April 2008

ICT for Financial Inclusion

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Why electronic banking?

Change is being driven by falling costs of technology, by competition and by the ability of electronic banking solutions to offer customers an enhanced range of services at a very low cost.

There are a number of advanced technologies and tools that can be used to expedite e-Banking mechanisms and applications. Technologies used in electronic banking include, but are not limited to:

  • Personal Digital Assistants: Used by microfinance programmes to automate record keeping.
  • Automatic Teller Machines and Point of Sale Devices: Used in conjunction with Magnetic stripe or Smart cards.
  • Magnetic Stripe Cards: Low cost cards operated through a magnetic stripe on the reverse of the card.
  • Smart Cards: More expensive chip-based cards that can store information offline on the embedded chip.
  • Cell-phone banking: Banking through cellular phones, either through menus or through SMS.

Whichever technical option is chosen the development of an electronic banking solution should consider the customer perspective

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