risk management experience, and 25% think that they do not have the necessary investment capital. The percentage of executives who believe that they have limited product line and lack legacy systems were 34% and 33% respectively. The absence of Strategic vision with Banks: 49% of bankers believe that banks lack clear and strategic vision for digital. Also, around 38% think that banks do not harness a culture where they can adjust to rapidly changing ecosystems. 42% agreed to danger of security breaches with banks as the main weakness. Both Sides Compliment each other: Amusingly, both fintech and banks have complementary strengths and weakness. NOW: 2017 Scenario To understand the rationale behind the collaboration of Fintech and banks, which is still going strong, let’s look at the “World FinTech Report 2018” survey, conducted by Capgemini. Highlighting successful Fintegrations, ING Bank and Scalable Capital, it suggested that: ‘An alliance between traditional financial institutions, like Bank and FinTechs has become the need of the hour. The blend of their respective competitive advantages and disadvantages perfectly complements each other.’ Further, the report states that FinTech growth has been exponential since 2010. The end of Q3 2017 saw them grow by engulfing more than 7,500 deals and raising USD 109.8 billion. Reinstating on the above point the report states that during the survey more than 55% FinTechs agreed that they would love the relationship as that will enhance- Visibility for them, Economies of Scale, Customer trust, and Distribution Infrastructure. In addition, more than 75% of FinTechs confessed collaboration with traditional financial firms as their primary business objective. The banks, also attracted to the technology wizards, support the alliance. The same is evident when Benoit Legrand, CEO, ING Ventures and Global Head FinTech (ING), said and I quote: “ING should be freeing up time for its clients. For example, with our partnership with Kabbage, we can now offer loans to Small Businesses in less than 10 minutes. This is a great illustration of how a bank and a FinTech can effectively partner” The perfect collaboration can be defined as the one which synergizes and reinforce their strengths and quash their weaknesses. It creates a single entity which can deliver results that they individually cannot. With the perfect combination of Bank’s Scalability, Risk Management, Regulations, Infrastructure, Brand recognition, Customer Trust, Investment Capital, Acquainted with Compliance, Acclaimed distribution network and Legacy system to name a few….. along with FinTech’s Innovation, Agility, Infrastructure built for digital, Innovative new products, Data Handling, Reduced cost and Speed to name a few….., we can build a strong collaborative partnership like never before. Win-Win for All With Fintegration,  it’s a win-win for all, from banks and FinTech firms to individual and corporate customers. The key benefits can be summarized as: a. Benefits to FinTech: They can scale their business and hence confirm a substantial ROI. Ramp up millions of customers with speed. They will receive investment capital to scale-up their business. Better the risk management. Widen their customer reach and penetration b. Benefits to Banks: Will have innovative products in their basket of services to offer to customers. Will deliver products which will certainly give superior customer experience. Launch newer customer-centric products. Reduce the transactional costs. Enhanced efficiency. Elimination of intermediaries. c. Benefits to Customers: High-levels of products, services, and solutions. Functionalities with high speeds. Reduced risk. Services and products in a secure ecosystem, and governed by authorities. Innovative products at their doorstep or directly into their hands or fingertips.   Fintegration across the Globe The collaboration between FinTechs and banks are not the talk of future, rather it’s the reality of today. Both are getting into partnerships and product integrations, direct investments and venture debts, VCs and fund-of-fund investments. There are successful Fintegrations like: BBVA Banco Bilbao Vizcaya Argentaria is a multinational Spanish bank and is the second largest in Spain. By the second half of 2016, BBVA launched its API market-place, which aims to offer other companies, startups, and developers to use eight of its APIs. Therefore, allowing integration of customer banking data with

Bank - FinTech Merger
Finance, Financial Inclusion, FinTech, FinTech Trends, Mergers & Acquisitions

