Is there really a solution for India’s struggle with financial inclusion?

At heart, Financial Inclusion is a very novel idea. Giving access to banking facilities and services to help uplift the masses and keep away from poverty. However, despite the obvious benefits and huge technological advances, around 2 billion people across the world remain unserved by formal banking ecosystem (World Economic Forum report, 2014). However, hurdles remain. Among the issues, levels of financial literacy, lack of formal documentation, reliability of the existing platform and affordability, social and infrastructure reach and coverage are some reasons for this lag. In recent years, there is significant progress in addressing these and both the Government and private sector are creating the infrastructure and reach.

There’s a lot to observe in India’s push for Financial Inclusion, however a meaningful financial inclusion goes beyond a simple bank account, verification of ID, and a cell phone. The absence of basic education keeps the rural masses ignorant about the services as well as their rights and responsibilities. This poses a challenge in adoption of technology as well. It is heartening that the Fintech landscape seems to be readying for this. In this jigsaw, localization and venularization hold the key.

The Language Barrier

There is a need to simplify the terms and jargon used by bankers, Financial Planners, Mutual Fund distributors. Technical speak such as Exit Load, NAV, paid up value, AMB etc leave the non-savvy customers rattled and keeps them away from availing these facilities. This also leads to dependency on the intermediary and possibility of being mis-informed or mis-guided. Various regulatory bodies are pushing the players in their respective domains to up the vernacular quotient and this has resulted in increase in the savings, insurance and investment base in the country.

The reality is that those not comfortable with English as a language, have an uphill battle in understanding financial jargon and face difficulties in performing basic transactions on their own. The policy makers need to step in and make efforts to bridge the gap. According to media reports, Kannada Development Authority (KDA) solicited the regional heads of all nationalized, rural and scheduled banks and asked them to make Kannada language mandatory for all staff.(*Source: Business Standard)

The scenario for internet usage is not very different. A joint report by KPMG and Google “Indian Languages – Defining India’s Internet,” stated that the total share of Indian language-based internet users accessing digital payments is expected to increase from 28% to 43% by 2021. This means that that the current English-only platforms will be inadequate to cater to these users, there is an urgent need for vernacular Fintech platforms. (*Source: Business Standard)

The need of the hour is to tide the language barrier in order to make financial inclusion a reality.Many successful attempts exist today in the domain of shopping, entertainment etc. While efforts have been made in the financial domain as well, there is still a large gap. By offering services in vernacular, these platforms will build a huge connect with the Bharat and contribute to a true financial inclusion revolution.

Fincare Small Finance Bank Ltd – a Scheduled Commercial Bank, offers services such as cash denomination of choice at all ATMs, UPI-enabled transactions, WhatsApp banking, mobile banking in 11 languages, ATM and Toll-Free Call Center in 7 languages, Internet Banking in two language options viz. English and Hindi. All these services are aimed at providing a ‘Smart’ banking experience to customers and fostering true financial inclusion in India.

Digitization in Banking – All About Customer experience and engagement

Introduction:

Digitization is forcing organizations to re-design their business models and adapt to the new paradigms. The most interesting fact about this is, that this shift is being driven by customer experience.

The DNA of Customer-centricity

Today, CX drives SX – that’s “Customer Centricity driving Strategy” for the uninitiated!

In the more recent times, customer preference has found a new expression – the digital channel! So, right from the choice of device, choice of channel, the type of operating system, the navigation pattern, the buttons clicked or not clicked, the type of transactions done or not done, the offer checked or dropped, transactions that went through or did not etc. reveals more about the customer needs, wants and preferences at the specific point in time and context, than your average customer service manager possibly could.

Businesses are clinging onto digital channels to ‘understand’ their customers from a whole new dimension and be able to deliver a banking experience, customized for each customer.

It is no coincidence that putting the customer first is already the tour de force of many an organizations’ journey to success.

The Banking Transformation!

Banking is changing rapidly, and so are the customers. A digital element is providing enormous opportunities for improving efficiency, enhancing experience and optimizing processes, thereby delivering convenience along with access, safety and speed.

Many the world’s biggest financial institutions have embraced technology and are continuously innovating in order to get ‘closer’ to the customers.

Rapid technological advances, availability round-the-clock, and digitalization is revolutionizing customer experience and guiding buying behaviour. Banks are racing to introduce further innovation in customer engagement through social media, customized apps, cross-channel partnerships and what not. Most of the banks today consider them as a fintech with a banking license and why not? With Digital and technology at the core of their products and offerings, omni-channel experience, these institutions are going after a larger share of the customer’s wallet. Good news for the customer? Most certainly! In return, customers can expect absolutely bespoke offerings, doorstep/self-service, a wider choice of products, lower cost of acquisition, offers and rewards, and an experience as cathartic and at par with shopping.

The challenge

A key challenge for banks is dealing with the levels of digital literacy and experience in handling financial transactions through digital channels. However, this is changing fast as our digital ecosystem is evolving. As per reports, in Q3 FY-20, the total volume of UPI transactions was 2.7 Billion and in terms of value, UPI clocked INR 4.6 Trillion, up 189% from Q3 FY 2019.

