NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, June 24, 2015

We live in exciting times. We can now open bank accounts online, transfer funds from one account to another in just a few clicks and buy things off the internet in a matter of minutes. The banking industry has undergone a digital transformation and customers are feeling empowered like never before.

A little crystal gazing will tell us that it is only going to better from here. A PwC report titled ‘Banks taking a quantum leap through digital’ says that by 2020, digital natives will form a majority segment of customers and force organizations to adapt to changing customer needs.

Despite all these advances in banking, financial inclusion remains a challenge, especially in developing economies such as India. And digitization is an important tool towards addressing this challenge. As digital frontiers expand, banks will be able to deliver highly customized services at relatively low costs and expand their customer base by reaching people who were until now outside the banking ecosystem. In other words, the spread of digitization and the Internet of Everything will accelerate the process of financial inclusion.