BANKING 8

REPORT

TECHNOLOGY FOR FINANCIAL

INCLUSION
INTRODUCTION

Financial inclusion refers to efforts to make financial products and services

accessible and affordable to all individuals and businesses, regardless of their
personal net worth or company size. Financial inclusion strives to remove the
barriers that exclude people from participating in the financial sector and using
these services to improve their lives. It is also called inclusive finance.Financial
access facilitates day-to-day living, and helps families and businesses plan for
everything from long-term goals to unexpected emergencies.
In a country where the vast majority of population is still very poor, financial
inclusion is of great significance. For the poor, access to finance and ensuring
the optimum utilisation of the resources they possess is a major challenge.
Economic and societal uncertainties mean volatility in their income can have an
adverse effect on the financial stability.
 One of the biggest components of financial inclusion is financial literacy. No
matter how many banks you open and how many boots you have on the ground,
if a person does not know about the financial options that are open to him,
policies/schemes and financial instruments will mean little. The digital economy
can be strongly leveraged to spread financial literacy. 

INCLUSION THROUGH TECHNOLOGY HELPS

 CONNECTION MORE PEOPLE

The popularity of mobile phones supported by availability of affordable
smartphones, and faster and more reliable networks, has fueled the
unprecedented growth of Internet user base.
 BUILDING FINANCIAL IDENTITIES USING ALTERNATIVE DATA
Advances in next-generation technologies like Artificial Intelligence, machine
learning, data-science, and predictive analytics allow companies to challenge
the status quo. These technologies help analyze thousands of traditional and
non-traditional data signals to provide a robust alternative to traditional credit
scoring and risk assessment.
 ROLE OF TECHNOLOGY FOR FINANCIAL INCLUSION

1. Among the key constraints cited world over in achieving significant

financial inclusion is the cost of servicing small value and unprofitable
customer segments or providing credit facilities to those with irregular
income history.
2. The combination of technologies minimises the need for setting up
physical branches at all locations with trained persons to man them
3. The combination of IT and mobile telephony along with other IT –
enabled services has emerged as a viable solution for greater financial
inclusion.
4. It allows the servicing banks to improve efficiency and provides for use
of multiple channels to work together as an inter-connected system.
5. Providing branchless banking services through mobile phones helps
banks access with lower investment.