Capgemini’s World Retail Banking Report 2018 found that majority of the banks still need to improve customers experience and sharpen their capacity to remain relevant. Most Banks understand that and are making a significant investment in many areas of digital, including User Experience (UX) of their applications to make them more intuitive and easier to navigate.

The significance of digital channels rises significantly when it comes to Gen-Y and tech-savvy customers. Banks need to understand that customers expect a simple and seamless digital experience and, if banks fail to provide it, they may well lose these customers to a digital disruptor. Albeit, banks are moving from brick-and-mortar to digital, a branch/brick and mortar unit remains a necessary evil – firstly, as a point of contact when required and secondly, as a representation of being trustworthy and not a fly-by-night operator!

Banks should focus on the right physical and digital mix

Improving the customer journey and investing in technology

The way in which banks build and maintain customer relationships is evolving. With the current wave of digital disruption, with competition not only from banks but other service providers, banks need to adapt to the changes rapidly and build an internal culture of ‘making banking smarter through customer engagement and experience’.

Trust, technology and transparency are levers available to a service provider in order to build a lifetime of customer relationship.

In the technology domain, Artificial Intelligence and Advanced Analytics are powering banks to understand clients better, there are Chatbots that are aiding in customer support and handling transactions, money transfer, suggestions on products and services.

Of course, technology is an enabler and banks still need to apply technology, all it can, in order to deliver a befitting value proposition to its customers. Money can buy the technology but having a satisfied and repeat customer takes much more!

Conclusion In the future, ‘Banks’ will go fast but ‘Banking’ will, ahem, grow-fast! The financial services sector, especially banking, has a phenomenal opportunity to redefine banking and build a lifetime of customer relationships over the lifecycle of customer needs! Digital is a transformative way of banking and banks need to adapt and adopt digital or be left out of the circle of relevance of the customer in the future.

Smart Habits-How to inculcate savings habit!

Do you often find yourself wondering were all your money is spent and you don’t have enough savings in your bank account?

Don’t worry you are not alone!

In this era were impulsiveness rule our mind, making calculated long-term decisions often take a back seat. Especially when it comes to saving money. 

Though in today’s fast paced world, were all the information is available at our fingertips, most of us get lost in the ocean of information available. We think we are in control but reality strikes at some point or another, and unfortunately for many it’s too late.

This can be controlled by contributing/investing small sum’s, which won’t hamper you significantly, rather will be helpful. There are numerous ways by which you can save efficiently. Choose a risk free and monthly payment investment options to start with for Example, recurring Deposit.

Recurring deposits are the ideal solution to get into the habit of savings, along with earning decent, risk-free and guaranteed returns. A recurring deposit is an investment which promises of the safety of principal and adequate return

Let’s understand further on the benefits of taking the Recurring deposit route.

Recurring deposit (RD) is a type of term deposit offered by banks through which a fixed sum can be deposited periodically. This is one of the exceptionally popular and risk-free investment opportunities for investors.

Every major bank in the country offers an alternative to open a recurring deposit account with different tenure options and providing people with the opportunity to pick a term according to their prerequisites. Attractive interest rates help investors to earn good interest on maturity.

Why it’s Smart to invest in recurring deposits!

  • Inculcates a savings habit

As rightly said by Warren Buffett – “Do not save what is left after spending; instead spend what is left after saving” Recurring deposits can generally help to inculcate a regular habit of savings among the new investors with low-risk appetite. The Interest earned is fixed. Investors can decide a premium that they want to invest and choose the tenure accordingly. This not only helps to save money but also develops a habit of saving it.

“Savings, remember, is the prerequisite of investment.” 

  • Simple documentation

The documentation required for opening a recurring deposit account is quite simple to arrange. Most banks offer an online platform to the investor’s book recurring deposit with their linked accounts. Generally, when the savings account is opened, no further documentation is required. This is the least complex and most problem-free approach to save money and earn guaranteed interest.

  • Safe and guaranteed return option

One of the attractive features is that interest rate, when decided, does not change during the tenure of the investment. On maturity, the investor will get a lump sum amount, which incorporates the monthly instalments and the interest earned on the equivalent.

  • Premature withdrawal option

The Interest earned is fixed and banks by and large don’t permit untimely and mid-term withdrawals. In any case, if the investor demands, the bank may enable one to close the account before maturity, with a penalty charge.

Hence, while investing in a recurring deposit account, select a bank which offers a high rate of interest and charges a low penalty on premature withdrawal. The RD interest rate in India can fluctuate from bank to bank and relies on the kind of scheme chosen, the tenure of deposit, and the monthly deposit amount. Also, some banks may offer high-interest rates for senior citizens and women.

Fincare Small Finance Bank, always encourages innovative ideas to save money and to start with Recurring Deposit is the ideal alterative for Individuals who do not have a sum of money to invest in a fixed deposit but can afford small portion of investment amount from income every month can opt for a recurring deposit instead of a fixed deposit.So, get ready to stay ahead of the curve and save smartly!