Presentation on Innovation in Technology & Products at
KGFS
Dr. Nachiket Mor
14-12-09
CONTENT
Technology – approach, application & infrastructure
Banking in rural area
Introduction of Kshetriya Gramin Financi...
Banking in rural area – Some facts
• Nature of transaction in rural areas
• Low value
• Frequent transactions
• Need to cu...
Banking in rural area – Some facts
• Unique transactional environment
• Local language interface for customers
• No system...
Technology Approach
• Offline/Online mode of operations
• Internet/Intranet- hybrid model
• Single data entry point to red...
Key applications of technology..
• Customer unique identification
• To record credit history
• Enables dedupe process
• Co...
Key applications of technology..
• Profiling and continuous updation of customer household data
• To build scoring models
...
Technology Infrastructure
Available Not Available
•Moderate Broadband internet
connection
•Mobile connection(GSM/CDMA)
•Lo...
Kshetriya Gramin Financial Services
• To provide financial services to underserved
rural areas
• Financial services offere...
Traditional way of collecting customer information
• Filling application forms
• Signing application forms
• Dispatching p...
Enrollment process at KGFS
• Customer details
• Household members details
• Linking of household
members
• Demographic det...
Video in Next Slide
Online Enrollment process at KGFS
Paperless Office at KGFS
Video in Next Slide
* Footnote
Source: Source
Customer authentication – Biometrics capture in smart card
Customer receives
smart card
CMS
Fino...
* Footnote
Source: Source
Loan disbursement/repayment via smart card
Customer receives cash
Customer A/c opening
/sanction...
Software as a service(SaaS)-
• Benefits
– Pay as per usage
– Easily scalable as no. of customers grow
– Centrally managed ...
Technology at KGFS (Encapsulating View)
Video in Next Slide
Areas of Partnership
• Optimal way of using biometric to identify customers
• Low cost computing and data entry devices
• ...
Wealth Management tool
19
Innovation at Product front
Money Market Mutual Fund
• KGFS launched MMMF which gives a return of 7-8%(based on historic d...
* Footnote
Source: Source
Money Market Mutual Fund via smart card
MMMF Purchase
request in CMS
Customer A/C
information (1...
Enhancing collateral value (Cattle insurance)
Challenges Solution
•High transaction cost
•Lack of information
•Unfavorable...
Enhancing collateral value (cattle insurance) contd..
23
Thank you
440, Guna Complex | 6th Floor | Anna Salai | Teynampet | Chennai - 18
www.ifmr.co.in
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Innovation in Technology & Products at KGFS

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Dr. Nachiket Mor's presentation at India-EU Workshop on Innovation & Partnerships on 14th Dec 09.

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Innovation in Technology & Products at KGFS

