January 14

AI Can Do a Lot for Financial Services Penetration in the Hinterlands in India

By Kushankur Day

Branchless banking, either through agent or mobile route, is claimed to be instrumental in driving financial inclusion. Safaricom’s M-PESA (a subsidiary of Vodafone) in Kenya unleashed the utility of agent or mobile banking in 2007–08. A similar sort of business model has been adopted by many developing and least-developed countries. India is no exception.

As per Micro Save 2019, mobile banking penetration—recorded in terms of the number of transactions—was 513 million followed by agent banking, and bank ATMs (80 million) and bank branches (28 million) between 2005–18.

The departure from a ‘brick-and-mortar’ structure to branchless banking (agent & mobile) can be attributed to ICT adoption by users. This has led to a structural and technical reform in the financial services landscape in the last decade—by partnering the mobile network operators with financial services providers—which has allowed adoption of low-cost solutions to deliver a slew of financial services to the unbanked.

Photo courtesy of Simone McCourtie.

Source: Financial Express (link opens in a new window)

Finance, Technology
artificial intelligence, financial inclusion