Category: Digital Payment

India’s UPI Revolution Will Leave You Behind If You Don’t Act Now

November 19, 2024

In 2024, India’s Unified Payments Interface (UPI) recorded remarkable growth with a surge in transaction volume. This growth underscores the increasing shift towards digital payment solutions, reflecting not only advancements in mobile payment technologies but also changing consumer behaviours in India’s banking sector. But what’s fuelling this rapid adoption, and what might the future hold? UPI Revolutionises Digital Payment in India with Unprecedented Growth in 2024 The surge in UPI transactions in 2024 marks a pivotal moment in India’s digital payment evolution. With transaction volumes swelling, UPI has solidified its position as the backbone of India’s mobile payment infrastructure. This growth has been driven largely by UPI’s accessibility, allowing seamless transfers with just a bank account, mobile number, or QR code. Furthermore, this expansion is reconfiguring India’s online banking landscape, reducing dependency on cash and catalysing a nationwide shift to digital payments, especially in small businesses and among young users. Key Drivers Behind the Surge in UPI Transactions Several key drivers have catalysed this impressive rise in UPI transactions: Comparing UPI Growth Trends: What We Learned from 2023 Reflecting on 2023, UPI has already become a dominant force in India’s digital payment ecosystem. Monthly transactions routinely crossed billions, and the growth rate set high expectations for 2024. By analysing the 2023 trends, we saw how reliable access to mobile payments, collaborations between banks and digital platforms, and the prioritisation of user-friendly banking interfaces laid a solid foundation. This momentum has amplified in 2024, proving that strategic investments in digital banking and payments were instrumental in scaling the UPI user base even further. The Role of Government Initiatives in Boosting UPI Adoption Across India Government-backed initiatives have been instrumental in expanding UPI’s reach across India. Policies promoting cashless payments have encouraged widespread adoption, with a particular focus on banking inclusion for rural areas. Programmes like the Digital India initiative have played a pivotal role by facilitating necessary digital infrastructure and advocating the adoption of mobile payment systems. Additionally, the Reserve Bank of India’s regulatory support has enabled faster integration of UPI in various banking systems, driving more transactions and financial inclusion. Future Prospects: How UPI is Poised to Transform Banking and Transactions in India The future of UPI looks promising, with potential developments poised to revolutionise banking and digital transactions. Upcoming innovations, such as integrating UPI with international payment networks, could further extend its utility for cross-border transactions, a move that would reshape India’s digital payment landscape. Moreover, AI-driven insights may enhance security, making digital banking safer and more personalised. With UPI’s capacity to evolve alongside global standards, India’s digital payment ecosystem is set to become even more inclusive and adaptive to technological progress. Challenges Ahead: Ensuring Security and Accessibility in India’s UPI Ecosystem Despite its success, UPI faces challenges, especially in terms of security and accessibility. The vast volume of digital payments has attracted cybersecurity concerns, with fraud prevention becoming an urgent priority. Protecting user data and ensuring secure transactions will be essential to sustaining consumer trust. Moreover, while UPI has penetrated urban areas, rural accessibility remains limited. Bridging this gap through targeted government and banking initiatives will be crucial to fully realise UPI’s potential across India. Ensuring digital literacy and infrastructure in remote regions can strengthen the UPI ecosystem, enabling equitable access to secure mobile payment services. FAQs 1. Why Are Experts Saying 2024 Is the “Last Call” to Ride the UPI Wave Before It Evolves? UPI has seen unprecedented growth in 2024, transforming India’s digital payment landscape. With recent innovations like AI-driven security and potential cross-border capabilities, UPI is poised to evolve rapidly. Businesses and consumers adopting UPI now are gaining a competitive edge, but delaying could mean missing out as new features and competition reshape the ecosystem. Don’t miss the chance to be part of India’s digital payment revolution. 2. How has UPI transformed India’s digital payment ecosystem? UPI has revolutionised digital payments by offering secure, instant money transfers using mobile phones, QR codes, and digital wallets. Its integration with banks and support for small merchants has made it a cornerstone of India’s cashless economy, driving financial inclusion and reducing dependency on physical currency. 3. What role has the Indian government played in UPI’s growth? Government initiatives like Digital India and policies promoting cashless transactions have significantly boosted UPI adoption. Regulatory support from the Reserve Bank of India (RBI) has facilitated banking inclusion, particularly in rural areas, enabling UPI to become India’s preferred digital payment method. 4. What are the latest innovations in UPI technology in 2024? Recent innovations like UPI Lite, scheduled payments, and potential cross-border integrations have made transactions faster and more user-friendly. Upcoming advancements, including AI-driven fraud detection and personalised banking features, are expected to enhance security and convenience in the digital payment ecosystem. 5. What challenges does UPI face in ensuring secure and accessible digital payments? While UPI is a game-changer, challenges remain, including cybersecurity threats, fraud prevention, and limited penetration in rural areas. To ensure sustainability, efforts must strengthen security protocols, improve digital literacy, and expand infrastructure to bridge the urban-rural divide in mobile payment adoption.

