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An article relating to this blog post on Finextra:

FIS opens Indian financial inclusion lab

Fintech giant FIS has opened a financial inclusion lab in the Indian city of Bengaluru (Bangalore) that will work on developing ways to bring banking to the country's millions of underserved citizens.


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Digital Inclusion: The Need of The Hour

Way back in 1955, All India Rural Credit Survey Committee recommended availability of institutional credit to the unbanked people in the country. The outcome was State Bank of India. We are in 2015. Much water has flown under the bridge since, yet there is a gap in availability of  banking services to the masses in towns, villages and in remote habitats. Financial inclusion (FI) as a concept is retelling the story. This time around with technology backbone, it is bound to suceed.  

In this context, FISs initiative is to be lauded. The government has already given the necessary fillip offering the scope and objective for FIS. The first is releasing the licenses for Payments bank; soon to follow will be 'Small Banks'. The business model is oriented towards, what is referred to as 'Banking Correspondents' (BC) and 'Digital channels' (DC). BCs are individuals carrying banking services to the doorstep of the customers. They carry a convenient handheld device. The transactions are made using the device that stores infomation and a customer is authenticated by biometric as one factor. That in itself is disruptive of the current brick and mortar structure. It is very well known a large population find it intimidating to walk into a bank branch for several reasons. If India will have to extend banking services FI is the only avenue . 

FIS has to fast track this initiative to be relevant. Lest they miss the bus. They have and will continue to have competition, more on pricing, robustness of devices and the bandwidth that the devices will require to operate remotely. Given that FIS has a corebanking product that can be offered on cloud, this in conjunction with FI will be the exact answer for banking outreach. If this succeeds, there will be no stopping FIS in India.  

Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 25 August, 2015, 16:21Be the first to give this comment the thumbs up 0 likes

After I wrote Calling B.S On Banking The Unbanked, the GoI launched a program to issue zero balance bank accounts through an abbreviated process. While the program succeeded in opening 100M+ new accounts, over 70% had no money in them. The GoI then launched life and health insurance plans with cut rate premiums that had to be direct-debited from the bank accounts, thereby hoping that people would keep at least that much money in their accounts. Now we're hearing that payments banks would promote financial inclusion. Plan after plan with no end in sight, I sometimes wonder if we should spend more time and energy to find ways ways to achieve the more important goal of putting enough money in the hands of the supposedly-unbanked segments of the population.

Clive Munn
Clive Munn - MFTSE Affairs S.A. - Luxembourg 26 August, 2015, 07:47Be the first to give this comment the thumbs up 0 likes

I could not agree more. I think we need to persuade governments that this can be done. Perhaps through microfinance we could leverage up an initial blocked deposit (grant) with a form of credit interest to demonstrate how a small investment can grow while providing the depositor with other services such as payments etc.

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