Technology can play a big role in financial inclusion plans

According to RBI, one-third of the districts in India are in need of financial inclusion support. Speaking to Ritwik Mukherjee, Hanuman Tripathi, group MD of Infrasoft Technologies, explains how technology can help rural and cooperative banks realise financial inclusion dreams. Excerpts:

n RBI has been saying rural and cooperative banks should play a larger role at a grassroots level to achieve the goal of financial inclusion. What are the technology needs of these SME banks and MFIs?
So far, the SME bank sector has been working in a branched banking mode. Business being managed by agents in remote areas can give tremendous boost to financial inclusion and will provide expansion to the co-operative banks.
This will require a secured mobile banking technology that will give flexibility to the agents in terms of mobility and assuarance to the bank that transactions will get online. Further, the business correspondent mo­del is extremely useful for SMEs to safely conduct business in remote areas.
From software technology and delivery point of view, a hosted or software-as-a-service (SaaS) model keeps the IT operations lean and operational and capital expenditure required to set up own infrastructure low.

n How would adoption of technology foster financial inclusion?
Use of mobile banking, cash machines, kiosks, smart cards and any other wireless device that can deliver banking services or supply chain integration can help. India has over 500 million mobile connections.
But out of this, as per RBI reports, 46 per cent of the consumers do not have bank accounts. This tells one about the potential for new models of delivering banking services on mobile.
Specifically for MFIs and banks that employ agents on the field (branchless banking or the correspondent model), wireless devices are playing a big role. These solutions provide security such as biometric identification and provide transparency using audio-based confirmation of transactions. These devices are capable of real-time capabilities, which means they not only work when connected to network, but in offline modes.
It is by using the security and transparency/safety features of the solutions that the financially illiterate will use banking services without fear. Additionally, these modes economise operational costs and increase outreach.

n What are on offer from Infrasoft stable?
For the MFI sector, InfrasoftTech offers OMNIEnterprise Microfinance Solution, a platform that automates core business pro-cesses of a financial inclusion enterprise. It is highly recommended for MFIs wishing to expand rapidly in multiple geographies without substantially increasing operating costs. For cooperative banks, we offer Core Banking Solutions. We have enabled over 90 cooperative banks on end-to-end core banking platform with this product. Our eChannel integrator enables banks working on CBS to reduce cost per transaction. The internationally acclaimed Anti Money Laundering solution is now being packaged to meet KYC risk mangement at a lower cost. We are also carving out a Loans Origination Solution at lower cost for the benefit of smaller banks and MFIs.