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The Growth And Expansion Of KYC And KYP Within Digital Identity

May 20, 2022

The expansion of KYC and KYP is a major talking point within the perspective of digital identity today. Several global nations are embracing digital KYC models or e-KYC portals. They are using the same for authentication and verification of users in a secure format. Technologies such as DigiLocker, for instance, are changing mainstream engagement with KYC in most scenarios, filling up the gap in implementing complete digital identity and reliable verification/authentication of all citizens. It is also enabling remote authentication for transactions, services and so on. Expansion Of KYC- Mapping The Current Scenario The KYC full form is Know Your Customer while the KYP full form is Know Your Player. Reports estimate how several countries are taking the digital KYC route towards promoting higher inclusion and growth. A digital identity tackles the problem of people being excluded from development possibilities, new opportunities and services. Of course, there is still some apprehension about the risks of data misuse or fraud. Yet, experts believe that multi-factor authentication, intelligent designs and better background verification can lower these risks greatly for the long haul. One aspect seems non-negotiable- Countries are realizing how digital KYC is a harbinger of equality and socio-economic progress. Expansion Of KYC- Analyzing The Core Variables Here are some aspects worth noting in this regard: The complexities inherent in KYC have led to multiple issues with verification. Experts have still voiced concerns regarding data leaks and the fact that almost everybody has been exposed in one way or another. Another issue worth examining is the fact that people may have multiple accounts, email addresses and phone numbers along with addresses which are legitimate. Which is the one to use for verification while engaging digitally and what are the correlations among various aspects of identity? This is where fintech players are working to eliminate complexities with a view towards ensuring more accurate identity assessments. Some experts have sought to demarcate digital identity from identity.  While it may not seem so on paper, there are major differences. The conventional version of identity is backed by physical identity cards which include written signatures and public registries. Digital identity represents a complex environment which is continually being evaluated. With expansion of KYC and continual evolution, it is now transforming into KYP, i.e. Know Your Player. KYC ensures higher importance for procedures as compared to individuals while KYP ensures more importance for people instead. Such procedural aspects have been witnessed in the online gaming space which is a harbinger for future developments to come. The expansion of KYC into a medium of digital identity and verification will ultimately encompass multiple categories of transactions. At the same time, there is a seamless flow of KYC into KYP and this will emphasize individuals as mentioned. Ultimately, there has to be a process for sorting out complexities regarding multiple identities and seamless merging of the same for digital verification. The growth of these trends will continue and ultimately the issues may be ironed out as per industry experts. Key Takeaways: KYC is steadily expanding into digital avenues. It is flowing seamlessly into the concept of KYP. Bottlenecks still remain as to the alignment of multiple identities and security aspects.

