Tar­get­ing the Un­banked

Wire­less tech­nolo­gies en­abled bank­ing in­fra­struc­ture and func­tions will con­nect the re­motest cor­ners with the main­stream

Voice&Data - - M2M - Ashish Gu­lati

Although fi­nan­cial in­clu­sion of the un­banked pop­u­la­tion in the coun­try is high on the de­vel­op­ment agenda of the govern­ment, but there are sig­nif­i­cant chal­lenges in mak­ing it a re­al­ity. One of the key chal­lenges is to ad­dress the gar­gan­tuan need for build­ing the req­ui­site bank­ing in­fra­struc­ture to en­able the ru­ral ar­eas to ac­cess fi­nan­cial ser­vices. Ob­vi­ously, such an ef­fort re­quires large-scale cap­i­tal in­vest­ments that are not re­ally an at­trac­tive propo­si­tion for the fi­nan­cial in­sti­tu­tions.

Reach­ing the Un­reach­able

How­ever, in the past few years, some novel ini­tia­tives un­der­taken by some of the mi­cro­fi­nance in­sti­tu­tions seemed to find a way out to ad­dress the chal­lenge. They started ap­point­ing lo­cal youths as agents (com­monly known as ‘ band­hus’) who served as a quasi ‘doorstep bank­ing ser­vice rep­re­sen­ta­tives’ for the ru­ral and un­banked pop­u­la­tions. How­ever even this model was fraught with its own set of chal­lenges.

Key Chal­lenges

The key chal­lenges were to keep the trans­ac­tions costs low and im­me­di­ate and se­cure rec­on­cil­i­a­tion of ac­counts with the core bank­ing net­work. A phys­i­cal rec­on­cil­i­a­tion of ac­counts is nec­es­sary, since ru­ral bank­ing in­volved a huge amount of pa­per­work, in­ef­fi­cient pro­cesses, a great deal of la­tency, and man­ag­ing the lo­gis­tics of a large hu­man net­work that is used to reach out to the ru­ral pop­u­la­tion. This adds up to huge cost over­heads that are con­se­quently passed on to the end consumer and de­feated the ba­sic premise of fi­nan­cial in­clu­sion.

Clearly, the an­swer of all these chal­lenges lies in adop­tion of the right kind of tech­nol­ogy that en­ables peo­ple to re­motely un­der­take se­cure trans­ac­tions that im­me­di­ately rec­on­ciles with the core bank­ing net­work.

In­tro­duc­tion of Ma­chine to Ma­chine (M2M) Elec­tronic Point of Sale (EPOS) to en­able se­cure wire­less trans­ac­tions should be the an­swer to such a hu­mungous chal­lenge. Hence ru­ral In­dia needs ro­bust hand­held ter­mi­nals that have highly se­cure in­te­grated wire­less mod­ules, which en­able the ter­mi­nals to in­ter­act with the core bank­ing net­work us­ing the cur­rent GSM/GPRS cel­lu­lar net­works and also func­tion in all types of weather con­di­tions. The wire­less mod­ules that are re­quired for bank­ing should be more ro­bust and able to have bi-di­rec­tional speeds nec­es­sary to sup­port a large num­ber of trans­ac­tions.

Ad­van­tages of Wire­less Tech­nol­ogy

Wire­less tech­nol­ogy sig­nif­i­cantly re­duces pa­per­work, saves time, and en­ables

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field agents to con­cen­trate on profit and other ac­tiv­i­ties as­so­ci­ated with mi­crobank­ing and mi­cro-in­sur­ance op­er­a­tions. The use of wire­less is not just re­stricted to EPOS hand­held ter­mi­nals, it’s also be­ing used to con­nect ATMS, which can be used to in­crease pen­e­tra­tion of bank­ing ser­vices in re­mote ar­eas. Wire­less tech­nol­ogy en­abled ATMS of­fer de­ploy­ment flex­i­bil­ity as they do not have to rely on a cop­per based in­fra­struc­ture. Cel­lu­lar en­abled ATMS can be placed wher­ever net­work cov­er­age ex­ists. This is of par­tic­u­lar use to those peo­ple who do not nec­es­sar­ily live within a rea­son­ably close dis­tance to the near­est town with bank­ing fa­cil­i­ties.

An­other ma­jor ad­van­tage of de­ploy­ing a cel­lu­lar en­abled ATM is safety and in­tro­duc­tion of re­mote mon­i­tor­ing ca­pa­bil­i­ties. Also, wire­less con­nec­tiv­ity can also be used to mon­i­tor trans­ac­tions that are sur­rep­ti­tious or ir­reg­u­lar in na­ture and flag the sys­tem, which will help the au­thor­i­ties to take timely cor­rec­tive mea­sures.

Si­mul­ta­ne­ously, the ATM screens can dou­ble up as a dig­i­tal sig­nage kiosk in ru­ral ar­eas and de­liver so­cial mes­sages on their screens. This way, peo­ple in the ru­ral ar­eas can be made aware of key is­sues that are im­por­tant to their liveli­hood. The author is coun­try man­ager, Telit Com­mu­ni­ca­tions S.P.A In­dia


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