JAIPUR16 DEC 08

TECHNOLOGY FOR FINANCIAL INCLUSION

Indian Institute of Banking & Finance

N D RAO

TECHNOLOGY FOR FINANCIAL INCLUSIONWhy do we need to talk about it

Extremely large target populationCurrent Banking systems service merely 33% of total population

Customer profile differentVery low Literacy levels and Awareness

Business Processes need re-engineeringExisting processes can not produce desired results

Independent Delivery AgenciesDeployment of Business Correspondents/ Facilitators

Latest trends in TechnologyCost-effective state-of-the-art technologies are available today

TECHNOLOGY FOR FINANCIAL INCLUSIONProfile of Financial Inclusion Technology

Capture Customer details and facilitate Unique Identification

Provide non-repudiable and user-friendly authentication mechanism

Ensure reliable connectivity upto the last mile

Offer Financial products tailored for the target group

Support comprehensive Credit Information System

Support use of multimedia and innovative User Interfaces

Work in rural environmental conditions

Low Capital and Maintenance costs

TECHNOLOGY FOR FINANCIAL INCLUSIONFinancial Inclusion Processes

CUSTOMER ACQUISITIONIdentificationEnrolmentAccount Opening

BANKING TRANSACTIONSCash DepositCash WithdrawalGovernment Benefits/ PaymentsTransfersRemittancesMicro Finance

NON-BANKING TRANSACTIONSMicro InsuranceInvestmentsValue-added Services

TECHNOLOGY FOR FINANCIAL INCLUSIONCard Based Identification

Why Cards?

Choice of Cards

Magstripe Card

Contact Smart Card

Contactless Smart Card

Plain PVC Card

Plain Laminated Card

TECHNOLOGY FOR FINANCIAL INCLUSIONCard Based Identification

MAGSTRIPE CARD

Data laid out on a magnetic strip at the back of the card in three tracks. A magnetic stripe card may have any of these tracks, or a combination of these tracks. Track 3 is used for financial transactions. ISO Standards are used for encoding the data in the tracks.

Approximate Cost Rs10 - Rs15

TECHNOLOGY FOR FINANCIAL INCLUSIONCard Based Identification

CONTACT SMART CARD

Smart Cards have embedded microprocessor in a contact area, comprising several gold-plated contact pads, which can store and process data. They can receive input which is processed — by way of the ICC applications — and delivered as an output. Capacity: 8K – 64K

Approximate Cost Rs75 - Rs120

TECHNOLOGY FOR FINANCIAL INCLUSIONCard Based Identification

CONTACTLESS SMART CARD

The chip communicates with the Card Reader through RFID (Radio Frequency Identification) induction technology. These cards contain an Antenna but not gold-plated contacts and require close proximity to the Reader to complete transactions. Capacity 1K - 4KApproximate Cost Rs125 - Rs200

TECHNOLOGY FOR FINANCIAL INCLUSIONCard Based Identification

PLAIN PVC CARDPLAIN LAMINATED CARD

Plain Cards which can carry Customer Information, a photograph, hologram and a barcode if necessary

Approximate Cost Rs2 – Rs10

TECHNOLOGY FOR FINANCIAL INCLUSIONAuthentication

USER/ CUSTOMER AUTHENTICATION

WRITTEN AUTHORIZATIONSignature/ Thumb impression

PIN BASED AUTHORIZATIONWhat you have - What you know

BIOMETRIC AUTHORIZATIONFingerprint/ Iris/ Voiceprint

TECHNOLOGY FOR FINANCIAL INCLUSIONTHE RIGHT CHOICE

OPERATIONAL CONSIDERATIONS

COST CONSIDERATIONS

REGULATORY CONSIDERATIONS

USE SMART CARDS OR CARDS SMARTLY?

TECHNOLOGY FOR FINANCIAL INCLUSIONCONNECTIVITY ISSUES

OFF-LINE/ ON-LINE/ REALTIME

INTEGRATION WITH BANK SYSTEMS

INTERNET/ V-SAT/ MOBILE COMMUNICATION

LAST MILE CONNECTIVITY - GROUND REALITIES

TECHNOLOGY FOR FINANCIAL INCLUSIONHANDHELD DEVICES

A simple Handheld device

TECHNOLOGY FOR FINANCIAL INCLUSIONHANDHELD DEVICES

A Handheld device with Value-added Services

TECHNOLOGY FOR FINANCIAL INCLUSIONINNOVATIONS

MOBILE TECHNOLOGY

2-D BARCODES

BIOMETRIC LOW COST ATM

SUPPLY CHAIN SYSTEMS

TECHNOLOGY FOR FINANCIAL INCLUSIONLOW-COST ATM

TECHNOLOGY FOR FINANCIAL INCLUSIONA Typical Architecture

TECHNOLOGY FOR FINANCIAL INCLUSION

QUESTIONS