Digital inclusion

Digital inclusion is all about providing equal access to all individuals. With the spread of digital, the delivery of everything including finance products has become seamless. This will benefit BFSI companies more than ever, as the scope of digital inclusion is widening with more people using smartphones, and getting access to technology. BFSI sector was among the first to adopt as well as impacted by the digital wave.

Digital inclusion has made banking transactions easier and faster. The banks have now become technology-driven and provide various new features such as online banking, mobile banking, online loan approvals and many more services to their clients. Digitalization powers stronger return on investment for banks. The speed of change in the BFSI, as well as digitalisation, has been very rapid. We have moved away a lot away from where we were and where we are today.

Digitization has enabled banks to leverage the power of data analytics and artificial intelligence to make better business decisions and offer personalized services to customers. By collecting and analyzing customer data, banks can tailor their services to meet the specific needs of each customer.

More than 80% of Indians now have a bank account and 76% of transactions of the total GDP are happening digitally. UPI is projected to account for 90% of the total transaction volume in retail digital payments over the next five years.

We can see, from 83.71 billion transactions in 2022-23 to 379 billion transactions by 2026-27. As per PwC India, in the next five years, the payments industry is expected to focus on ecosystem expansion and new use cases for existing payment platforms. UPI transactions are likely to reach 1 billion per day by the year 2026-27, accounting for 90% of the retail digital payments in India.

Areas like embedded and ecosystem finance, digital lending based on payment transactions and offline payments will drive the next phase of growth for the payments industry. In the ever-evolving Indian payments landscape, innovation and inclusion are paving the way for a seamless digital economy.

Secondly, we will witness there will be collaboration between the banks and the fintechs where the banks bring-in their geographical reach, their access to the customers, and then you can work with the fintechs who actually bring lot more innovation, agility to the new product innovation, and you can serve the customers much better.

Going forward, the availability of digital payment transfers on CDMA phones and advanced usage of NLP and ChatGPT will democratize this segment further.

S Mohini Ratna, Editor, VARINDIA