Bank – FinTech Merger Importance and repercussions

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The financial services industry has entered 2018 with a focus on digitizing services to better meet customers’ needs. But do the banks understand that previously inefficient, paper-based processes and messy ‘not so friendly’ user interfaces are no longer going to be good enough in today’s technologically advanced environment? Banks are needed to connect digitally to succeed. With FinTech continuing to gain momentum, it’s just a matter of time, to see them fully integrated into business-as-usual banking. One of the world’s largest Deutsche bank calls for “a shift in mindset from one of competition to collaboration,” arguing that traditional banking providers and new innovators must work together in order to revolutionize the payments market and the wider financial sector for the benefit of all. They said it and I quote: “For both parties, a partnership should liberate them to focus on their core competencies and contribute these areas of expertise to the innovation process.” Fintech, no doubt, is the talk of the day amongst investors, financial service providers, entrepreneurs, and even big corporate houses. The phenomenal potential of creating innovative services and business model makes it disruptive in nature. Realizing the immense potential of the technology, “Banks” are looking to integrate with FinTech solutions. In short Bank+FinTech merger  is next on the cards in the coming years. Welcome to the Era of FinTech. FinTech Nudged All FinTech, the technological innovation in the financial arena, registered its birth as a back-end activity, and today is nudging everything across the globe. It has transformed, almost everything, in such a way that you are about to witness the impact of the “fourth industrial revolution”. More than anything, it has created its own “FinTech Ecosystem” by embracing  the following: Digital Payments Remittances Insurance Lending Financial and Wealth Management Retail Banking FinTech has impressed the Banking Sector and its customers, which is why the transformation in banking has touched a new height. The “2016 World Retail Banking Report” states that almost two-thirds of the retail banking customers across the world use FinTech products or services like cards & payments, loans, Investments, financial advice and mortgages. This is because of the UX standards they offer to their customers. 81% of the customers feel that FinTech offers faster services and extends a great experience. In addition, FinTech firms are fast catching up bank’s “niche parameter”- TRUST. The percent of customers who have complete or partial trust in FinTech firms is as high as 87.9% across the globe. FinTech-Globally Embraced Global acceptance of FinTech is evident from a recent comparative study by EY (formerly Ernst and Young) which reported FinTech adoption between 2015 and 2017 has increased across various countries like- Australia, France, Germany, China, and India. The figures indicate adoption of past (2015), present (2017), and future (as responded in the survey). The adoption of FinTech in these countries has climbed exponentially: Australia- From 13% in 2015             to       37% in 2017 France-     From 27% in 2015             to       40% in 2017 Germany- From 12% in 2015             to       35% in 2017 China –     From 69% in 2015             to       77% in 2017 India –       From 52% in 2015             to       80% in 2017 ‘Banking with FinTech’ attraction Like any other sector, Banks have started reacting to FinTech, and since 2015, FinTech Banks have started emerging. Banks and Financial inclusions have initiated startup programs to constitute FinTech companies. Across the globe, 43% banks created such startups. Another 20% set up VCs to fund FinTechs. There are obvious reasons behind banks being forced to or influenced by FinTechs. EY FinTech Adoption Index 2017 released in June 2017 indicates that the appetite of digitally active consumers has risen considerably, from just one in seven digitally active consumers in 2015 to one in three in 2017. The report also shows that in 2017, there are 84% consumers aware of the fintech facilities in comparison to just 62% in 2015. The same reports show that the fintech adoption rate is expected to reach an average of 52% globally from the current rate of 33% in 2017. Such growth in numbers could soon blur the boundaries between different financial services, laying down new standards for the industry during the process. To stay ahead of the curve, financial firms would benefit from the technical assistance from the fintech startups. Why FinTech Lures Banks Unlike traditional banking, FinTech reduces  structural cost and operational deficiencies. The communication between branches or P2P transactions happens in real-time environments. Real-time updates, proactive alerts and agile innovation are an integral part of an enhanced customer experience. When right technology is used, it can reduce the need for manpower and even the “Brick and Mortar” locations. FinTech provides simplicity of design and power of contextuality that consumers are increasingly expecting. Another customer expectation of ‘externally simple yet internally efficient’ service platform is forcing the banks to rethink their policy of ‘working alone in stumbling mode’ or ‘working and staying ‘in the game’ powerful mode. It also enhances  regulatory compliance and better service to customers. Fintech firms like Teknospire are delivering convenient and affordable services by providing sustainable solutions for digitization of financial ecosystem to market segments (unserved and underserved) by taking care of their need for microloans and grants to the last mile, that till today were thought as unprofitable zone for  banking organizations. User friendly, data focused seamless technology is bringing more personalized offerings. With the security aspect, well taken care of, with biometric advances, the virtual reality solutions are helping customers interact with the banks in innovative ways which were unheard of, with traditional banking. The fast and efficient products and services of FinTech have attracted Banks to offer P2B services. This is evident from the fact that many have started offering traditional in-bank services on mobile devices as well. This has helped them offer high levels of access to consumer, and hence, a better usability and User Experience (UX) standards. Advantages of the Alliance betweenFinTech and Banks With FinTech and Bank partnership, the ultimate