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World Earth Day – Role of Digital Technologies in Correcting Environmental Impact

April 20, 2022

Environmental impact, natural calamities and global warming are the biggest moot points today among policymakers and corporates worldwide. While Nature’s Fury is not fully in our hands, technology can be a future safeguard in terms of better response systems, mitigation strategies and correcting environmental impact. With World Earth Day around the corner on 22nd April 2022, now is the time for countries and authorities to adopt comprehensive digital technologies for managing environmental impact, and conditions and contribute towards futuristic, sustainable and sound policymaking. Digital Technologies- How They Stack Up? Digital technologies may enable easier decision-making and response systems through their integration into environment-linked data. For instance, with New Delhi suffering from toxic air quality last winter, residents were able to track everything on the GEMS Air (Global Environment Monitoring System Air) site in real-time. GEMS Air is one of the numerous technologies deployed by the UNEP (United Nations Environment Programme) for tracking environmental conditions at local, global and national levels. In the near future, integrated digital data platforms will help countries understand, track, manage and mitigate environmental hazards including growing air pollution and harmful emissions. Multiple public and private sector players are already tapping into digital technologies and data for scaling up environmental action plans. At a time when the world is battling pollution, loss of biodiversity and climate change, digital technologies are enabling transformational measures for safeguarding nature, lowering pollution and boosting overall sustainability. GEMS Air for instance is the biggest air pollution network worldwide, encompassing almost 5,000 cities. More than 50 million people accessed it in 2020 as per reports. It is now playing a crucial role in alerting citizens about risks with real-time updates. How Other Digital Tools Are Contributing To Much-Needed Environmental Action? Big data and other technologies are helping generate timely and effective insights. For instance, farmers now have accurate data on weather and predictive modelling/forecasting applications. They can lower the usage of water, conserve natural resources and prepare for calamities. Applying digital technologies to environmental information is helping in better management and regulations. For instance, migrations of birds are hard to track and cover various regions. This is a major obstacle to conservation efforts in this space. Yet, forecasting models are now helping understand patterns and variances in migration. This knowledge is helping combat migration issues with better policies. Non-governmental change agents are also being mobilized through environmental insights and information, including corporates, communities and organisations. Some tools are already tapping data on emissions of methane already and offering analytics to companies for building future sustainability goals. Simultaneously, digital technologies are playing a role in enhancing overall accountability among all stakeholders, veering policy-making away from distractions towards hardcore and understandable analytics and environmental data. Minimizing environmental impact, identifying potential problems and finding solutions are processes made faster and easier through digital technologies. AI and big data analytics along with IoT, social platforms and mobile applications are contributing towards enhanced sustainability, lower resource usage and greater awareness. At a rudimentary level, these technologies are digitizing workplaces, production units and establishments, making them more environment-friendly and conserving more resources as a result. More corporates are depending on AI and IoT along with analytics for coming up with futuristic and more sustainable practices that lower carbon emissions and minimize wastage. Big data analytics is already at work in certifying products based on their environmental sustainability quotient. Blockchain may be used for greater sustainability in the future, scaling up lifecycles of products, maximizing usage of resources and lowering emissions, thereby greatly contributing to lowering environmental impact. These are only a few of the multifarious use cases of digital technologies and their role in mitigating environmental impact. One aspect is crystal clear- A fusion of environmental understanding, policies and sustainability with digitization is mandatory. It is digital transformation that will enable countries to move towards lower resource wastage, higher conservation and more sustainable ecosystems. On World Earth Day, it is time to embrace the power of technology and use it for environmental good.

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Challenger Bank Is The New Coopetitive Competitor

