Question

A report published by the Internet and Mobile Association of India (IAMAI) suggests that mobile connectivity and internet penetration is low in India. In this context, how can banking using Television (TV) help in “banking the unbanked”

Answer 1

Approach

• Introduce the problem of low internet penetration and how it is taking a toll on financial inclusion
• In the next section briefly mention the problems faced by banks and its consumers in rural areas specifically due to connectivity issues
• Explain how banking with the help of television has its advantages that circumvent the disadvantages posed by online banking

Financial inclusion broadens the resource base of the financial system by developing a culture of savings among large segment of rural population and plays its own role in the process of economic development. Internet and mobile connectivity has played a key role in promoting financial inclusion; however, challenges still exist.

Internet penetration in rural India is only 17 % of which 97% of consumers use the internet through their smartphones. However mobile connectivity still remains patchy and inconsistent. This is a major issue that leaves financial inclusion out of the purview of many rural families.

Issues

• Mobile phones are usually bought and used by the breadwinner of the family.
• It’s use even now is limited to personal calls and conventional internet browsing and mobile banking or internet banking has not caught up.
• Inconsistent connectivity is another issue that plagues rural banking connectivity.

Television Banking (TVB)
Television Banking refers to the distribution of banking services through specific TV channels, using the remote to enter banking information.
One-third of the top 20 European banks offer some form of TV-based banking services. Nordic countries in particular have a very positive outlook for iTV banking. The Swedish Bankers’ Association predicts that in five years, 95 per cent of the Swedish population will be able to use interactive digital TV for banking. Thus globally, there has been interest in TV as a viable service delivery channel and it has huge potential in India. The set-top box system makes it easy to identify the customer and distribute customer specific banking solution.

• Television is usually the first electronic item bought for the entire family. Power supply is usually ensured round-the-clock to the TV system. There are connectivity problems with the mobiles and handsets that Banking correspondents carry but families ensure, even if through the use of inverters, that electricity supply for television is available.
• Television is used by all the members of the family which ensures that the culture of “financial inclusion” is spread across the family.
• TVB makes it very easy to deliver banking solutions in any language according to the customer’s choice. . The use of the local language will enable a more interactive environment for banking, and would help in increasing trust in the system in sharp contrast to BCs who are perceived as temporary salespersons because of the high attrition rate.
• TVB can also include voice commands captured by the TV set sent to banking servers for further processing. Voice input will not only make transactions easier, but also provide greater security and authentication thereby reducing frauds.
• TVB in the comfort of the home will increase the overall adoption of banking habits, making financial inclusion viable.

Financial inclusion also mitigates the exploitation of vulnerable sections by facilitating easy access to formal credit. This promotes their empowerment and well-being and promotes economic and social justice as envisaged in our Constitution.
Once appropriate technology is achieved, TVB has the potential to serve the masses at low cost and mobilise resources for the formal financial sector.