Finance, Financial Inclusion, FinTech, FinTech Trends

Why Fintech B2C and B2B solutions are more in vogue in Asia?

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Preamble The global Fintech trends show an investment of £25.6bn in 2015 rising to £27bn by 2016. The global Fintech investments doubled in the period ending Q2 ’17 and reached $8.4billion. Similarly, in the period ending Q4 ’17, the figure was $8.7billion across 307 deals with annual global Fintech investment touching $31billion in 2017. FINTECH ASIA Asia probably “knows the way, goes the way, and definitely shows the way” and hence, is leading the globe in Fintech, fast embracing the innovation, adoption, and attending the unaddressed Asian customer needs. Fintech has seen some incredible growth around the world. According to DBS CIO Neal Cross, and I quote : “Asia is the real “waking giant” on the scene. Late to the party but catching up fast.”         The fact that of the top ten leading Fintech companies in the world, five (Ant Financial, Qudian, Lufax, ZhongAn, and JD Finance) are from People’s Republic of China (Asia) is enough to justify the lead. Source : Top 10 FinTech Companies in 2017         Though the primary focal point of Fintech companies has been customer-based initiatives (B2C) and customer experience, it seems they have started believing in “ignore the noise and focus on the work”; hence, have shifted their focus to B2B solutions. In the period ending Q2’17, it is reported that out of the top 10 Fintech global deals, three are B2B-focused companies namely- CCH Tagetik ($321m), Pos Portal ($158m), and ITRS Group ($140.6m). Trends Which Keep Asia Leading the Fintech B2B and B2C Solutions Fintech investments Trends in Asia The legend “Only a king can attract a queen and only a queen can keep a King focused” stands true for Asian Fintech markets. The King of global Fintech- Asia has been attracting a lot of investments in the recent past which is evident from the Fintech trends in 2016, of the £27bn global investment £11.7bn was done in Asia, a whopping 44% share. Leading the region, China is estimated to have done an investment of $10bn in 2016 followed by India which did a Fintech investment of $1.1bn Fintech investment. Source : The Fintech Times May12,2017 Apart from these two major countries, other countries like Thailand, Cambodia, Myanmar, Malaysia, Indonesia, and the Philippines did a cumulative investment of $217mn in 2016. Singapore and Hong Kong clocked $800mn with $400mn each, which experts feel is a clear financial prediction of these countries becoming crucial Fintech Hubs in the near future. Latest Fintech Trends in Asia Asia, no doubt has become the largest hub for B2B and B2C Fintech solutions hub of the world and holds some of the largest Fintech companies like Ant Financial (US$60Bn), Lufax (US$18.5Bn), JD Finance (US$7Bn) and Qufenqi (US$5.9Bn). Incidentally, all the four unicorns are from the People’s Republic of China (PRC). There are obvious reasons behind Asia leading the Fintech race and the following Fintech Industry trends in the last few years suggest that Asia will see more movement in the Fintech