Financial inclusion cbt presentation feb 2011


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  • Citizen Need: Citizens are demanding that governments offer necessary services and operate at the same level of service that they receive in the private sector Citizens’ expectations of government are changing due to technological advances as well as social, political, and cultural changes Increased expectations for: better and faster service Expectation of reduced burden of government interaction: Paper work, Response time, Costs Increased expectations from government: Better service, Faster service, Secure service, Convenience, Personalized service Citizens are increasingly demanding secure interactions with government Business Needs: Expectation of reduced burden of government interaction: Paper work, Response time, Costs Increased expectations from government: Streamlined reporting, Better service, Faster service, Secure service, Convenience, Personalized service Businesses are demanding supportive legislative and regulatory environment Businesses are pushing for real-time feedback from government Businesses are expecting government to facilitate transition to the digital economy Community Needs: Communities are increasingly forming around issues to demand that governments provide the necessary services Communities’ expectations are changing due to technological advances as well as social, political, and cultural changes Regionalization of communities is pushing for improved information sharing among communities Non-geographic communities of interests are growing across the globe Devolution of accountability & service delivery responsibility to local community Virtual communities are expecting 7x24 responsiveness from government Employee Needs: Employees need to have the information, training, skills and assets to do their jobs more efficiently Recruiting and retaining highly skilled employees is increasing becoming chanllenging Demand similar training and work environment to leading edge corporations Employees’ expectations are changing due to technological advances as well as political and cultural changes Create more challenging work environment Knowledge management required by employees to provide value added services Enhanced level of skills required to deliver services via the Internet Continuous skill-enhancement is needed to meet the challenges arising from rapid technological advancement As decisions are pushed down to the customer interaction point, employees need instantaneous and relevant information to make decisions Other Gov't Needs Increased electronic interactions between central, regional and foreign governments and international organizations requiring new organizations, processes, and infrastructures Traditional organizational walls are breaking down requiring inter and intra agency information sharing Increased coordination is needed among all levels of government Regional alliances are forming to address economic development issues Media Needs Media is expecting instantaneous access to information Media is expecting increased access to decision makers There is increased scrutiny of government operations Media’s involvement is increasing in the political process Media is becoming increasingly sensational requiring immediate and accurate government response Social & Economic Changes Higher per capita income & aging populations More educated users Heightened economic stability & competitiveness Increasing globalization of economy and interactions Need to provide access and relevant content to all users -- address the digital divide Political Changes: Devolution of accountability & service delivery responsibility to local government Citizens are demanding for decision making increasingly at local level Regional alliances are forming - political, economic, and military Increasing access to information and decision making - transparent government Increasing globalization of trade Economic development needs partnering with other governments Cultural Changes Increased focus on personal responsibility for making decisions and actions Expectations for quick and instantaneous response Increased comfort level with on-line interactions with government Familiarity with networked environment Highly mobile workforce and communities Highly diverse workforce and communities Virtual environment - place and time becoming irrelevant Technolgical Advances Cheaper and faster technology Rapid development of newer technology Increasing mobile computing environment Increasing pervasive computing Increasing availability of technology Technologies providing universal access
  • Financial inclusion cbt presentation feb 2011

    1. 1. Financial Inclusion Challenges & Opportunities Role of Government-Industry-Academia PROF. K. Subramanian Director & Professor, Advanced Center for Informatics & Innovative Learning (ACIL), Indira Gandhi National Open University, New Delhi (IGNOU) SM(IEEE, USA), SMACM(USA), FIETE, SMCSI,MAIMA,MAIS(USA),MCFE(USA) Hon. IT Adviser to CAG of India EX-DDG, NIC, Ministry of Communications & Information Technology President, Cyber Society of India
