The Indian government launched the Digital India initiative on 1st July aimed at three key areas: a) Digital infrastructure as a utility to every citizen, b) Governance and services on demand and c) Digital empowerment of citizens. Connecting each and every citizen of the country to the digital network is an imperative for India and while it is long overdue, there are significant challenges to overcome. Key industrialists have given strong backing to this ambitious project, committing INR 4.5 trillion in investment. Financial inclusion through digital banking is a key component of this initiative as citizens across the country will be connected to the transactions and services network. However, as noted in a recently released CGAP report, Doing Digital Finance Right, "many users are not only new to both formal finance and technology, they also live precarious financial lives that allow little room for error." The systems set in place now must address the main concerns that customers may potentially have. Here, the onus does not lie solely on the government, but on all stakeholders in the financial services and telecom sectors. The CGAP report authored by Katharine McKee, Michelle Kaffenberger and Jamie Zimmerman analysed research findings from sixteen countries to conclude that there are seven key consumer risk areas:
Inability to transact due to network/service downtime
Insufficient agent liquidity or float, which also affects ability to transact
User interfaces that many find complex and confusing
Poor customer recourse for grievances and queries
Fraud that targets customers
Inadequate data privacy and protection
Policy makers, regulators, financial and telecom service providers must all coordinate their efforts to ensure that trust is built in these emerging digital transaction modes.
Section I: Policy – the latest from India's policymakers
The Indicus Centre for Financial Inclusion was launched in 2011 to distil and disseminate information on accelerating the poor’s access to high-quality financial services. The Centre is supported by the Bill & Melinda Gates Foundation. http://www.indicus.net/icfi