space. Why Asia leading the Fintech race? Unbanked Populations It is said that 73% of the unbanked population of the world is in 25 countries, majorly in Asia. Since more than half of the world’s population is in Asia, Fintech firms have exploited the emerging needs or demands of the mass and have delivered innovative products and services like- Virtual wallets, Internet lending, e-commerce, P2P lending, payment gateways or mPOS. To match the pace of Fintech firms, traditional banks started adopting similar   products and services and ended up in digitalization of banks. VC-Funding     One of the major reasons for the Fintech industry of Asia experiencing an explosive growth and innovative products and services is strong Venture Capital funding. ‘Ambitious investors are turning their attention to opportunities in Asian emerging markets. It’s Asia, with its enticing mix of booming middle-class populations and rocketing Smartphone adoption, that arguably offers the greatest opportunity for returns on FinTech investments’, according to Michael Lints, venture partner at Singapore-based VC Golden Gate Ventures. In China, the gradual shift away from a manufacturing-centric economy towards a service and consumer-led economy, coupled with the support of the government through financial incentives, is helping in fostering the innovation and entrepreneurship in the region, which bodes well for the future of VCs. With the power of the internet increasingly breaking down geographic barriers, and the combination of high speed of internet, higher spending power and a freer adoption of technology means that fintech has an entire market of willing and able customers. Not only Asian countries are presenting opportunities for VC investment but also  seen is the  greater interest in companies that have businesses that are integrated with these regions, as they can tap into the abundant resources, as well as the enhanced logistics network that has been built over the years. Furthermore, in an era of decreasing interest rates, investors are considering alternative investment options, making VC funds an attractive choice. VCs are focusing on unbanked and underbanked sector of Indonesia, with its massive population becoming tech savvy and gaining increasing levels of disposable income. It is the world’s fourth most-populous nation, with Jakarta alone home to 10 million people. The World Bank reported the country’s GDP per capita to have exploded from just $560 in 2000 to $3,374 in 2015, while the Indonesian FinTech Association says fewer than 36% of adults have formal bank accounts. Not only B2B but also the massive B2C market open ups the lucrative era for VCs. According to Michael Lints, venture partner at Singapore-based VC Golden Gate Ventures, payments is  a major area of focus for business in the region. “A large number of startups are focusing on the B2C payments market because that’s where there is an open gap, especially when you look at the number of people that never use a bank for their payments. For them is has always been cash but now they are using smart phones. Making these devices a means of doing online payments is