    2. 2. The drivers and emerging trends in the Digital/Information age Economic Drivers Technological Advances Political Drivers Social Drivers Citizens Community Organizations Other Governments Media Businesses Employees Government-Government Business-Government Citizen-Government Common Needs
    3. 3. These changes impact the fundamental way that organizations compete in the digital/information age . Industrial Age Foundation for Economic Development Digital/Information Age Control of Natural Resources Control of Knowledge Competitive Advantage Protection of Assets/Resources Open/Competitive Rapid (re)invention Increase Scale Expansion Business Environment Labor Intensive Jobs Process-Related Work Work Outsourced Decision Making Hierarchical Collaborative Key Assets Human Resources, Information & Technical Infrastructure Physical Resources Geographic Scope Global Regional
    4. 4. India & Sustainable Development Role of ICT <ul><li>With a huge rural population, that is economically challenged Financial Inclusion is indispensible for the sustainable growth of India. </li></ul><ul><li>A holistic financial inclusion could be expedited with the maximum use of Information, Communication and Technology-enabled services supported by an extensive Financial Literacy mission. </li></ul>
    5. 5. <ul><li>Former UN Secretary-General Kofi Annan said: </li></ul><ul><ul><li>”The stark reality is that most poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector. Together, we can and must build inclusive financial sectors that help people improve their lives.” </li></ul></ul>
    6. 6. Financial Inclusion –A Definition <ul><li>Three main concerns in financial inclusion: </li></ul><ul><ul><ul><li>access to banking </li></ul></ul></ul><ul><ul><ul><li>access to affordable credit </li></ul></ul></ul><ul><ul><ul><li>access to free face-to-face financial advice. </li></ul></ul></ul><ul><li>'Financial Inclusion' is defined </li></ul><ul><ul><li>as an extension of banking and financial services at an affordable cost to unbanked people of the community. </li></ul></ul><ul><li>'Financial Exclusion' signifies </li></ul><ul><ul><li>the lack of access (by the economically poor and unbanked people of society) to appropriate, low-cost, fair and safe financial products and services. </li></ul></ul>
    7. 7. Dr. C. Rangarajan committee on financial inclusion <ul><li>&quot;Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.&quot; </li></ul><ul><li>The financial services include the entire range - savings, loans, insurance, credit, payments etc. The financial system has to provide its function of transferring resources from surplus to deficit units but both deficit and surplus units are those with low incomes, poor background etc. By providing these services, the aim is to help them come out of poverty. So far, the focus has only been on delivering credit (it is called as microfinance but is microcredit) and has been quite successful. Similar success has to be seen in other aspect of finance as well. </li></ul>
    8. 8. Financial Exclusion: Reasons <ul><li>Lack of information: </li></ul><ul><li>Lack of information about the role and function of banks, banking services and products, interest rates, etc. stop people from including themselves in mainstream banking. </li></ul><ul><li>Insufficient documentation: </li></ul><ul><li>Many people (even in metropolis and urban areas) are unable to show their self identification documents during the opening of a bank account or during taking a loan. </li></ul><ul><li>Lack of awareness: </li></ul><ul><li>Many people are unaware of the banking terms and conditions laid down from time to time. </li></ul><ul><li>High transaction charges : </li></ul><ul><li>Various commercial banks across the globe levy transaction charges on credit or debit transactions, on over usage of banking services, on cheque book issuance etc </li></ul><ul><li>Lack of access: </li></ul><ul><li>Accessibility is a problem from all those people who live in geopolitically isolated regions. Moreover, as most of the commercial banks are located in the vicinity of cities, people in rural areas (mainly in developing countries) have a geographical barrier in accessing banks. </li></ul><ul><li>Illiteracy: </li></ul><ul><li>Because of illiteracy, a substantial number of people are unable to take recourse to banking services. </li></ul>
    9. 9. Challenges In Financial Inclusion <ul><li>Several challenges like large area, cost of small value transactions, weak delivery model, unsuitable products, infrastructure, lack of finances, management support have to be effectively dealt with. </li></ul><ul><li>The automation of core banking processes with the use of channels such as ATM, IVR based Tele-banking, Internet banking, the banking industry has become more profitable. </li></ul><ul><li>Banks however, face an uphill task of reaching out to the mass customers in remote areas such as villages. Naxal Movement, low Return –OnInvestment (ROI), customer behavior, operating expenses inhibits banks from expansion in rural areas. </li></ul>
