digital banking

Banking on the Unbanked

Before we delve into the subject of unbanked and underbanked, here’s a look at some statistics – Seven countries across the globe account for 50% of the world’s unbanked population, and India is second on the list. 11% of India’s population is completely unbanked, and even more are underbanked. Although there has been a decline in figures in recent times, there is no ignoring the fact that a large part of the population still needs to be catered to.

Who is an unbanked or underbanked customer?

An unbanked customer is one who doesn’t have any savings or current account with a bank, owing to which they cannot use traditional banking services either. On the other hand an underbanked customer has access to savings and current accounts, however, these are through alternative financial institutions and not banks.

There are plenty of reasons as to why someone may be unbanked. Some of these being

Not having enough savings
Having concerns about privacy and security
Not wanting to pay bank charges; and more.

But the primary concern, at least in India, continues to be that firstly, rural areas don’t have enough transport facilities to reach the bank. Secondly, the interiors do not have enough bandwidth to support online banking processes, even if the branch is distant.

Why you need to bank on the unbanked?

When banks don’t engage with the unbanked and underbanked, many financial institutions lose out on the opportunity to reach out to them as well, because they don’t appear on the financial map. Additionally, owing to the current digital shift, there is a growing need to reach out even to the hinterlands because digital is the future, and the only way to be all-inclusive is to reach one and all and offer a standardised payment process for all.

Some other reasons why you should focus on the unbanked include:

Higher revenue for financial institutions
Connects you to an emerging market
Safeguards the interests of the lower income groups

Here’s how you can reach them:

Eliminate barriers: Many people from rural areas fear banking, offline or online, because of illiteracy or language barriers. Using technology like chatbots, translators, Neurolinguistic programming, virtual assistance, etc, you can assure your potential customers that they can bank on someone who understands their needs well and is willing to guide them thoroughly with every step of the process.

Reduce physical branches: If the underbanked find it difficult to go to banks, you bring the bank to them. With digital opportunities like Video -KYC onboarding and internet banking, customers don’t need to step out anymore to complete the banking formalities. Promise your customers that the system is completely secure with AI based features like liveliness, facematch, and two-step authentication, so they don’t have any security concerns. At Kwik.ID we noticed that these additional security features in our V-KYC tool made a huge difference while onboarding customers who were worried about their data being misused.

Offer a low-bandwidth facility: How are customers going to opt for digital banking if high data requirements won’t let them complete their procedures? Building a low-bandwidth infrastructure for your unbanked and underbanked population is imperative for noteworthy results. Let media upload sizes be at a minimum, and let your software adjust to data speeds as low as possible. Offering a data speed as low as 170 kbps, we noticed that our Video kYC onboarding call drops reduced drastically and we had an 85% success rate owing to low bandwidth and easy accessibility.

Encourage financial education: Another significant reason why the unbanked don’t invest is because they aren’t aware of banking benefits in the first place. Train your employees and agents to educate them better. They can use digital media in the form of short videos, flowcharts, images and more, to explain the onboarding and banking process, needs for savings, credit application, and many other topics that can easily be conveyed over video. Connect your customers to regional agents who are comfortable speaking the language and can understand the client better. This is necessary especially during the Video -KYC onboarding process, or any other video interaction that makes the conversation more smooth-sailing.

Banking the unbanked isn’t as tough as it looks and doing so has its advantages for both – the banks and the customers too. With the right technology, the right V-KYC tool, and the right goals, the 11% of unbanked India can soon be well-banked and serviced too.

Insights into the Future of Digital Business

The pandemic has irreversibly changed the way we work. “Phygital” seems to be the current scenario and digital the future. Many businesses, however, had already shifted from offline to online processes long before the pandemic while the last six months have witnessed only online transactions and dealings.

Organisations have also revised their business priorities as they strive to find new solutions to accelerate the business pace and find long-term success. Traditional face-to-face methods have been replaced by tools like online wallets, e-commerce business, Video KYC for banks and insurance firms, AI-led instructions and more.

Organisations will soon start building their digital platforms while utilising advanced analytics with greater intensity. For example, DBS Bank understood the need to do more for its customers and adopted a RED mantra: Respectful, Easy to deal with, and Dependable. This involved tech-driven processes because they strongly believe that making banking joyful should involve making the ‘banking’ part, invisible.

Here’s how the country is paving the path for digital business growth.

Digitising Sales and Customer Processes

Businesses have begun to consider digital tools and processes, especially for selling a product and meeting customer process requirements. Companies are adopting and implementing a host of applications, digital payment methods, self-service platforms, digital documentation, onboarding and electronic signatures to ensure that internal operations, income and revenue continue to flow. Even the smallest of businesses have taken to digital to keep the customer inflow intact, by adopting the latest AI technology and tools like face recognition and biometric signatures, and they don’t seem to be going back to their traditional ways anytime soon.

The finance industry, including banks, NBFCs, fintech, insurance and many others now choose online processes to make business easier for customers, including opening an account through video KYC. Customers no longer need to visit the branch to complete all the formalities and fill out extensive forms. Video KYC speeds up the process ensuring they are onboarded in just two minutes!

Digital Marketing to Customers

The way companies market their products is also evolving rapidly. Given that industry gatherings have shut down, B2B companies like Slack and Zendesk have adopted new ways to engage customers via their digital video advertising strategy and generated new business leads. Digital content, especially ads directed via social media platforms need to be data-driven, personalised and displayed to the right customers for a continued boost of sales and marketing. This can also help improve efficiency and ROI.

Empowering Employees with the Right Tools

To ensure that employees reach their maximum potential in these times, it is imperative for companies to adopt technology that makes operations and processes easier and more efficient. Employees need to be educated about the latest technologies and trained on how to deal with new clientele, digitally, for maximum customer satisfaction.

For example, Kwik.ID, our Video KYC tool is enabled with customer queueing facility to reduce customer repetition. The analytics dashboard helps agents manage their time more efficiently. Finally, the Neuro Linguistic Programming software ensures agents understand and guide customers better, and (instantly) resolve their issues.

Using the Cloud for storage of enterprise applications, planning and management, workforce management, billing and many others, not only provides easier employee access to technology but also helps manage cybersecurity better as everything is housed together. It is also important for organisations to have all the documentation and customer data in one place—no matter where the agent or employee is, data can always be accessed remotely and work needn’t stop. At Think Analytics, we recommend working on-the-go, which our video KYC tool enables, by storing all the data in one place.

In the coming months, online tools like digital banking, e-wallets and video KYC can significantly benefit investors, insurance companies and agents, banked and unbanked sectors, non-banking entities and many others. While these tools boost business, they also help battle slow-moving business owing to the COVID crisis while ensuring that work continues seamlessly from anywhere across the globe.