April 18, 2022

Challenger banks have witnessed phenomenal growth over the last few years, becoming marshals of the global fintech space. These banks have set the cat amongst the pigeons in conventional banking globally with more innovation, digital-led offerings and unique and multi-dimensional customer service.  With a customer is king template and the spirit of coopetition or positive collaborations in the space, challenger banks could well be the fast-growing Davids amidst banking Goliaths today. A Little About Challenger Banks Challenger banks are intrinsically technology companies, tapping their expertise and software to streamline and digitize conventional retail banking. These entities are strongly leveraging digital channels for distribution (usually mobile-based) to provide highly competitive services in the retail banking segment. These include savings and checking accounts, credit cards, insurance and even loans. How Do They Differ From Their Regular Peers? Retail banking has always emphasized the presence of a branch and in-person experiences, while challenger banks are always tech-driven, depending on desktop/mobile platforms. They harp on customer experiences and continual improvement, targeting those desirous of online banking without visiting any retail point. Challenger banks are gaining ground among customers who are shying away from conventional bankers and institutional players post the worldwide financial crisis. They are posing a literal challenge (true to their name) to the business models of retail bankers. This is being done through low and transparent fees charged to customers, faster service offerings and superior user experiences via 24-7 agile digital platforms, which can give legacy banking software a run for its money. Challenger banks are also reaching out to under-served or un-served demographics (for conventional retail banks), including those in lower-income groups or without credit histories, for instance. The Digital Banking Revolution And What It Means Reports highlight 240,000 bank branches throughout Europe in 2019 when digital banking was still in its nascent stages. Yet, challenger banks are expanding with the premise of people moving completely towards mobile and digital banking in the future. Digital banking has broken records ever since, with branch counts in Europe reducing to 165,000. It could well go down even more over the next few years, per domain experts. Some reports forecast how 3.6 billion global citizens (almost 1 out of 2 adult individuals) will use digital banking by 2024, across desktop and mobile channels. The United Kingdom (UK) has already embraced the Digi-banking wave and more countries in the continent are in the queue. The coronavirus outbreak added fuel to the fire, leading to the closures of several retail banking branches and accelerating the adoption of digital banking platforms. Global usage of mobile payment and banking apps went up by 26% in H1 2020, per surveys. Challenger banks are feeding off this digital shift, while conventional bankers continue maintaining branch-based models, developing their online offerings simultaneously. How Coopetition Is The New Mantra For Challenger Banks? What is this new keyword coopetition that is being widely discussed at a global level? What has it got to do with worldwide fintech and challenger banks? The word fuses the terms competition and cooperation. This means that challenger banks are partnering with conventional banking institutions for building new services, products and industry solutions. Many industry stakeholders feel that this is the best future pathway for the banking and financial services sector in terms of innovation. They highlight collaboration and teamwork as necessary virtues for creating a future ecosystem that serves customers even better and in more innovative ways. Key Schools Of Thought And Developments  The collaboration will ultimately unearth higher consumer benefits, and feel industry veterans. Fintech players/challenger banks and conventional banks may not always be competing in the same segments. They may have different customer sectors and demographics. This may help in building newer avenues for feeding off each other, stimulating a spirit of continual learning and growth. Coopetition may not only encompass teaming up to build new products and services but also knowledge exchange via webinars, forums, industry conferences and best practices. Some feel that competition and coopetition represent similar ideals. Businesses will always have goals putting them directly against other entities in the same industry. However, this does not hinder collaborative work in areas beyond the competition. Some of these areas highlighted by experts include enhancing overall financial inclusion for instance. Several challenger banks are already partnering with conventional peers for enhancing outcomes for consumers, including more people who would not normally fit into traditional lenders’ profiles. Some Other Things Worth Noting Some industry experts also opine that almost 1/3rd of the millennial generation may have already switched to digital banks as primary providers of checking accounts. Hence, they claim that digital entities are not challenger banks anymore but are a part of the mainstream. Some claim that this indicates how digital banks have already won the battle against their traditional counterparts while some indicate this as a natural response to the shifting demands of consumers. Some feel that banks and institutions should sync their future goals digitally with building experiences for consumers. More than 50% of people will only work with institutions offering digital account opening in the future according to these experts. Many flags the role played by legacy vendors in the global banking sector with outdated technological expertise and acquisition-driven approaches toward future innovation. The Core Takeaway The whole world is closely following the next phase of the ever-evolving relationship between conventional lenders and fintech players (challenger banks).  How will it pan out? Can conventional lenders adopt a more agile mechanism towards shifting consumer preferences, teaming up with challenger entities to speed up their procedures, include more people into the portfolio and build innovative experiences for customers? Can coopetition work in such a hotly contested space? Will this become a successful operational model for the BFSI sector globally?  An insular way of doing business is no longer possible technologically at least. If you keep that aspect in mind, think how Apple offers Google apps in its App Store or how Microsoft has gone ahead to include not just the Windows OS for

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Is It The Right Time For Britain To Start Investing In The Software Development Partners Of India? Check Now!

