1. TECHNOLOGY FOR FINANCIAL INCLUSION
N D RAO
Indian Institute of Banking & Finance
JAIPUR
16 DEC 08

2. TECHNOLOGY FOR FINANCIAL INCLUSION
Why do we need to talk about it
Extremely large target population
Current Banking systems service merely 33% of total population
Customer profile different
Very low Literacy levels and Awareness
Business Processes need re-engineering
Existing processes can not produce desired results
Independent Delivery Agencies
Deployment of Business Correspondents/ Facilitators
Latest trends in Technology
Cost-effective state-of-the-art technologies are available today

3. TECHNOLOGY FOR FINANCIAL INCLUSION
Profile 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

4. TECHNOLOGY FOR FINANCIAL INCLUSION
Financial Inclusion Processes
CUSTOMER ACQUISITION
Identification
Enrolment
Account Opening
BANKING TRANSACTIONS
Cash Deposit
Cash Withdrawal
Government Benefits/ Payments
Transfers
Remittances
Micro Finance
NON-BANKING TRANSACTIONS
Micro Insurance
Investments
Value-added Services

5. TECHNOLOGY FOR FINANCIAL INCLUSION
Card Based Identification
Why Cards?
Choice of Cards
Magstripe Card
Contact Smart Card
Contactless Smart Card
Plain PVC Card
Plain Laminated Card

6. TECHNOLOGY FOR FINANCIAL INCLUSION
Card 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

7. TECHNOLOGY FOR FINANCIAL INCLUSION
Card 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

8. TECHNOLOGY FOR FINANCIAL INCLUSION
Card 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 - 4K
Approximate Cost Rs125 - Rs200

9. TECHNOLOGY FOR FINANCIAL INCLUSION
Card Based Identification
PLAIN PVC CARD
PLAIN LAMINATED CARD
Plain Cards which can carry Customer Information, a photograph, hologram and a barcode if necessary
Approximate Cost Rs2 – Rs10

10. TECHNOLOGY FOR FINANCIAL INCLUSION
Authentication
USER/ CUSTOMER AUTHENTICATION
WRITTEN AUTHORIZATION
Signature/ Thumb impression
PIN BASED AUTHORIZATION
What you have - What you know
BIOMETRIC AUTHORIZATION
Fingerprint/ Iris/ Voiceprint

11. TECHNOLOGY FOR FINANCIAL INCLUSION
THE RIGHT CHOICE
OPERATIONAL CONSIDERATIONS
COST CONSIDERATIONS
REGULATORY CONSIDERATIONS
USE SMART CARDS OR CARDS SMARTLY?

12. TECHNOLOGY FOR FINANCIAL INCLUSION
CONNECTIVITY ISSUES
OFF-LINE/ ON-LINE/ REALTIME
INTEGRATION WITH BANK SYSTEMS
INTERNET/ V-SAT/ MOBILE COMMUNICATION
LAST MILE CONNECTIVITY - GROUND REALITIES

13. A simple Handheld device
TECHNOLOGY FOR FINANCIAL INCLUSION
HANDHELD DEVICES
A simple Handheld device

14. A Handheld device with Value-added Services
TECHNOLOGY FOR FINANCIAL INCLUSION
HANDHELD DEVICES
A Handheld device with Value-added Services

15. TECHNOLOGY FOR FINANCIAL INCLUSION
INNOVATIONS
MOBILE TECHNOLOGY
2-D BARCODES
BIOMETRIC LOW COST ATM
SUPPLY CHAIN SYSTEMS

16. TECHNOLOGY FOR FINANCIAL INCLUSION
LOW-COST ATM

17. TECHNOLOGY FOR FINANCIAL INCLUSION
A Typical Architecture

18. TECHNOLOGY FOR FINANCIAL INCLUSION
QUESTIONS