banking-is-necessary-banks-are-not
Financial Inclusion, FinTech, FinTech Trends, Open Banking, Technical Updates

Open Banking – Is it comforting to customers or not?

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Big changes are on the horizon. You may have seen or heard about Open Banking, PSD2, and CMA in the news over the past year. Or, you may be hearing about them for the first time right now. Fortunately, Open Banking is right here and it is going to stay. In the banking sector, the concept of “open” can seem contradictory. Banks traditionally have a “duty of care” to protect their assets rigorously, as required by regulators and customers. Traditional Banking is been the same for…just about forever. For the most part, the power dynamic between banks and their customers has stayed about the same. Whether you bank in person, over the phone, online or mobile, the relationship with banks hasn’t changed much alongside the technological advancements. You set up an account with your bank, they facilitate the ebb and flow of your money, and, as a result, they hold the data around that money. All of the histories around your purchases, loans, payments, debits, and credits rests with them. Now banking is about to undergo a major shift. With the ‘Open Banking’, (the outcome of the beautiful blending of Financial and Technology sectors), all of that is going to change. With…… Improving overall customer experience by engaging them and to attend to customer needs in a secure, agile, and future-proof method. New Revenue streams by increasing digital revenue from new channels. As rightly said by Kristin Moyer, Vice President of Research and Distinguished Analyst at Gartner and I quote……“Open Banking is about making everything for sale. It provides a new way to increase digital revenue for the banks that are willing to think differently about what it means to be a bank.” Sustainable service model for underserved markets. ………… open banking is definitely a welcoming change. BANKING: THEN & NOW In 1872, when first wire transfer happened nobody would have imagined how the entire scenario will change from wire transfer to ATM’s in the 1960s to telephone banking in 1980s.  1997 saw the rise of internet banking which paved the way to contactless payment in 2007 and mobile banking in 2010, but still, the traditional ways of banking continued. But NOW  Human-Centered Fintech is making way for personalization and open banking. What is Open banking? Open Banking is a financial services term as part of financial technology that refers to: The use of Open APIs that enable third-party developers to build applications and services around the financial institution. Greater financial transparency options for account holders ranging from Open Data to private data. The use of open source technology to achieve the above. Thus, “Open Banking is the possibility of creating new digital business and ecosystems through APIs provided by the banks. How does Open Banking work? Open Banking will enable companies to give more accurate personal financial guidance, tailored to your particular circumstances and delivered securely and confidentially. To provide tailored advice, companies need to know how you use your account. At the moment, to get personal financial guidance, you have to hand over your confidential banking information to price comparison websites. Source: by Wikimedia Commons Open Banking will use APIs (Application Programming Interfaces) to share customer information securely. Companies will be able to use open banking APIs to see your transaction information to tell you what you might save when considering the current account best suited to you. Or if you run a small business you could find the best deals for your business accounts and loans. No in-betweens, no interruptions, just pure and simple direct customer-to-service relations Open Banking at its best. HOW BIG IS OPEN BANKING?? ….. well the picture says it all Source: https://goo.gl/VmjhSy WHO’S WHO ……ZOOMING ON OPEN BANKING Source: https://goo.gl/VmjhSy So, how does it help, and why does it matter to you? To answer these questions, let’s take a look at what open-banking brings to the digital market and on your FinTech plate.                                                      Source: europa Transparency of Data Companies connect with third-party APIs by developing apps which provide financial services for their customers and connect with banking sectors/firms for access to customer data and personal info. This transparency of data leads to the establishment of improved customer relations. Through open-banking services, you’ll be able to invest in financial products manage your money get detailed financial statements generated pay from one platform to the other (like how you use Paytm for paying your BESCOM bills or the Simpl/LazyPay wallet to pay for other services). Think open-banking, think big-picture. No back and forth dialogs, no payment hassles or dealings with banks. Direct peer-to-peer payments and transactions between customers and businesses. Period. Image Source: Medium.com Safety Benefits If safety wasn’t a priority, we’d all be worried. Open-banking doesn’t compromise on security and leverages Fintech services to adapt to growing security needs. With Agile technologies operating on robust platforms, open-banking is built on a platform of secure systems which means your personal data doesn’t leak to anonymous parties or get hijacked. Banks share personal data through APIs and intermediaries and connects developers with payment networks like VISA and MasterCard for the seamless exchange of money balances and financial information. Cybersecurity measures and anti-intrusion technologies come integrated with APIs, thus building upon layers of transactional security. Image Source: Zanders.EU Consumer-Centric Approach At the end of the day, we love our services and open-banking matches consumer expectations. From Uber’s APIs integrating Google Maps and payment gateways to companies using Big Data, Analytics, and FinTech services to leverage creative products and services, open-banking gives users total control over their financial exchanges. Customer engagement as is (left) and after PSD2 (right) Source: europa Data sharing in financial services tend to be the risk- and permission-based, with required audit trails, and subject to regulation and risk management. If done well, however, it can deliver increased security through enhanced know-your-customer capabilities, identity validation, and fraud detection. The current