  1. 1. Presentation on Innovation in Technology & Products at KGFS Dr. Nachiket Mor 14-12-09
  2. 2. CONTENT Technology – approach, application & infrastructure Banking in rural area Introduction of Kshetriya Gramin Financial Services Innovation in Technology Wealth Management Product innovation 2
  3. 3. Banking in rural area – Some facts • Nature of transaction in rural areas • Low value • Frequent transactions • Need to customize current model to take care of: • Several proximate touch points • Unreliable connectivity at last mile • Investment in local human resource • High monitoring for some portfolios 3
  4. 4. Banking in rural area – Some facts • Unique transactional environment • Local language interface for customers • No systematic way to record credit history • Challenge to provide KYC documents • Limited products available • Lack of savings, remittance and other mainstream banking products • Lots of paperwork involved increasing turnaround time and cost of transaction. 4
  5. 5. Technology Approach • Offline/Online mode of operations • Internet/Intranet- hybrid model • Single data entry point to reduce duplication • Connect through various connectivity channels like VSAT, broadband and RF towers • Verify with biometric to know your customer • Using mobile as an alternate channel • System Availability 5
  6. 6. Key applications of technology.. • Customer unique identification • To record credit history • Enables dedupe process • Conversion of data into useful conversion • Reduction in transaction cost • Fixed cost of transaction irrespective of value • Paper has a cost 6
  7. 7. Key applications of technology.. • Profiling and continuous updation of customer household data • To build scoring models • To develop new products • To understand the impact of usage • Equip frontline staff to do financial planning • Enhance collateral management • Building systems to scale 7
  8. 8. Technology Infrastructure Available Not Available •Moderate Broadband internet connection •Mobile connection(GSM/CDMA) •Low cost personal computer hardware •Low cost mobile phones •Reliable hardware support •Reliable cost effective internet connectivity •Reliable electricity •Reliable GPRS connectivity •Cost effective application model •Cost effective - Core systems - Automation systems - Analytics - Server hardware 8
  9. 9. Kshetriya Gramin Financial Services • To provide financial services to underserved rural areas • Financial services offered are: - Loans - Insurance - Money market mutual fund - Remittances • Each KGFS to operate in two districts or cover 5 million population • Ownership for maximising the financial wellbeing of the clients • Thin level branch at village level • Strong back office with technology infrastructure 9
  10. 10. Traditional way of collecting customer information • Filling application forms • Signing application forms • Dispatching physical records • Handling and transportation cost • Back office data entry/BPO • Prone to manual error • Time consuming tracking process • Increase in Turn around time 10
  11. 11. Enrollment process at KGFS • Customer details • Household members details • Linking of household members • Demographic details • Financial details – Income – Expenditure – Asset – Liability • All ten fingerprint biometric details • Customer photo 11
  12. 12. Video in Next Slide Online Enrollment process at KGFS
  13. 13. Paperless Office at KGFS Video in Next Slide
  14. 14. * Footnote Source: Source Customer authentication – Biometrics capture in smart card Customer receives smart card CMS Fino Enrollment station •Fingerprints are stored in smart card in PKS format •Smart card used has URN on fascia and chip •Card has 20 pockets, 4- fingerprints, 1- customer info, 15- products •BMP fingerprint formats are stored to reproduce any template format as per industry standard All ten Fingerprints export Best four fingerprint templates and chip/ card personalization Process Card sent to branch FINO Personalization center Card with key and application FINO Backup server Finger print upload for dedupe 14
  15. 15. * Footnote Source: Source Loan disbursement/repayment via smart card Customer receives cash Customer A/c opening /sanction in Flexcube Customer A/C information (1) Sync Download (2) Loan disbursal (3) Loan Disbursal information(5) FlNO switch Flexcube FlNO switch Loan O/S and EWI information(6) Sync Download (7) Upload(4) Upload (9) Customer repayment (8) Repayment information(10) •POT machine can be synched through PSTN, GPRS, PC connected to internet •Predefined cut off time to settle POT •Offline Model 15
  16. 16. Software as a service(SaaS)- • Benefits – Pay as per usage – Easily scalable as no. of customers grow – Centrally managed services – Secured and provisions for business continuity planning • Unwanted costs – Software licensing cost – Hardware platform including application and database servers – Network and connectivity – Recurring cost of annual maintenance contract – Hiring quality technical human resource 16
  17. 17. Technology at KGFS (Encapsulating View) Video in Next Slide
  18. 18. Areas of Partnership • Optimal way of using biometric to identify customers • Low cost computing and data entry devices • Connectivity in remote rural areas/ mountainous region • Low cost structures for cash management services • Mobile phones as an interface for financial services 18
  19. 19. Wealth Management tool 19
  20. 20. Innovation at Product front Money Market Mutual Fund • KGFS launched MMMF which gives a return of 7-8%(based on historic data) • Technology backed automated process: no involvement of paper: customer can invest for as low as 1 Re. • PAN cards provided to KGFS customers - System generated PAN application forms for faster issuance of the card • KGFS redeems the amount required by customer and gets reimbursement from AMC one day later (pictorial representation in the next slide) Personal Accident Insurance • KGFS maintains the online database Insurance Management Software in CMS (Customer management system) • Automated remittance of premium 20
  21. 21. * Footnote Source: Source Money Market Mutual Fund via smart card MMMF Purchase request in CMS Customer A/C information (1) Folio and Units allocation (2) CAMS FINO Switch Sync Download (4) Folio and Units update to card(3) Folio and card balance update(5) FINO Switch CMS CAMS Instant cash Balance update (4) Redemption Request(3) Redemption Request(2) Redemption Request (1) Sync Balance update (5) Balance update(6) 21
  22. 22. Enhancing collateral value (Cattle insurance) Challenges Solution •High transaction cost •Lack of information •Unfavorable coverage terms •Poor risk reduction strategies •RFID tagging for livestock •Electronic registration and real time update •Health services with insurance •Integration of systems •Claim settlement process * Footnote Source: Source 22
  23. 23. Enhancing collateral value (cattle insurance) contd.. 23
  24. 24. Thank you 440, Guna Complex | 6th Floor | Anna Salai | Teynampet | Chennai - 18 www.ifmr.co.in

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