September 13, 2021

If the second wave of covid 19 has made India weaker, digital resilience has helped India grow faster. Even when the European Union was experiencing a contraction of 0.2% in the last quarter, India grew by 1.6%. Today, India attracts 65% of the world’s software development projects across the globe. In spite of 81% of the population working in the informal sector, India was predicted to go through a disastrous year. Also, India is a place that is predominant with English speaking population. Cheap labour cost, highly skilled workforce and deep internet penetration has attracted 20 billion dollars foreign investment in the four months of lockdown. India is becoming a digital economy, and it is growing faster than before with contributing up to 1 trillion dollars each year. The covid-19 pandemic is the worst nightmare for the world economy, but it has also accelerated the digital transformation underway for a long time.  While passing through the storm, India has differentially equipped itself to deal with the consequences. Among various leading countries of the world, India is where coders, designers, and computer science graduates rule at the workplace. India is now a country with 560 million digital subscribers.  Now is the right time to invest more in the digital economy of the world. The recent trend in India has re-defined its digital resilience towards future uncertainties. Our CEO, in talk with Comment Central, said  “India will be one of the pandemic’s winners as the global economy becomes more digital-focussed and remote work becomes the norm, creating opportunities for India’s young tech-savvy workforce.”  Thus, this trend will also lead to incremental growth of remote work. This trend is very effective for outsourcing software development projects. Reports suggest that the software development partners are highly profiting the companies in various ways, such as: Availing talent at an optimal cost Getting the best talent at the best price is a dream for companies. The best coders for the project are difficult to get, and if one wants to complete the project within budget, it becomes more difficult! Thus India is a place where companies like to outsource their projects at a minimal price.  Pay on an hourly basis When remote workers are hired for software development projects, then it becomes easier for companies to pay only for the engagement hours. This reduces the cost heavily. Experiencing higher productivity with overlapping time periods Indian software development companies ensure that the coders work in the partner’s time zone, which helps the company track the task progress.  And this trend didn’t develop during the covid times only. If it is the new normal for the world, then it is old for India. Rungta further added  “The country’s IT sector has been a leading force for digital transformation globally for several years. Post-pandemic, India may become the world’s leading digital economy. Many Indian companies already lead digital transformations for global companies. If Britain wants a slice of India’s digital resilience, it had better start investing in it now.” Therefore to know more about what our CEO Abhishek Rungta said in talks with comment central, click here.

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Virtual Banking: From A Global Hype To A Norm