    10. 10. The Scenario & Actions 1 <ul><li>Financial Inclusion is needed for rural and downtrodden masses that are the future growth engine of the economy . </li></ul><ul><li>From the recent initiatives undertaken by the different world governments to foster financial inclusion, one cannot undermine the need to include the economically underprivileged in the mainstream banking sector . </li></ul><ul><li>The role of various ICT tools and </li></ul><ul><li>associated technologies in providing financial solutions to the unbanked is also substantial. Rural ATMs, plastic cards (like smart cards, biometric cards, etc.) and mobile payment technologies do have the ability to engage the unbanked sections . </li></ul><ul><li>Steps have been taken by the Government for the expansion of banking services and linking of opportunities among various segments of financial sector like capital markets, insurance, etc. to achieve its aim of Inclusive Growth. </li></ul>
    11. 11. The Scenario & Actions 2 <ul><li>High GDP growth in India , </li></ul><ul><li>Triggered by an open economy has created job opportunities in urban and semi-urban India and it will go further into rural India, increasing the potential for growth to vast sections of disadvantaged and low income groups. </li></ul><ul><li>Commercial banks are making use of the services of non-governmental organizations (NGOs/SHGs), micro-finance institutions, NBFCs, etc. as intermediaries for providing financial and banking services which could be used as business facilitators (BF) or business correspondents (BC) by them. </li></ul><ul><li>Government initiatives to support FI needs to be backed by progressive policies. This can be achieved only through Public- Private Partnership Model powered by ubiquitous technologies. </li></ul>
    12. 12. Role of Multi-stack holders Government-Industry-Academia Twenty Commandments <ul><li>A New Financial Architecture to Suit the Needs of Inclusive Growth </li></ul><ul><li>Coordination with UIDAI </li></ul><ul><li>Formation of National Financial Inclusion Mission </li></ul><ul><li>Involvement of Education Sector for furthering Financial Inclusion-Synergize Education & Development </li></ul><ul><li>Establishment of Financial Counselling Centres (SEWA Centres) </li></ul><ul><li>Building Client Capacities-To build a vibrant financial system </li></ul><ul><li>Financial Inclusion as a Corporate Social Responsibility of all the Banks and Financial Institutions </li></ul><ul><li>Role of RBI-- power of moral suasion as well as regulatory powers. </li></ul><ul><li>Political Will </li></ul><ul><li>Partnership with Dedicated NGOs and MFIs- financial as well as non-financial incentives have to be designed for the spirited involvement of such organisations </li></ul><ul><li>Financial Inclusion as a Part of Course Curriculum in High Schools (systemic Literacy) </li></ul><ul><li>Digitise the Documentation Process for Opening of Bank Accounts </li></ul><ul><li>Strategize the Provision of Bank Credit->strengthen rural credit </li></ul><ul><li>Exclusive Focus on the Socialyl Excluded and the Poor </li></ul><ul><li>Extensive use of Co-operatives  Greater role of NABARD </li></ul><ul><li>Procedural / Documentation Changes  Simplify </li></ul><ul><li>Proactive Role of Government </li></ul><ul><li>A Role for Rural Post Offices </li></ul><ul><li>Effective Use of Information Technology Solutions </li></ul><ul><li>Adequate Publicity for the Project of Financial Inclusion </li></ul>
    13. 13. A Combination of Technology, Innovation, Leadership and Inspired Workforce-Ingredients for Enterprise & National Development <ul><li>The economic strength is powered by competitiveness - The competitiveness is powered by knowledge power. - The knowledge power is powered by Technology and Innovation. - The Technology and Innovation is powered by resource investment. - The Resource investment is powered by revenue and return on Investment. -…Contd </li></ul>
    14. 14. A Combination of Technology, Innovation, Leadership and Inspired Workforce-Ingredients for Enterprise & National Development <ul><li>- The Revenue is powered by Volume and repeat sales through customer loyalty. - The customer loyalty is powered by Quality and Value of Products. - Quality and Value of products is powered by Employee Productivity and Innovation. - The Employee Productivity is powered by Employee Loyalty, employee satisfaction and working environment. - The Working Environment is powered by Management Stewardship. - Management stewardship is powered by Invisible leadership </li></ul>
    15. 15. Thank you <ul><li>FOR FURTHER INFORMATION PLEASE CONTACT :- </li></ul><ul><li>E-MAIL: [email_address] </li></ul><ul><li>[email_address] </li></ul><ul><li>[email_address] </li></ul><ul><li>91-11-23219857(CAG) </li></ul><ul><li>91-11-29533068(IGNOU) </li></ul><ul><li>Fax:91-11-29534217 </li></ul><ul><li>Office of the IGNOU </li></ul><ul><li>Maidan Garhi </li></ul><ul><li>New Delhi-110068 </li></ul><ul><li>------------------------ </li></ul>Let all of us work together to make our country Developed And Good Governed Nation