Digital Banking
Financial Inclusion, Social Cause

FinX Digital Banking Solutions For Financial Inclusion In India

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The 2015 ”Digital India” campaign along with the 2016 “Demonetization” drive paved the way for the digitization of the Indian economy. With digitization coming in, the Indian banking industry having withstood the previous changes(Eg automation), accepted the change and opted in for digitization. With all the sectors of the Indian economy embracing digitization digital banking has become the new norm. By digital banking, I refer to the composite services provided over the web with the aim providing convenient ,faster,better banking experience when compared to traditional banking to the banks and customers. Digital banking was slowly introduced to the Indian banking customers through ATM initially then online banking and mobile banking. However digital banking trend has inclined more towards E -wallets, P2P lending, Cloud technology in the last 5 years. With the Indian banking industry transforming from brick to mortar to digitization below are some of the advantages that it would enjoy with digital banking adoption. Digital Banking Advantages Pic Courtesy: Finserv.com Having made digital banking an integral part of our economy it is equally important that we contribute towards digitizing financial inclusion. We at Teknospire realize this and contribute to this cause through our flagship product “FinX”. Finx helps financial institutions to bring FinTech driven banking solution for the last mile. About FinX FinX is a complete digital banking suite that enables the financial institution to digitally offer basic and transactional banking services both with B2C and B2B2C based models. How FinX Solutions aide Financial Inclusion The FinX suite assists financial institutions in launching solutions through web and mobile, using which a Customer can sign up instantly with minimum KYC details. With minimum KYC details customers can open a”No Frills” account instantly and deposit money into this account using the various payment gateway options. Also, deposits can be made at branches or retail distribution network comprising of agents. On signing up, customers are financially included through the below various services :- Viewing Account Balance Load Money into the Account Apply for Loans/Credit Cards Generate Virtual Cards Recharge Mobile Phone Pay Utility Bills Pay Insurance Premiums Purchase Tickets View Pass Book and Transaction History Upgrade to a Regular Bank Account Fund Transfers using IMPS, both P2P and P2A Merchant Payments through Scan and Pay Using the FinX suite financial institutions can successfully draw customer initially for basic services and then bring them to mainstream banking. Using simple aggregation of service providers institutions can build a digital payment ecosystem by providing for transactional sets like subsidy distribution, donations, agri -payments, micro payments and loans in the FinX suite. FinX solutions can be easily integrated with the CBS (core banking system)for simplified Accounting and GL. Standard Interface Specification is made use of in our solutions. IMPS and AADHAAR Payments/KYC on this platform can be enabled using our existing integration with NPCI. Currently the FinX Suites available on our platter are Finx Payment switch FinX agency banking Finx Mobile money #FinX Products Thus our FinX solutions play an important role in digitization of financial inclusion and are coming out with more suites to capture the entire last mile transactions.

Catalyst
Financial Inclusion, FinTech Trends, Social Cause

Agent Bankers – The Catalyst Of Financial Inclusion In Emerging Markets

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After a short break, I am back again to take my readers on an another tour of agency banking. While my previous tours Agency banking and Bitcoin , importance of agent banker gave us a peek into what is agency banking and their importance in emerging markets, this time let’s tour and get a peek into the catalyst role played by agent bankers to bring about financial inclusion in emerging countries like India. My tour would be through info-graphics and the tour itinerary comprises of what makes agent bankers most apt for this role, how can agent bankers become catalysts, what tools can be used by them to become enablers of financial inclusion. Welcome aboard on the tour and here we are at our first halt to find out why agent bankers are the enablers of change. What makes agent bankers suitable for the catalyst role Ticking off our first destination on our itinerary let us move on to our final and last destination “The Signboard”. “The Signboard” showcases the tools provided by Teknospire (such as MAKash e-wallet and Lean banking solutions provided to the MannDeshi foundation ) that can be of use to the agent bankers in achieving financial inclusion. However, let us walk through the ways in which agent bankers can contribute to financial inclusion before we arrive at our landmark signboard. The ways by which agent bankers can become catalysts are :- They conduct classes to educate people on the financial matters and create financial awareness. They sign up with a financial institution like a bank and start providing agency banking services. They initially handhold the customers to use different tools and then gradually wean them off the hand-holding by either making the customers self -reliable or by building a hierarchy of agent bankers below them to handle specific areas. Having walked through the above ways we are here at the sign board that displays Teknospire’s tools. Request you to have a good look at it before we return back to our point of origin. Teknospire’s agent banking tool Hoping that this tour has been enjoyable, I hope my guests would urge more agent bankers to use Teknospire solutions to achieve financial inclusion.

