How Fintech Is Increasing Financial Inclusion after Demonetisation

Prospect of Personal Finance – Cashless/Paperless/Presence-less

Prospect of personal finance and money is being fashioned into three consequences namely cashless, paperless and presence-less. Due to demonetisation together with succeeding steps involved ever since attempts have been done by the Indian government in making the economy more digitized and less cash-dependent and the banking system is made more accessible.

 Being digital seems to be the quickest means of speeding up financial presence, ensuring that more individuals are brought under the domain of formal banking scheme, Moreover they can also take advantage from the linked benefits of insurance as well as investment. India has been a home to almost 50 crore million people who do not seem to involve themselves in formal banking either through saving account or a cell phone based payment scheme.
Digital execution means having a bank account and hence the challenge here is how you could get more individuals in opening bank accounts to provide them with digital benefits together with subsidies. When the government had been directing the country towards a reduction in the use of hard cash, people would need to have an account with the bank, together with internet connection as well as cell phone to operate the digital transaction. It is here that the roles of Aadhaar as well as the cell phone tend to get crucial.

Pilot Project through RBI

From the population of about 125 crore, around 109 crore have enrolled for Aadhar with at least 100 crore having cell phone number which is quite a large number than those having bank accounts which according to estimates would be around 70 crore.

With the combination of Aadhar together with cell phone it is advantageous of bridging the gap by around 30 crore unbanked individuals.The government has aided a pilot project, through the RBI which would quicken the opening of fresh bank accounts with the support of cell phones and Aadhaar.

Limited- functionality bank accounts can be opened by the customers utilising this system without the need of the usual stress of visiting a branch and submission of documents in completing the KYC process. With the aid of the Aadhaar linked cell number, their KYC can be completed by authenticating themselves via an OTP and one can open an account digitally, instantly, cashless, paperless, without the need of being physically present.

Process – Convenient & Easy 

This tends to be convenient and easy for the individual to complete the process in the comfort of his home and it is also great for financial service providers since the cost of customer acquisition tends to get condensed by relying on digital platform which have the capabilities of processing millions of account opening application simultaneously.

This will progressively be the type of account opening developments in insurance as well as investment sectors. Insurance providers have already been depending on the OTP system in authenticating new accounts through Aadhaar.

This development would be enhancing with the increase in internet penetration together with the availability of cheap smart phones. India has about 35 crore people, presently who are linked to the internet which tends to double every two to three years on an average and it is expected that by 2020, there would be around 70 crore Indians utilising the internet.

China-Backed AIIB Investment Bank

Australia/Netherlands/Russia Joined AIIB

Australia, Netherlands and Russia, became the latest three countries who have joined the China led Asian Infrastructure Investment Bank – AIIB adding power to an institution which is seen as enhancing China’s regional as well as global influence. Taiwan will also be submitting an application to join the Beijing led Asian Infrastructure Investment Bank in spite of historical hostility and absence of formal diplomatic relation between them.

In a recent revealed statement, Charles Chen, Taiwan presidential office spokesman informed that joining the AIIB would help Taiwan in its efforts at regional economic amalgamation as well as raise the possibility of linking other multinational bodies. It is unclear whether Beijing would be accepting Taiwan’s application in joining the AIIB.

The bank is envisaged as a significant obstacle to U.S. efforts, in extending its influence in the Asia-Pacific region and also in balancing the growing financial influence and assertiveness of China. Several countries inclusive of United State fail to recognize Taiwan due to pressure from China. Taiwan does not seem to be a member of the United Nations, the World Bank or the International Monetary Fund.

Several Countries to Join 

The AIIB seen as a challenge to the prevailing institutions, the World Bank and Asian Development Bank, has drawn a reply from the United State even though European U.S. Supporters whichinclude Britain, France, Germany and Italy had earlier announced that they would join the bank.

Turkey and South Korea have also informed that they too would be joining in while Brazil, one of China’s top trading partner informed that it would sign up and that there were no conditions set. The office of President DilmaRousseff mentioned in a statement that `Brazil is very interested in participating in this initiative’.

Igor Shuvalov, Russian First Deputy Prime Minister, according to an official Xinhua news agency, stated recently at a forum in Boao on the southern Chinese island of Hainan, that the country plans to join AIIB. At the same forum, according to Xinhua, Mathias Cormann, Australian Finance Minister informed that the country was planning to apply as a founder member which was later confirmed on the news agency that Georgia had also made an application.

Deadline Set for Joining as Founding Member - AIIB

Britain and Switzerland had been formally accepted as founding members of the AIIB, a day after Brazil had accepted China’s invitation to join in, according to China’s Finance Ministry. It also informed that Austria also had applied to join and had submitted their documents to China.

Taiwan’s statement has reported that China had set Tuesday as a deadline in becoming a founding member of the AIIB, encouraging a rush of nations which includes Russia, Australia, Denmark and Netherlands to indicate their intentions to join. In all 42 countries have applied.

The United States has advised the countries to think carefully about joining the AIIB till it shows adequate standards of governance as well as environmental and social safeguards. China sees Taiwan as a rebel province and has not ruled out the use of forces in bringing it under its control. Since Taiwan’s present president Ma Ying-jeou took charge in 2008, the enmity had deteriorated considerably and the two parties have signed several deals of trade and investment.

