Why More Smartphones and Bank Accounts Haven’t Brought Financial Digital Inclusion in India
By Malavika Raghavan
Technology and finance have been old bedfellows. The financial sector in India has been a gung-ho adopter of technology, using it to improve interactions between financial institutions and consumers. In the last 25 years, we have witnessed rapid digitisation of the ‘back-end’ of finance in India — our core banking system (the RBI’s e-Kuber), state-of-the-art digital payment systems like the RTGS, NEFT and IMPS, security depository systems like NSDL and KYC systems such as CERSAI and e-KYC.
In many ways, the last decade has been the story of the heady adoption of technology by government and private sector on the hope that it will enable better service delivery to people.
Has this digitisation translated at the consumer ‘front-end’ of finance? Consider that 10 years ago, smartphones were just beginning to become a reality, ownership of bank accounts was not universal in India, Aadhaar enrolments had not begun, and the related e-KYC infrastructure did not exist. It begs the question: how has digitisation changed the experience of finance for low-income Indians on the ground?
Photo courtesy of juicyrai.