November 12, 2019

“The fact that two-fifths of UK consumers won’t even consider using a bank with no presence on the high street demonstrates that there is a way to go to instil confidence. Few people rave about their bank, yet so many of us are cautious about trying a new way of doing things. The hurdle for digital banks is to get consumers to experience first-hand what the next generation of banking looks like.  Countless statistics on customer journeys tell us that people find digital banking easier than the traditional high street model, but a lot of consumers aren’t tech-confident enough to give it a go in order to find that out. To really compete, digital-only banks should be considering how they collaborate as an industry to help customers feel digitally literate enough to give their services a try. The payments industry works in a far more collaborative way to bring new offerings like contactless payments to market; this could be a good example for digital-only banks to follow.” – Anton Ruddenklau, Head of financial services digital and innovation, KPMG United Kingdom. In the last few years, a sudden rise of direct-to-consumer banks-usually called virtual banks have grown with around 11% of users across the globe started to using it as their main account reported by a study of 2019 FIS Performance Against Client Expectations. In the survey of 1749 U.S. consumers, it was reported that the reason was the shopper satisfaction index.  If we go around and see the data in details we get the following inferences for the UK. Top users of virtual banking Top users of digital payment Brighton (33%) Brighton (75%) Newcastle (32%) Cardiff (68%) Plymouth (29%) Southampton (65%)   Source: The Fintech Times  It’s creating a market of its own Virtual banking is convenient, it’s cheaper, and it’s gaining traction among international customers. Digital-banking is additionally fettered by a variety of things which will keep it a distinct segment market. Over time, the leading digital-banking establishments can overcome the issues of security and client satisfaction which can result in higher measurability. Until then, traders, investors, and shoppers of digital banks have to be compelled to be ready for volatility and churn because the market matures. There are many directions in which the digital banks will want to expand their numbers of shoppers. One direction is cryptocurrency. Digital banks are already partnering with outstanding block-chain technologies to power their performance. It’s solely natural for these establishments to list the tokens that underlie the block-chains similarly.   The fact that blockchain as a technology is maturing and a number of cross border FinTech start-ups like Transfer wise (money transfers without changing countries) are challenging the norm. It is a matter of time that USPs like availability of 24×7, on the go and lower costs are offered to the consumers, which will further help boom the market. The outcome, for the buyer, is probably going to be a mix of digital and ancient banking. The 2 can work hand in hand to supply the monetary product, access to markets, and account services across the spectrum of decree and cryptocurrency  In fact, if we go deeper and understand the trend we identify that 9% of British adults have opened an account with a digital-only bank, equating to 4.5 million people, reports a survey conducted by Finder. The proportion is higher among younger age groups. 15% of generation Z (born after 1996) compared to just 6% of baby boomers (54–73-year-olds). With London setting the example, being the fastest growing in digital-only bank accounts holders and next 26% of Londoners getting ready to open one. The stage is set. Start imagining a world where your ATM Card can let you have any currency of any kind and you will know that virtual banks are already here.

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Big Plans For Small Payment Banks & Wallets With e-KYC

October 18, 2019

Highlights RBI has extended the deadline for digital wallets to become fully KYC compliant by 29th February 2020. After this date, users will no longer able to use e-wallets for transactions if they are not KYC compliant. As per the latest numbers from the Reserve Bank of India, as on June 2019, around 367 million transactions were reported through mobile wallets that is 18% year on year increase. “Know Your Customer” or KYC is used by businesses and refers to the process of verification of the identity of the customers and clients either before or during the start of doing business with them. As per the RBI guidelines, banks and financial institutions as well as digital payment companies like PhonePe, Paytm, Amazon Pay and others need to complete their KYC processes to identify and validate its customers. Herewith the service providers need to conduct face-to-face verification of all users. Previously, Payments Council of India (PCI) had requested the Indian Government to come up with a simple and easy process for KYC linking so face-to-face verification can be avoided. This has given way to the allowance of the voluntary use of the biometric identifier for the opening of bank accounts as well as through e-KYC in case of verification done via documents like voter ID and driving licence. The same procedure can also be applicable for investment in mutual funds and opening of Demat accounts. The trends have led to Rise in financial online crimes Increase in bank regulations Rise in the demand for remote account on-boarding  The fintech players have long demanded that KYC be allowed to be undertaken in a non-face-to-face manner such that customers can be on-boarded from the ease and comfort of their homes, and thereafter, provided a slew of payment and credit options. How does e-KYC work? E-KYC involves capturing a live photo of the customer and valid documents (where offline verification cannot be carried out). Longitude and latitude of the location of the place where the live photo is taken by an authorised bank officer. A step-by-step procedure has already been laid down for performing Digital KYC. However, this requirement has reinforced the need for KYC to be done in the physical presence of the officials and in fact, further regulated their interaction. This has all but killed the ‘attempted digitisation’ and with it, hopes of the fintech sector. The curious case of CKYCR The Central KYC Registry (CKYCR) came into being with much fanfare in 2015. There was hope that once all KYC records of customers are stored in a centralised registry, there would be no requirement to re-submit KYC documents and information. For completion, regulated entities would only be required to obtain from the customer his/her KYC identifier — which was allotted at the time of uploading information on the CKYCR — and some basic data. This would serve as a basis for the details that could be downloaded. However, despite the laudable regulatory intent, the CKYCR is yet to take off even after 4 years, for multiple reasons. First, the regulations failed to clarify the manner in which information would be continually updated, whether it would be enough for regulated entities to just obtain a confirmation from the customer that the information stored in the registry is accurate or whether it is to obtain ID documents to ensure accuracy. Second, there is limited customer information in the registry on account of costs associated with uploading of information on the CKYCR. With this, another attempt at a simplified KYC process has fallen short of expectations. Not Too Late? Recently, the steering committee on fintech-related issues comprising the Ministry of Finance released its report in which it noted the urgent need to reduce the costs of KYC to promote financial inclusion among weaker sections. The committee specifically recommended new modes of KYC, including a video-based process, e-sign and non-face-to-face onboarding, and also proposed for CKYCR to be made fully operational with no charges of uploading the data. Electronic KYC (eKYC) enables the financial services industry to assess the risks or illegal intentions of each user, during each transaction, whether they’re opening or attempting to log into an account, applying for a loan or making a payment. The right eKYC strategy can transform a financial institution’s manual KYC, AML and customer onboarding processes into a streamlined online approach. There are several ways and technologies that can be brought to bear to perform eKYC, AML screening and online identity verification. For financial institutions that rely on a government-issued ID document and biometric verification, the online identity verification process generally consists of a few key ingredients. Optical Character Recognition (OCR) to extract data from the ID document ID verification to ensure the ID is valid and undoctored Selfie capture and comparison to ID document to increase identity assurance Some fintech and financial institutions attempt to stitch together their own homegrown KYC processes by combining optical character recognition (OCR) and facial recognition solutions with their own manual processes and review teams, given the low cost of labour in APAC. It will be interesting if the regulatory bodies ensure that these stopovers reduce the adoption time and reduce the penetration as the payment banks in India is already bleeding money.