Virtual banks

Virtual banks are increasingly popular among investors. Since they have combined more advantages than the regular banks, people are attracted towards it. Now a day we are hearing more positive news about them. As the name suggests, almost all their entire activities happens online. Having all their activities focused on the web platform their operating cost minimized. No need for branches and no need for high paying multiple advisory. Consequence of all these the money savings are passed on to the customers virtual banks. In banking industry, the bank charges are very high and they are charging for each withdrawal but this kind of charges can be avoided in the online banks.

In virtual banks the administration fees and other regular bank charges are absent. You not only pay less but also the offer higher interest rates for your money deposited with then unlike the other street banks. With online banking, you can access your money at any time, 24h/24 and 7 days / 7. Sites are secure and the customer service is often of good quality. You can also automatically save practicing payroll deductions and pay yourself first. This behavior is preferred to achieve affluence smile icon Virtual banks. Finally, there is no bank fees charged; no minimums and most importantly, no limit transactions.

Panorama of the Luxembourg banking

Since World War II, the Grand Duchy of Luxembourg has become one of the richest countries of the world in terms of per capita GDP, supported by a financial services sector booming, political stability and European integration .

The Luxembourg banking sector in figures

Luxembourg's financial sector, the largest contributor to the Luxembourg economy (one quarter of its GDP), plays a major role as an international financial center. Taking advantage of a favorable tax legislation, many banks and investment funds have moved into the capital.

Definition of Indicators

The definition of indicators based on the combination of an empirical, research-based elements of non-quality in the device in place, and a theoretical approach, having as a starting point to identify key parameters management customer risk:

To invest in the improvement actions that correct the non-quality aspects of the most sensitive, the first step is to build a balanced scorecard indicators are most representative. It is an indispensable asset to the achievement of a critical diagnosis and appropriate vis-à-vis business strategies (risk, marketing, sales ...) defined. While some indicators can be retained only for statistical purposes, the others must be action-oriented: this means they must be involved in a lens quality (which will result in the definition of alert thresholds or levels of expected results ...) and an action plan to achieve the objective. The role of each business direction and / or SI concerned to arrive at the expected level of quality must be so in a charter previously defined: it is one of the key success factors of the process.

Identify the characteristics of the third party repository brings out the different types of people (customers, prospects, guarantees ...), information (customer classification, signs of third party monitoring bodies ...), for which the required quality levels are not necessarily the same. Two examples: the rate of duplication, including the reduction can improve the consolidation process and risk capital allocation, the rate of third parties not identified as an affiliate of the bank, resulting in poor consolidation risk on intra banking group.

Operative management - data quality

The importance of data quality in the operative management of counterparty risk.

Despite the efforts made by financial institutions to ensure compliance with the Basel 2, the internal audits and supervisory bodies highlight gaps in devices management customer risk.

Beyond the third scoring models in place to comply with regulations, financial institutions must continue efforts to ensure a sustainable level of quality control and so effectively and Reliable customer risk. If there are relatively simple and fast to improve data quality, only a comprehensive approach and equipped keeps this level over time and create a culture of quality in financial services, with the image of the industry.

The banking and financial regulation on the internal control of credit institutions and investment firms provides an outline of points to watch it should be integrated within the device management of counterparty risk.

To ensure compliance with regulations and ensure the proper level of control internally, branches wish to have the core quality indicators ensuring the validity of the information system risk management, validating the defined risk strategy and organization established to cover the risk client. The only way to dispose of is to use information systems to provide a quantitative analysis, but the relevance of these indicators is based on the quality of the IS.

System-level information, the presence of duplicates, unreliable links or combinations obsolescence of client identification are some examples of non-referential quality of the third most frequently cited. If they do not prevent the IF function, these problems can have a significant impact on end users and in particular the process of consolidating risks, commercial pilot, the fight against money laundering and grant decisions.

The variations in multi- channel strategy

The challenges of a multi-channel strategy are varied:

* Analyze the appetite canal of each client to use the appropriate channel.

* Update in real time all the information collected on the client and actions taken by the various channels.

* Provide a customer reference and not a contract or agency and reference different keys depending on the location of the system where you enter.

* Reorganize the network with the integration of multi-channel approach.

* To improve reception and increase the return rate to increase the effectiveness of campaigns.

* Controlling costs for greater profitability: to avoid cannibalization of a channel with one that would raise the cost of distribution for an identical volume of business.

The most delicate issue is to control the consistency of the channels. Indeed, the proliferation of channels only reinforces the risks associated with direct marketing campaigns: a campaign will generate even more inadequate for dissatisfaction it has been sent two or three times through multiple channels. Each pipe has its constraints that can undermine the effectiveness of a marketing campaign. The combination of more channels and interactivity allow them to circumvent these risks. To do this, the use of multi-channel increases the requirement on the supply, logistics, commercial pressure campaigns, performance monitoring and adjustments as well as organizational, process information system.

In conclusion, this multi-channel strategy, which appeared some years ago, remains in the crosshairs of the current issues. We have well established the online insurance cyber banking and have not had the desired penetration in the market. The trend can still be reversed and for the moment, many drivers have yet to be exploited:

* Messaging customized web portals of all institutions,

* The design of targeted advertising based on the behavior of the user,

* Improved tools subscriptions on the Internet and telephone (secure sites: electronic signature ...)

* Agency home with the setting up of terminals advisors.