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F inancial I nclusion Standardization

F inancial I nclusion Standardization. Financial Exclusion. There are several definitions for Financial Exclusion (perhaps we need a standard even for that) Financial Exclusion may be defined as inability to access mainstream financial services Bank accounts Low cost loans

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F inancial I nclusion Standardization

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  1. Financial InclusionStandardization

  2. Financial Exclusion • There are several definitions for Financial Exclusion (perhaps we need a standard even for that) • Financial Exclusion may be defined as • inability to access mainstream financial services • Bank accounts • Low cost loans • lack of reliable financial advice

  3. Financial Needs access to safe, easy and affordable credit and other financial services for economic growth, reducing income disparities and reducing poverty

  4. Supportive Financial Services Source : RBI

  5. Progress in Financial Inclusion • Accounts with Institutions (2007)(SCBs, RRBs, Primary Agri. Co-op Societies, Urban Co-op Banks, Self-help Groups) • Savings Accounts 610.20 million (82/100 adults) • Credit accounts 187.10 million (25/100 adults) • “No-Frills” accounts (Mar 2008) 15.83 millions

  6. Challenges! • Enrollment of large numbers • Wide geographic spread • High maintenance costs for accounts • Small ticket size of transaction • Illiteracy and use of vernacular • Product & service pricing • Trust and acceptance • Lack of electricity • Poor telecommunications

  7. Salient Features of our RFP • Proven Technology • Scalable and interoperable system • Contact or Contactless smartcards • Fingerprint image acquisition as per RBI norms • End-to-end Solution (technology and banking services)

  8. Technical Specifications - RFP • Smartcard • ISO 14443 / ISO 7816 • Standard dimension PVC / Polycarbonate Card • DES/3DES (key length 1024/2048) • EMV Compliant • 32 K EEPROM memory • Hold User Certificates, Smartcard OS, Applications, etc

  9. Technical Specification - RFP • Handheld devices • Integrated system or 2/3 components • ISO 14443 / ISO 7816 and ISO 18092 for read and write operations • Built-in PKI support • EMV Compliant • Multilingual support • Online & Offline capability • Secured storage and communication • Long hours of battery support

  10. Technical Specifications - RFP • Fingerprint Scanner • Image acquisition at setting level 31 of ISO/IEC 19794-4 • Contact area 1 x 1 sq.inch • Min. capture-size 13mm wide x 17 mm high • Pixel density 500 ppi with + 5 ppi • Pixel depth 8 bits • 200 grey levels (dynamic range of scanned image) • Sense live-scan plain finger impression • Strong anti-spoofing features • Protection from ambient light, residual images • Standard for Data-Interchange - ANSI-378 • Encrypt fingerprint minutiae with 3 DES • Scanner surface to be resistant to dust, humidity, shocks, electronic discharge, ambient light, extreme temperatures, etc

  11. Responses to RFP

  12. Pros and Cons of some Technologies- Source RBI

  13. Pros and Cons of some Technologies- Source RBI

  14. Architecture suggested by Govt. of AP FRONTEND SYSTEMS CONNECTIVITY BACKEND SYSTEMS Biometric scanner ISO 19794 Financial Switch Backend Banking Server GSM/GPRS/PSTN/ LEASED LINE/ INTERNET Smart Card Reader Smart Card POS Terminal Printer ISO 7816-4 / ISO 14443-4 ISO 8583

  15. Objective Standardization • By introducing standardization in financial inclusion we aim to “Establish, maintain and pursue adoption of standards so as to enable an open and interoperable infrastructure for smart cards, devices and systems that simplifies development, deployment and management of applications across industries”

  16. Interoperability – flexibility and freedom of choice • Ability of one application to communicate seamlessly with another • Ability to mix and match various components from one vendor with those of another • Ability to interact between one organisation and another • Ability to transact between different users that do not use same technology

  17. Standardization in Applications Developing Generic Interface for Enrollment for use of • Business Agent • Customer • Bank Officer End-to-end Transaction handling • Application on handheld smart device • Application on Switching/Intermediate server • Backend Banking software (business logic). • Card Management Software • Interfaces/integration with existing Core-Banking software. Card Management Software • Generic to any Smartcard Type • Generic Card Personalization • Lifecycle management  of different card types

  18. Standardization in Transaction • ISO 8583 Standard for transaction request and response between HHT and Intermediate server • Cardholder-originated transactions include withdrawal, deposit, refund, reversal, balance inquiry, payments and inter-account transfers. Reconciliation of transactions of BC account and customer account • Standards for checking the validity of the card in HHT and routing of transaction from Intermediate server to other bank server

  19. Standardization in Security • Enrollment station • Security of data stored on the system • Secured mode of data transmission to server • Hand Held Terminal • Authentication of business correspondent & Customer • Standards for Fingerprint scanning / threshold of match for authentication of customer • Secure transfer of Data between HHT and smartcard • Secure interaction between HHT and Intermediate Server • Intermediate server • Security of data

  20. Technology Standardization aspects of Smart card

  21. LCD display • Keypad • Optical Biometric Finger print sensor • ISO/IEC 19794-4 • Contactless Smart Card reader with Mifare, DESFire, • JACOP, SCOSTA • Thermal printer • Speaker • Connectivity (GPRS/CDMA) • Support Offline/Online transactions • Improved operational efficiency, reliability and better logistics. • Eliminates challenges in identification of defects in multiple devices. Standardization of Integrated Hand Held Terminal

  22. Deployment channel -1Card Many Applications The smart cards can be used for various purpose like Financial inclusion, Merchant Establishments, Government initiatives like Pension, NREGS disbursement, ATMs, Shopping Malls etc. ATMs Financial Inclusion Merchant Establishments NREGP Disbursement Shopping Malls Pension Disbursement

  23. Achieving Synergies - Integration Technology Providers • Service Providers • Chip Manufacturers • Card Manufacturers • Device Manufacturers • Software companies • Application Developers • Systems Integrators Banking Channels • Smart Phone • ATM • Point of Sale Termnial • Personal Computer • Telephone • Mobile phone • Set-top Boxes • Kiosks

  24. Q & A Contact details: N. BHARATH BHUSHAN REDDY DEPUTY GENERAL MANAGER DEPT. OF INFORMATION TECHNOLOGY ANDHRA BANK, HEAD OFFICE, HYDERABAD nbbharat@yahoo.com dgm-dit@andhrabank.co.in

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