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Financial
InclusionStandardization
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Financial Exclusion
There are several definitions for FinancialExclusion(perhaps we need a standard even for
that) Financial Exclusion may be defined as
inability to access mainstream financialservices
Bank accounts
Low cost loans
lack of reliable financial advice
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Financial Needs
access to safe, easy andaffordable credit and other
financial services
for
economic growth, reducingincome disparities and reducing
poverty
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Supportive FinancialServices
Source : RBI
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Progress in FinancialInclusion
Accounts with Institutions (2007)(SCBs, RRBs, Primary Agri. Co-op Societies, Urban Co-opBanks, Self-help Groups)
Savings Accounts 610.20 million (82/100
adults)
Credit accounts 187.10 million (25/100adults)
No-Frills accounts (Mar 2008) 15.83millions
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Challenges!
Enrollment of large numbers
Wide geographic spread
High maintenance costs for accounts
Small ticket size of transaction Illiteracy and use of vernacular
Product & service pricing
Trust and acceptance
Lack of electricity
Poor telecommunications
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Salient Features of our RFP
Proven Technology
Scalable and interoperable system
Contact or Contactless smartcards Fingerprint image acquisition as per
RBI norms
End-to-end Solution (technology andbanking services)
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Technical Specifications -RFP
Smartcard
ISO 14443 / ISO 7816
Standard dimension PVC / PolycarbonateCard
DES/3DES (key length 1024/2048)
EMV Compliant
32 K EEPROM memory
Hold User Certificates, Smartcard OS,Applications, etc
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Technical Specification - RFP
Handheld devices
Integrated system or 2/3 components
ISO 14443 / ISO 7816 and ISO 18092 for read
and write operations Built-in PKI support
EMV Compliant
Multilingual support
Online & Offline capability
Secured storage and communication
Long hours of battery support
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Technical Specifications -RFP
Fingerprint Scanner
Image acquisition at setting level 31 of ISO/IEC 19794-4
Contact area 1 x 1 sq.inch
Min. capture-size 13mm wide x 17 mm high
Pixel density 500 ppi with + 5 ppi
Pixel depth 8 bits
200 grey levels (dynamic range of scanned image)
Sense live-scan plain finger impression
Strong anti-spoofing features
Protection from ambient light, residual images Standard for Data-Interchange - ANSI-378
Encrypt fingerprint minutiae with 3 DES
Scanner surface to be resistant to dust, humidity, shocks,electronic discharge, ambient light, extreme temperatures, etc
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Responses to RFP
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Pros and Cons of someTechnologies
- Source RBI
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Pros and Cons of someTechnologies
- Source RBI
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Smart
Card
Smart
Card
Reader
POSTermina
l
Printer
Biometr
icscanner
Financial
Switch
Backend
Banking
Server
ISO 7816-4 /
ISO14443-4
ISO19794
ISO8583
GSM/GPRS/PSTN/LEASED LINE/
INTERNET
FRONTEND SYSTEMS CONNECTIVITY BACKEND SYSTEMS
Architecture suggested byGovt. of AP
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By introducingstandardization in
financial inclusion weaim to Establish,maintain and pursueadoption of standards soas to enable an open andinteroperable
infrastructure for smartcards, devices andsystems that simplifiesdevelopment,deployment andmanagement ofapplications across
industries
Objective
Standardization
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Interoperability flexibility and freedom of choice
Ability of one application to communicateseamlessly with another
Ability to mix and match various
components from one vendor with those ofanother
Ability to interact between oneorganisation and another
Ability to transact between different usersthat do not use same technology
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Standardization in Applications
Developing Generic Interface for Enrollment for use of Business Agent
Customer
Bank Officer
End-to-end Transaction handling Application on handheld smart device
Application on Switching/Intermediate server Backend Banking software (business logic).
Card Management Software
Interfaces/integration with existing Core-Banking software.
Card Management Software Generic to any Smartcard Type
Generic Card Personalization
Lifecycle management of different card types
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Standardization in Transaction
ISO 8583 Standard for transaction request and response between HHTand Intermediate server
Cardholder-originated transactions include withdrawal, deposit, refund,reversal, balance inquiry, payments and inter-account transfers.Reconciliation of transactions of BC account and customer account
Standards for checking the validity of the card in HHT and routing oftransaction from Intermediate server to other bank server
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Standardization in Security
Enrollment station
Security of data stored on the system Secured mode of data transmission to server
Hand Held Terminal
Authentication of business correspondent & Customer
Standards for Fingerprint scanning / threshold of match forauthentication of customer
Secure transfer of Data between HHT and smartcard
Secure interaction between HHT and Intermediate Server
Intermediate server
Security of data
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Technology Standardization aspects ofTechnology Standardization aspects of
Smart cardSmart cardParameter Contact Contact-less
Interface Physical Electrical Contact RF (13.56MHz)
Standard ISO 7816 ISO 14443 A
Deployment (approx) 3 Bn (mature, single digit growth) 1.5 Bn growing at 25-30% CAGR
Applications GSM SIM, EMV Dual Interface cards Ticketing, Id cards, e-passports, loyalty & e-purse, VISAWave, Master card Pay pass cards
Security Can support DES / 3 DES / AES / PKI Can support Dual Authentication / 3 pass authentication /DES / 3 DES / AES / PKI
External Authentication Can support Biometrics Can Support Biometrics
Memory
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Standardization of Integrated Hand HeldStandardization of Integrated Hand HeldTerminalTerminal
LCD display
Keypad
Optical Biometric Finger print sensor
ISO/IEC 19794-4
Contactless Smart Card reader with Mifare, DESFire,
JACOP, SCOSTA
Thermal printer
Speaker
Connectivity (GPRS/CDMA)
Support Offline/Online transactions
Improved operational efficiency, reliability and better logistics.
Eliminates challenges in identification of defects in multiple
devices.
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Deployment channel -1Card Many Applications
The smart cards can be used for various purpose like Financial inclusion,Merchant Establishments, Government initiatives like Pension, NREGS
disbursement, ATMs, Shopping Malls etc.
ATMs Financial Inclusion
Merchant Establishments
Pension Disbursement
Shopping MallsNREGP Disbursement
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Achieving Synergies - Integration
Technology Providers
Service Providers
Chip Manufacturers
Card Manufacturers
Device Manufacturers Software companies
Application Developers
Systems Integrators
Banking Channels
Smart Phone
ATM
Point of Sale Termnial Personal Computer
Telephone
Mobile phone
Set-top Boxes Kiosks
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Contact details:
N. BHARATH BHUSHAN REDDYDEPUTY GENERAL MANAGER
DEPT. OF INFORMATION TECHNOLOGY
ANDHRA BANK, HEAD OFFICE,
HYDERABAD
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