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Fake Accounts Cause for Concern

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Sanovi Technologies Pvt Ltd, the IT service provider to more than 70 percent of the top banks in India, expects the government’s FI programme to give further fillip to its business prospects, says Narayana Menon

Narayana Menon,

Narayana Menon,
Director-Marketing, APAC,
Middle East & North America, Sanovi Technologies Pvt Ltd

How can technology be best exploited to effectively execute the Prime Minister’s Jan Dhan Yojana?

The banking sector in India has experienced a rapid transformation. With the Prime Minister’s Jan Dhan Yojana (PMJDY), the banking sector is all poised to undergo a significant revolution in the financial sector. Technology will certainly play a significant role in helping the government 7.5 crore families open their bank accounts by January 26, 2015. The PMJDY has been conceived as a national mission on financial inclusion with the objective of covering all households in the country under the banking network.

In next few years, the account opening will change in a huge way with various innovations coming into the banking technology space. Recognising that technology has the potential to address the issues of outreach and credit delivery in rural and remote areas in a viable manner, banks have been advised to make effective use of ICT, to provide doorstep banking services through the Business Correspondents (BCs) model, where the accounts can be operated by even illiterate customers by using biometrics, thus ensuring the security of transactions and enhancing confidence in the banking system. Moreover: Opening bank accounts online could be one major way of speeding up the process to meet the target. People need not go the banks directly and fill in various forms and submit applications to open a new account. This can be easily done online with the click of a button.

Mobile device capabilities, including cameras and touch screens, can quickly reduce the time required to capture applicant data. Live Chat – Customers can go in for a live chat with the bank representative for opening a new account. This again cuts the time to a great extent while compared to physically going to a bank.

Big data, security and biometrics will play a huge role in transforming the banking sector in the coming years. Organisations like Sanovi, which are already deeply entrenched in the BFSI space, can be of great help to the banks in this endeavour. Sanovi provides business continuity and IT recovery management to more than 70 percent of the top banks in India.

What are the possible technological, policy-related or other challenges that could impede successful implementation of the programme?

The possibility of fake accounts is one issue that concerns the successful implementation of the PMJDY, as per recent media reports. Some who enrolled under the PMJDY may have accounts elsewhere and could have been persuaded to open new ones because of the attached insurance cover. This could account for about a fifth of the newly opened accounts, top bankers said, although there’s absolutely no way of knowing for sure yet.

Is there a need for regulatory changes to achieve the objectives of PMJDY?

Regulatory changes in some form or the other around micro financing, micro insurance, etc., are imperative. I feel ICT regulations and RBI regulatory and compliance mandates regarding particular projects for banks should be modernised especially in terms of leveraging the Cloud, ensuring service continuity and security as well as end-point devices facilitating banking transactions.

How can the government or banks help in opening up financial inclusion sector to start-ups and bringing in innovations?

I feel that there is already a trend where a lot of start-ups are bringing innovations to the various financial inclusion initiatives. There are at a multitude of influx points. From an IT perspective, the various unconventional approaches that the PMJDY project imbibes as part of the overall financial inclusion agenda gives opportunities to niche players and innovation led enterprises and start-ups to significantly contribute and drive nation building while being profitable. These are of course strictly monitored by the governing bodies regarding quality standards and compliance mandates. Government and banks are directly or indirectly opening up opportunities to innovative product/service providers as part of the larger financial inclusion agenda.

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