Technology Based Banking

Penetration and Services:

Understanding the Awareness and Usage Issues of the
Low Income Groups
Authored and Presented by:
Dr. Shweta Anand, Associate Professor, SoM, Gautam Buddha University,
Delhi NCR, India.
Ms. Deepika Saxena, Assistant Professor, Jagan Institute of Management
Studies, Rohini, Delhi, India. (Also Off-Campus Research Student, SoM, Gautam
Buddha University)
Banking initiatives
towards Financial
Inclusion
Consumer Awareness and Usage studied under
following categories:
Online Banking Services
SMS Banking Services
Tele Banking Services
ATM Services
Business Correspondent /
Business Facilitator Model
Mobile
ATM
Mobile
ATM
Need of the Study
Banks are taking numerous
technology based initiatives for
banking services penetration.
But are these initiatives actually
reaching the bottom of the
pyramid? This aspect need to be
studied.
7
Objectives of the Study
To know the level of awareness among the low income groups of the
society towards financial inclusion initiatives taken by Banks.
To know the level of usage among the low income groups of the
society towards financial inclusion initiatives taken by Banks.
Financial Inclusion initiatives by Banks were categorized under -
Online Banking Services
SMS Banking Services
Tele Banking Services
ATM Services
Business Correspondent / Business Facilitator Model
Methodology and Data Sources
Primary Data:
Primary data was taken from respondents consist of low income group
and mainly doing menial jobs such as that of security guard, peon,
plumber, sweeper, watchman, electrician etc.
With great difficulty responses were received from 50 people in
Delhi/NCR by Personal Interview using Structured Questionnaire.
The respondents were chosen on the basis of convenience sampling.
Statistical tools are used for analyzing the result of the study.
Secondary Data:
Research papers published in various
national and international journals, magazines,
newspapers, RBI reports, websites of banks
etc. are used for collecting secondary data.
Findings and Analysis
Online Banking Services:
Awareness and usage among Low Income Groups
Level of awareness: 60% (30 out of 50) respondents
Usage level: 6% (3 out of 50) respondents
(not by themselves, but requested somebody to do
banking transaction on their behalf)
belong to the age group of 26-40 years, are employees
of the companies, agencies etc. having education up to
Xth standard.
Awareness Level: 90% (40 out of 50) respondents
Usage Level: 44% (22 out of 50) respondents
for receiving sms alert on mobile from bank for amount
debit/credit.
5 respondents who were not aware belong to the age group
of more than 60 years of age.
28 respondents who have not been using
this service is due to the trouble in filling
applications, long queues and waste of time.
SMS Banking Services:
Awareness and usage among low income
groups
Awareness Level: 46% (23 out of 50) respondents
only know that they can check balance on telephone
through customer care number provided by bank
Usage Level: 44% (22 out of 50) respondents
Tele- Banking Services:
Awareness and usage among low income groups
Awareness Level: 94% (47 out of 50) respondents
Usage Level: 78% (39 out of 50) respondents
Use ATMs for withdrawal only.
ATM Services:
Awareness and usage among low income groups
No awareness of Financial Literacy Programmes
No awareness of Credit Counseling Centres
Business Correspondent/ Business Facilitator: 50% of the
respondent are in contact with them for funds transfer.
Financial Literacy related banking Services:
Awareness and usage among low income groups
Limitations of the study:
Due to very low financial literacy among
the lower income group collecting data
related to their financial knowledge and
behavior was a difficult task.
They have apprehension that the data
may get misused and hence avoid giving
data.
Road Ahead
Background:
Data collection per respondent taken about an hour.
Daily wage earners feel there is an opportunity cost of
the one hour wasted on data giving.
Hence, If there is a funded research an amount of Rs
50-100 can be given to each person who spends an hour
in understanding the questions and in giving data.
Conclusion:
Though the banks have taken number of
initiatives for financial inclusion but these
initiatives are not approaching at the
bottom at the pace they should be done.
Initiatives which are wider in spread are
really working out like ATMs and Business
Correspondent Model.
The success rate of initiatives will be achieved only when
the marginalized groups of the society build trust and faith
in the system and this faith can be brought in them by
giving them awareness.
Financial literacy play a major role in making them
understand the benefits of the inclusion into the formal
financial system and convincing them to contact the
business correspondents and business facilitators,
common service centers to avoid the trouble of long
queues, waiting time and long distance of the bank
branches.
Spreading the financial literacy will definitely bring a
remarkable change in the system.