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KYC

Centralized KYC System: Yet a dream in India!

June 13, 2019

The centralised KYC, designed to reduce the burden of producing KYC documents and getting verified every time when the customer creates a new relationship with a financial entity; has been under the scanner due to its high costs and hybrid model of physical + digital verification . Additionally, data protection concerns of the banks and other institutes has never allowed it to take the growth curve, it was expected to. However, the advantages offered by the centralised database can never be denied.With CKYCR a number of risks can get mitigated as unlike Aadhaar (which offered similar KYC functionality), the CKYCR does not include biometric information, which reduces potential data protection risks. What needs to be acknowledged here is that CKYCR was meant to be interoperable without sensitive personal information sharing. It falls under the rules of data protection framed under the Information Technology Act and the proposed data protection law provided that data collected from a customer can only be used for the purpose to which the customer consented to. Nonetheless, large banks remain wary about making the public database accessible since they will be the biggest contributor of data and are also fixated on security concerns and misuse of data by small FinTech’s or regulators –that can threaten the reputation of the bank providing the data. While the industry players/FinTechs are still juggling with different options as an alternative of paper-based KYC verification; a number of brands are banking on these innovations. Tata Mutual Fund has launched “video KYC” as a digital solution to KYC verification. Evidently, video solution comes as one of the most secure, efficient and accurate form of verification that caters to most of the concerns stated above. Open banking is already in use as a collaborative model in which banking data is shared through APIs between two or more unaffiliated parties. APIs have been used for decades, particularly in the United States, to enable personal financial management software, to present billing detail at bank websites, and to connect developers to payments networks like Visa and Mastercard. To date, in India however, these connections have been used primarily to share information rather than to transfer money. Given the little justification for repeating the same KYC procedure across different financial products and the time and cost this entails –dedicated API as developed by NCPI could instead be used for the benefit of investors. Answer comes in the form of DigiLocker as well. It can leverage synergies towards a better KYC and can also be used beyond identity-related documents. Many banks have already started using it for various purposes, including reviewing documents for loan applications. Recently, ICICI Bank has integrated its retail internet banking platform with DigiLocker. In a recent event at MCCI Fintech Forum 2019, Shri Deepak Kumar, CGM-In-Charge, Department of Information Technology, Reserve Bank of India said, “As a technologist, I have no doubt that options beyond Aadhaar based KYC has any limitations in execution. However, compliance issues still remains a key challenge. The sooner it gets solved, the better it is”. As banks continue to refrain from sharing KYC data in the absence of mutual benefits the Government has allowed non-banking firms to verify customer data through offline Aadhaar verification, which can be done by the use of KYC XML or QR code. Though the process is still evolving, the year 2019 can be a deciding one. Keep your eyes open!

