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JAIPUR 16 DEC 08

TECHNOLOGY FOR FINANCIAL INCLUSION. N D RAO. Indian Institute of Banking & Finance. JAIPUR 16 DEC 08 . TECHNOLOGY FOR FINANCIAL INCLUSION Why do we need to talk about it. Extremely large target population Current Banking systems service merely 33% of total population

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JAIPUR 16 DEC 08

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  1. TECHNOLOGY FOR FINANCIAL INCLUSION N D RAO Indian Institute of Banking & Finance JAIPUR 16 DEC 08

  2. TECHNOLOGY FOR FINANCIAL INCLUSION Why do we need to talk about it • Extremely large target population Current Banking systems service merely 33% of total population • Customer profile different Very low Literacy levels and Awareness • Business Processes need re-engineering Existing processes can not produce desired results • Independent Delivery Agencies Deployment of Business Correspondents/ Facilitators • Latest trends in Technology Cost-effective state-of-the-art technologies are available today

  3. TECHNOLOGY FOR FINANCIAL INCLUSION Profile of Financial Inclusion Technology • Capture Customer details and facilitate Unique Identification • Provide non-repudiable and user-friendly authentication mechanism • Ensure reliable connectivity upto the last mile • Offer Financial products tailored for the target group • Support comprehensive Credit Information System • Support use of multimedia and innovative User Interfaces • Work in rural environmental conditions • Low Capital and Maintenance costs

  4. TECHNOLOGY FOR FINANCIAL INCLUSION Financial Inclusion Processes • CUSTOMER ACQUISITION Identification Enrolment Account Opening • BANKING TRANSACTIONS Cash Deposit Cash Withdrawal Government Benefits/ Payments Transfers Remittances Micro Finance • NON-BANKING TRANSACTIONS Micro Insurance Investments Value-added Services

  5. TECHNOLOGY FOR FINANCIAL INCLUSION Card Based Identification • Why Cards? • Choice of Cards Magstripe Card Contact Smart Card Contactless Smart Card Plain PVC Card Plain Laminated Card

  6. TECHNOLOGY FOR FINANCIAL INCLUSION Card Based Identification MAGSTRIPE CARD Data laid out on a magnetic strip at the back of the card in three tracks. A magnetic stripe card may have any of these tracks, or a combination of these tracks. Track 3 is used for financial transactions. ISO Standards are used for encoding the data in the tracks. Approximate Cost Rs10 - Rs15

  7. TECHNOLOGY FOR FINANCIAL INCLUSION Card Based Identification CONTACT SMART CARD Smart Cards have embedded microprocessor in a contact area, comprising several gold-plated contact pads, which can store and process data. They can receive input which is processed — by way of the ICC applications — and delivered as an output. Capacity: 8K – 64K Approximate Cost Rs75 - Rs120

  8. TECHNOLOGY FOR FINANCIAL INCLUSION Card Based Identification CONTACTLESS SMART CARD The chip communicates with the Card Reader through RFID (Radio Frequency Identification) induction technology. These cards contain an Antenna but not gold-plated contacts and require close proximity to the Reader to complete transactions. Capacity 1K - 4K Approximate Cost Rs125 - Rs200

  9. TECHNOLOGY FOR FINANCIAL INCLUSION Card Based Identification PLAIN PVC CARD PLAIN LAMINATED CARD Plain Cards which can carry Customer Information, a photograph, hologram and a barcode if necessary Approximate Cost Rs2 – Rs10

  10. TECHNOLOGY FOR FINANCIAL INCLUSION Authentication • USER/ CUSTOMER AUTHENTICATION • WRITTEN AUTHORIZATION Signature/ Thumb impression • PIN BASED AUTHORIZATION What you have - What you know • BIOMETRIC AUTHORIZATION Fingerprint/ Iris/ Voiceprint

  11. TECHNOLOGY FOR FINANCIAL INCLUSION THE RIGHT CHOICE • OPERATIONAL CONSIDERATIONS • COST CONSIDERATIONS • REGULATORY CONSIDERATIONS USE SMART CARDS OR CARDS SMARTLY?

  12. TECHNOLOGY FOR FINANCIAL INCLUSION CONNECTIVITY ISSUES • OFF-LINE/ ON-LINE/ REALTIME • INTEGRATION WITH BANK SYSTEMS • INTERNET/ V-SAT/ MOBILE COMMUNICATION • LAST MILE CONNECTIVITY - GROUND REALITIES

  13. TECHNOLOGY FOR FINANCIAL INCLUSION HANDHELD DEVICES A simple Handheld device

  14. TECHNOLOGY FOR FINANCIAL INCLUSION HANDHELD DEVICES A Handheld device with Value-added Services

  15. TECHNOLOGY FOR FINANCIAL INCLUSION INNOVATIONS • MOBILE TECHNOLOGY • 2-D BARCODES • BIOMETRIC LOW COST ATM • SUPPLY CHAIN SYSTEMS

  16. TECHNOLOGY FOR FINANCIAL INCLUSION LOW-COST ATM

  17. TECHNOLOGY FOR FINANCIAL INCLUSION A Typical Architecture

  18. TECHNOLOGY FOR FINANCIAL INCLUSION QUESTIONS

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