GST
Financial Inclusion, Social Cause

GOI initiatives to boost Social and Financial Inclusion

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Hon’ble Indian Prime minister Mr. Narendra Modi said – I dream of Digital India where mobile and e-banking ensure financial inclusion. We might have heard many such quotes from our leaders, but what has been the ground reality? Has the government made any progress? What were the initiatives taken to boost social and financial inclusion? Demonetization? GST? MadeInIndia? JanDhanYojna Or DigitalIndia? Let’s dig in to explore – Images Source – Collage What is the Scope of Financial Inclusion? What all services could you think that needs to be included in Financial Inclusion? Deposits? Funds Transfer? Loans? While we do not have an official information on what all services need to be included in Financial Inclusion, but here are the basic banking services that could enable Social and Financial Inclusion – Access to Banks Accounts Instant Credits Instant micro loans for small business, education or agriculture Savings and Deposits Health Insurance Funds Transfer Investment or advisory services Pension for elderly individuals In general, any financial transaction through regulated channel as overall objective Challenges in Enabling Financial Inclusion in India India is the land of villages and farming, yet banks and banking haven’t reached around 19% of Indian population. Few of the challenges faced by Institutions, NGO’s, Fintech firms are – Missing Business model No digital reach and coverage Lower rate of education Setting up a bank branch locally is a costly affair Initiatives by GOI to Enable Social and Financial Inclusion Pradhan Mantri Jan Dhan Yojana One of the primary and significant schemes that allow individuals to open a bank account, basic banking no-frills account with nil/very low minimum balance as well as charges. Insurance and Pension Scheme GOI launched Pradhan Mantri Suraksha Bima Yojana (Accident Insurance), Atal Pension Yojana (Unorganized Sector) and Pradhan Mantri Jeevan Jyoti Yojana (Life Insurance), to enable social and economic security to the underprivileged sections of the society. MUDRA Bank to support Entrepreneurship Micro Units Development and Refinance Agency Bank (MUDRA Bank), launched in April 2015 provides loans at a low rate to enable enterprise for founders on rural/remote areas. Stand up India Another scheme initiated by GOI, each branch of public sector banks need to support one entrepreneur from Women and minority society. Direct Transfer of Government Benefits As we are witnessing LPG subsidies now getting credited directly to your accounts, on similar lines through Pahal Scheme GOI is keen to transfer grants and funds directly to beneficiaries account, removing the middle layer. Micro finance companies[MFC] MFC that provide micro loans to farmers, stall owners, women’s help in structuring the financial loan service and helping people from the money lenders debt trap. GST As cleartax defines Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition. GST also brings in the benefits of enabling financial inclusion by – Simplifying the Tax We all know that apart from CA’s, accountants and some learned, tax and its rules are still a bouncer to many of us. We have seen a debate on why the restaurant charged a VAT or service charge or service tax on my bill? Or have we not witnessed a Tv commercial showing how a farmer from his mobile phone ordered seeds for his farming? Do you think he would ever understand why he has to pay VAT? or if stays in Maharashtra why he has to pay Octroi ? Or how about a rural individual selling his handcrafted products to Maharashtra, would have a tough time to know why while processing in Pune Octroi charges applies. With uniform tax system, it’s easy to learning making it simpler for individuals to absorb it. One System Digitization Digitization automation demands one system that could track the tax channels. With multiple tax laws integrating them into one system is tough. Hence many times we have seen people ignoring paying the tax because there was no system to track or pay it outside the formal system via cash. With solutions available now on mobile devices, it’s easy for any rural person to track down his selling/purchasing in all cases. Unorganized Sectors to be Structured with no middlemen With initiatives like Digital India, Aadhaar linking to Bank accounts, PF and PAN cards, the GOI is trying to tie individuals to one identity. Taking a step further with the introduction of GST linking of the identification to tax system would be easy for small businesses and unorganized sector to follow formal tax rule. Just imagine a potter trying to sell his products across pan-India would now have a single identity card linked to his Bank account and GST Registration. Standard Pricing With formal tax-system retailers cannot mark product pricing as per their wish. GST also has an anti-profiteering clause, that mandates all businesses to pass on the benefits to the end customers. With such initiatives, one could expect products to be available and consumed in remote areas enhancing their standard of living. Use of technology With the ease of technology and availability of mobile phones – solutions like Agent banking are enabling financial inclusion in the remotest areas of the developing countries like India, Bangladesh, and Zimbabwe. General Purpose Credit Card [GCC] GCC allows the holder with a credit facility of up to 25,000 in rural and semi-urban bank branches. The primary objective of this scheme is to provide instant and hassle-free credit to its customers. How Teknospire a fintech firm is enabling Financial Inclusion in India Teknospire with its tagline Inspiring technologies for better living is a proud contributor to help in financial Inclusion. With its range of Fintech and HealthTech solutions to provide secure Agent Banking or Mobile Money suite or to credit grants to beneficiaries account , Teknospire is making it possible. GOI is putting extra efforts to bring the change, however firms like Teknospire are adding value to these plans and making execution a possibility with our skilled team and latest technology. The financial architecture in place thanks to GOI; we have the

