Digital Financial Inclusion in India
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Financial inclusion is a multidimensional approach. With technology intervention in financial inclusion, electronic banking activity in rural India leads to increased use of financial services and better living standards. In the rising market, many people using mobile phones still are not able to access banking products and financial services. This indicates a huge untouched market for commercial banks. In India, mobile banking services are still in the early stages of development. Thus, the main objective of the chapter is to understand the factors that would act as drivers towards the adoption of mobile financial services and understand people's intention to adopt and use of mobile banking services which lead to increases accessibility towards financial products among rural people as well improve standards of living and overall development of the nation. The study focuses on utilizing secondary sources which is related to financial inclusion to understand the new banking technology and identifies people's behavior towards adoption and uses of banking services.Keywords:
Mobile Payment
SMS banking
This paper examines consumer adoption of mobile banking and mobile payments using the experience goods and learning by doing constructs as a framework to better understand adoption patterns in the United States and how these may differ in other world markets. Consumer experience and familiarity with mobile devices is considered along with three relatively new communication technologies – SMS text messaging, wireless Internet access, and near field communication (NFC) – that are making important contributions to mobile financial services. Online banking and contactless payments — and consumers’ experience with them — are also studied as “building blocks” to mobile financial services. Furthermore, this analysis considers other factors that are affecting adoption patterns, including financial inclusion opportunities, data security problems, and coordination issues. Together, the building blocks and these other factors will influence how markets for mobile financial services develop.
Mobile Payment
SMS banking
Mobile business development
Near Field Communication
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Digital technology applied to banking and financial transactions or e-finance, in general, has made financial services more widely available and affordable to consumers. With appropriate and affordable technologies and applications, the financially excluded and the unserved can participate in mainstream banking and finance that will open many opportunities for consumption smoothing and investment and earning possibilities. This paper attempts to study the contribution of technology towards financial inclusion in the Philippines and analyze whether e-finance has enabled the last mile consumers to avail of financial products and services affordably and conveniently. It uses data from financial inclusion databases, and results from a national financial inclusion survey, key informant interviews and focus group discussions with users of a mobile banking application. Electronic money transfers are found to be increasing in the country, but the digital adoption rate, particularly for mobile payments, is relatively low especially if compared with countries in the region. The study probes into the experience and concerns of digital finance users and presents recommendations to improve provision and use of digital financial products and services.
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This paper attempts to look into the issues regarding mobile banking services and their possible contribution in financial inclusion in India. With the help of this paper author tries to focus those areas where banks can provide these mobile banking services. For a successful financial inclusion i.e. inclusive growth, in this era, combination of both the services i.e. banking as well as mobile is very much required. Mobile banking which can be termed as virtual banking can do wonders for the economy, because these days growth in economy is possible with the help of financial inclusion, and in current scenario, statistics reveals that it is very easy wit the help of mobile banking. M-banking in India, as assessed by the govt. can work as a potent tool for financial inclusion, is yet to clear many hurdles before it can fulfill its objective of reaching the unbanked population. In fact including rural subscribers in the banking net can help in inclusive growth, as it not very difficult to go for a mobile phone rather than going for a computer in rural areas. This service can do wonders if implemented effectively and sincerely. If any service is provided, there are always two sides, supply side and demand side. M-banking in India, as assessed by the govt. can work as a potent tool for financial inclusion, is yet to clear many hurdles before it can fulfill its objective of reaching the unbanked population.
Keywords: Mobile banking, Impact, Financial Inclusion
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Inclusive growth
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Meeting the mobile money needs of the less privileged in developing and emerging markets opens up enormous possibilities for banks and newly emerged financial-technology firms. Many consider mobile money services a separate domain within the banking and payment sector, different from its siblings: automated teller machines, net banking, point-of-sale banking, etc. This study was conducted to investigate how mobile money services act as a reliable driver of digital financial inclusion and to determine the role of mobile money agents in the transformation from the traditional services to mobile money services. This paper presents a conceptual model based on the stimulus-organism-response paradigm. We propose that the mobile money agent characteristics are the stimuli, that the mobile money customer is the organism, and that the response of the organism to the stimuli is continuous usage, which leads to financial inclusion in the developing country of Ghana. The continuous usage of mobile money services by customers encourages more engagement experiences and advocacy intentions. We provide empirical evidence suggesting that mobile money agent credibility and service quality stimulate customer empowerment. Furthermore, we argue that for the less financially empowered customer segment, mobile money agent credibility provides the needed impetus for the continuous usage of mobile money services.
