When Technology Meets The World Of Financial Inclusion

by Vamsi Krishna Ithamraju, Group IT Head, CreditAccess Asia

The focus on achieving “IDENTITY-VERIFIED CLEINT ACQUISITION FOLLWED BY A REAL-TIME CHECK ON CREDIT WORTHINESS AND IN­STANT CASHLESS LOAN DISBUR­SAL” has been increasingly growing in general across the ASEAN region and some of our South-Asian counter parts where the socio-technological ecosystem is very different from INDIA.

So what exactly is the INDIA ecosystem that makes it so different and enviably attractive to emulate for its neighbours in the region?

First, The INDIA scenario of AADHAR authentica­tion and integration with CREDIT BUEREAUS and PAYMENT BANKS has made the last mile agility a realized goal for many organizations in the gamut of small finance banking, micro-credit and MSME lending including Bharat Financial Inclusion Ltd, one of the first publicly listed companies.

While there are efforts which need gov­ernments’ and regulatory intervention in the ASEAN region (such as a National ID mandate), biometrics as a technology can indeed make a big difference in tapping the full potential of a potential 150 mil­lion unbanked households and small entrepreneurs if it solves three basic challenges of ensuring that -

1. The customer receiving the credit and making a loan payment is indeed the one he/she claim to be and he/she is always the same physical person at any subsequent transaction

2. Any contact/transaction with a customer gets validated for sanctity

3. Employees with access to sensi­tive/confidential KYC information, payment procedures, etc. are indeed the ones corresponding to the password tokens used

The last decade has exposed many solution pieces (such as finger print scanners, retina scan­ners, biometric card based systems) which some­how couldn’t quite complete the customer expe­rience puzzle that the AADHAR UID project in India solved meticulously. This was made possible by a combination of technology and the thrust from the Indian government.

The biometric technologies and the IT infrastruc­ture underneath worked well in rural disconnected envi­ronments, however only when equally complemented by an extensive canvas of professional leadership, strong backing from the government and the regulatory bod­ies.

It is therefore high time that state-of-art tech­nologies emerge to not only tap the ASEAN financial markets(particularly the likes of Indonesia, Philippines, Sri Lanka, Vietnam) but also to fit better the macro needs of the governments and the large financially excluded population of these fast emerg­ing economies.

Mobile and card-based ID solu­tions (such as the RFID and NFC) when cross leveraged with GPS and map based tools can be effective tools to validate the personal identi­ties in outdoor/non-connected areas hence making them an interesting space to watch out for small banks, MFIs and anyone operating in the ASEAN financial inclusion domain.