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When Technology Met Traditional Banking

April 3, 2019

Digitization has transformed and challenged every traditional business. Therefore, New Age Banking is nothing but digitization of traditional banking procedures. That means, now you can skip those long queues and can be click dependent! During the course of digitization in India, team Indus Net Technologies have played a predominant role in digitizing products and services for several financial organizations, allowing them to be accessible 24X7 for client servicing and acquiring new businesses. Today, we have a wide plethora of digital products and services and this article takes you through the process of digitization in banking. Online Lending Traditional lending always drove off customers, owing to the cumbersome procedures. However, financial institutions identify lending to be an effective revenue channel for which, banks are also putting effort to minimize the time and effort for a customer to avail loan or cards. Therefore, online lending eases customers to avail of the lending services in no time. Following points brush through the Unique Selling Points (USP) which are used by banks for lending Pre-approved personal loans Paperless transaction Seamless and short online journey Instant disbursal The digital lending process thus simplified the complications of lending and removes the human resources thereby helping banks to maximize their profit. Use case: IndusInd Bank provides pre-approved loans to their customers from their portal where ETB users can log in and get lending’s instantly if eligible. They also have a portal for providing Loan Against Securities and services to provide Consumer Durable Loans. FOREX Foreign currency exchange is something that was served by only aggregators and offline shops till recent times. Digitization of foreign currency exchange is one of the hottest trends sweeping the industry. “Multi-currency Travel Card” is another product in their bouquet. Today, the complete act of end-to-end foreign currency exchange has become hassle-free. And that’s what technology is meant to be! Following USPs are used by banks for foreign currency exchange Hassle-free onboarding Paperless transaction Complete online journey Airport/Kiosk based delivery With respect to the product “Multi-Currency Travel Card” banks today, eased the seamless card buying and reloading process, allowing the customer to opt for the product over cash. Security is another aspect that allows the customer to choose “Multi-currency Travel Card” as their travel buddy. Following USPs are used by banks for channelling customers for “Multi-Currency Travel Card”. Hassle-free reloading Encashment of leftover currency Currency conversion Door Step delivery Airport/Kiosk based delivery & reload Use case: IndusInd Bank has facilitated a dedicated portal for providing existing and new customers with foreign currency exchange, purchase and reloading Multi-Currency Travel Card. The best part about digitization is the end-to-end delivery of the service. That means not just the product became handy, but also the delivery process! Banking Services Banking services is a mandate for the bank customer to visit a branch of a bank. Owing to ease off the ‘request service’ procedure and providing a response to the request, banks are attaining the requests via their service request digital platforms. Different digital platforms are created by banks via web and mobile platforms which allows customers to login with their information and place their service request. The information in turn is processed digitally by the banks and is implemented as per request. USP’s for digital service request processing are Hassle-free requesting placement Less cost of the request processing Customer satisfaction WHAT’S IN STORE FOR TRADITIONAL BANKING’S FATE? Looking forward, digitization is gradually changing the course of human interaction with the bank with respect to our requirements. Though the expectation from a bank remains the same the interaction procedure and channels would completely transform. That way, our future is pretty clear when technology will replace traditional bank visits for whatsoever purpose.   Following transformation in traditional banking could be predicted  Increase in customer on-boarding via the mobile medium Digitization of the products and processes Targeting Non-Banking Financial Company (NBFC) level customers Less investment in process and more investment in digitization

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