Financial inclusion for rural people
Financial Inclusion, Social Cause

How important is an agent banker in the rural banking sector ?

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Financial inclusion for rural people In continuation to our earlier blog ”Benefits From Agency Banking”, this blog would highlight the importance of agent bankers in rural banking. For a country to be fully developed rural development has to take place. Of late rural development has become the new buzz word for the developing economies. The central government bodies, local government bodies and the financial institutions in these economies are the primary development providers to the rural areas and its residents. While the local authorities are developing the rural areas with better infrastructure facilities, the financial institutions are following suit by providing financial inclusion to the rural residents. Currently, huge chunk of the rural population are unbanked and prefer to remain unbanked due to reasons such as :- Lack of banking awareness No banking need Banks having an intimidating presence Limited bank presence in the particular rural area owing to high operational costs Distance to be covered to reach the bank Unsafe travelling conditions Lack of technological awareness Financial institutions especially rural banks of the developing economies play a crucial role in the rural financial development. To ensure a successful rural financial development, the rural banking sector needs to grow by laying thrust on :- Sustainable community- focused banking Networks value Providing advanced banking solutions apart from basic banking solutions Creation of banking awareness amongst the rural population Lower cost of reach Supporting their growth, the rural banking segment is opening up to policies that promote financial inclusion. Rural banks are steering away from traditional branches and are looking forward to alternative forms of banking to provide financial inclusion. A few steps taken by the rural banks in enhancing their development include :- Use of intermediaries, in-house or contract agent bankers and not their own staff or branch networks. The agencies employing agent bankers are postal outlets, retail outlets such as groceries stores, pharmacies, petrol pumps. Providing doorstep banking using latest technology and agent bankers. Customer service point /Agent Bankers Scope for rural banking sector development through rural financial inclusion has given rise to agency banking. But how important are the agent bankers to the rural banking sector? Agent bankers help in stepping up the success of thrust areas laid above. Also, they enhance financial inclusion of the unbanked by :- Being delivery channel in providing basic banking facilities like deposits, withdrawals, remittances at the doorstep or at a place closer to rural population than the banks. Offering banking services in a low-cost manner which wouldn’t be possible for the rural banks. Ensuring 24*7availability unlike rural bank branches that work for limited hours in a day. Providing accessibility to bill payments and other utility payment facilities. Educating about the need for banking and its advantages in a more efficient way than the banks. Exposing the unbanked to various banking forms using technology such as mobile banking. Mobile Banking In Rural Areas Increasing the customer base for the banks by signing up new customers using their wide social contacts. Developing a good rapport with the customers and urging them to make frequent use of banking services with confidence. A branch seems intimidating to the rural people and would not provide the same comfort level. Using cost effective technology for their transactions help the rural banking sector to be tech savvy. Such as the agent bankers banking suite and mobile money suite used by the Ndasenda’s agents for their transactions.   Agent bankers by providing benefits to the rural banks and the rural customers,have attained a prominent place in the rural banking sector and their importance in the rural development cannot be overlooked. References: International Journal of Management Research and Business Strategy Diversified Channels in Rural Banking Worldwide Agent Banking: Penetrating Markets, Rural Communities For Financial Inclusion

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