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Technology is the key for financial inclusion because that is the only way to reduce the cost significantly and reach the masses. Various kinds of technologies like personal digital assistants (PDAs), point of sale (POS)/smart cards, automated teller machines (ATMs), mobile phones and internet are suitable for financial inclusion due to affordability, accessibility, security and privacy. In the last decade, mobile phone technology has emerged as the most potential and well suited channel for financial inclusion. Use of mobile phone for inclusive finance is very popular in countries where most of the population is unbanked or underbanked. This paper discuss the various generation of information technology in Banking Sector, requirement of collaboration and innovations, various operation mode in market and banking services mix. This paper concludes in recent scenario when customer avail electronic services of bank they make proud. Day to day trends are change and different types of innovated services are provided to customer on low payment value. This is possible only by the technological innovation and growth of information technology. Information Technology provides the plotting about systematic banking, special and concentrated CRM strategy, and anytime, anywhere, anyhow banking.
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Financial inclusion is a multidimensional approach. With technology intervention in financial inclusion, electronic banking activity in rural India leads to increased use of financial services and better living standards. In the rising market, many people using mobile phones still are not able to access banking products and financial services. This indicates a huge untouched market for commercial banks. In India, mobile banking services are still in the early stages of development. Thus, the main objective of the chapter is to understand the factors that would act as drivers towards the adoption of mobile financial services and understand people's intention to adopt and use of mobile banking services which lead to increases accessibility towards financial products among rural people as well improve standards of living and overall development of the nation. The study focuses on utilizing secondary sources which is related to financial inclusion to understand the new banking technology and identifies people's behavior towards adoption and uses of banking services.
Mobile Payment
SMS banking
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Financial inclusion denotes delivery of financial services at an affordable cost to the vast sections of the disadvantaged and low-income groups. People in developing countries have less options for transferring money and accessing banking services, because there is less deployed formal banking structure: fewer branches and ATMs generally co-located to relieve branches, low internet penetration and easy access to fast and immediate sources of loans but at high cost. So a branchless banking channel using mobile phones could be far more preferable to poor people than the available options like travelling to and queuing at distant branches, forgoing their daily wages. Only about one-third of people living in developing countries have any form of financial savings with formal institutions. It is proven fact that it lowers the cost of delivery to banks in building and maintaining a delivery channel and availability of funds to customers of accessing services. Hence, the developing countries around the world concentrate more on implementing the mobile banking access to the unbanked mobile users, as a tool of financial inclusion, which is known as Transformational mobile banking. Hence the success of mobile banking in micro finance depends upon the mass customer adoption, utility of mobile service for cash-in and cash-out transactions, interoperability of providers, a country’s defined proportionate regulation and the ability of service providers to meet the regulatory challenges.
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Branchless Banking allows customers to access financial services beyond bank branches and thereby holds the promise of addressing two major hurdles to financial inclusion: lack of proximity and high costs. It builds on the sustained development of mobile telecommunications which makes it possible for the banking sector to embrace indirect distribution and for new mobile money services to reach otherwise unbanked customers. Banking beyond branches means newer partnerships to help poor people address the pain point of cash: by having better access to electronic transactions, access to all formal financial services becomes more convenient.
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Mobile banking has created a new channel to reach over 2.5 billion unbanked poor in developing countries. Conventional mobile banking services require clients to be able to own a mobile phone and know how to operate it. However, a majority of the unbanked poor in developing countries are illiterate or semi-literate earning fluctuating incomes, often less than USD2.00 a day, and live in remote rural areas without reliable technology infrastructure. We evaluate three companies providing innovative mobile banking services, ZERO, FINO, and ESE, which do not require the poor to own a mobile phone or know how to operate it. All three companies employ human agents equipped with combinations of mobile technologies like NFC and smart cards, who meet the poor in their villages to conduct financial transactions. We reflect on the economic impact, market opportunity, and other issues related to innovative mobile banking services in the concluding section.
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Mobile business development
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Access to, and the cost of, mainstream financial services act as a barrier to financial inclusion for many in the developing world. The convergence of banking services with mobile technologies means however that users are able to conduct banking services at any place and at any time through mobile banking thus overcoming the challenges to the distribution and use of banking services. This research examines the factors influencing the adoption of mobile banking by people at the Base of the Pyramid (BOP) in South Africa, with a special focus on trust, cost and risk. Data for this study was collected through paper questionnaires in townships around Gauteng. This research has found that customers in the BOP will consider adopting mobile banking as long as it is perceived to be useful and to be easy to use. But the most critical factor for the customer is cost; the service should be affordable. Furthermore, the mobile banking service providers, both the banks and mobile network providers, should be trusted. Trust was found to be significantly negatively correlated to perceived risk. Trust therefore plays a role in risk mitigation and in enhancing customer loyalty.
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