Electronic Banking: The Next Revolution in Financial Access?
This paper identifies factors that limit the success and growth of e-banking initiatives in India.
The paper states that technology necessary to implement e-banking has been available for a long time. Careful examination of the failure of most e-banking initiatives usually traces it to one or more of the following three reasons:
- Inadequate customer value proposition for end users;
- Poorly developed business case for collaborating companies;
- Debilitating environment.
Robust e-banking systems are ideal to serve the Indian market, which requires the management of high volume of low value transactions. Mobile banking has the potential to play a significant role in financial inclusion given the growing penetration of mobile phones and low cost of mobile telephony in India. The paper states that banking solution providers are only going to be successful in the short term if they concentrate on areas where cash is inconvenient and the e-banking solution can provide services that cash cannot offer. In order to do this effectively, they need to invest time and effort in understanding the market and building the value proposition and business case.
