a

1
Banking
for the
Urban Low-Income Group
Guide Prof. Ravi Poovaiah
Project for FINO (Finance Information Networks
and Operation)
Shashank Khanna M Des (Interaction Design) IDC,
IIT Bombay
2
Overview
What ?
Why ?
How ?
Needs Opportunities
Research Design Process
Design Prototypes Scenarios
3
Why? I Needs
Lack of Suitable Financial Product
Under Served, Un Banked
Lack of Delivery Capacity
4
Why? I Opportunities
The Next 4 Billion Market
Financial Inclusion Plan
ICT4D
5
How? I Research
Interfaces for Low Literates
Literature Study
Banking Theory
Financial Institutions
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Macroeconomics I Financial Exclusion
Poor, Uneducated, Old, Children, Women, Ethnic
Minorities, Unemployed

Dr. K C Chakrabarty, Indian Bank, Chennai
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Macroeconomics I Financial Inclusion

Dr. K C Chakrabarty, Indian Bank, Chennai
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How? I Research
Contextual Inquiry
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How? I Research
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How? I Research
Contextual Inquiry
User Profiling
Financial Needs
Financial Institutions
Problems
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User

• Urban

• Low Income Group

• Low Literate

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User
Occupation
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User I Residential
Local

• Usually have Photo ID and Residential Address
  proofs- Ration Card, Electricity Bill, Election
  Card, PAN
• Card etc.
• They get benefits of local domicile.
• Their attitude towards migrant workers is- Ye
  UP, Bihar ke log bahut chalu hote hai, sab humari
  naukri
• khate hai
• They are comfortable with Local language.

Migrant Workers

• They usually have Residential Proof of their
  home state, which is not valid in other state.
• They prefer to stay in a community of people
  coming from same location.
• Local language become a big trouble for them.

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User
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User I Finance
Income

• Typically user income ranges from Rs 3000 to
  Rs 8000 per month.
• They get income as Daily wages or Monthly
  salary.
• Some people get salary in two breakups- Advance
  salary on 25th and balance salary on 10th every
  month.
• Non taxable income.

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User I Finance
Expenditure

• Carry a cash of Rs 50 to Rs 200 in pocket
  everyday.
• They get salary as Cash or Cheque.
• They prefer to accept cash and make all
  payments in cash.
• Major expenditure is on basic amenities like-
  daily travel, ration, rent etc.
• Usually maintain a credit account (Khata) in
  ration shops.
• Festivals bring over expenditure.
• Trust family for financial activities.
• Seeks financial advice from their employer.
• Males spend around 40-50 rupees per day in
  drinking, they have become habitual.

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User
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User I Occupation
Formal Sector
Government Job, Private Job like Security
Guard in IIT

• Have better safety of Job.
• Salaried employees and have savings like
• PF etc.
• Employer takes care of medical needs.

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User I Occupation
Semi Formal Sector
Jobs under a contractor like construction
labor under Godrej Constructions.

• Have constant risk of losing job.
• Get income as daily wages or monthly
• salary.
• Get a bonus of one salary.
• As per government regulations, employer
• provides an insurance cover like- ESI
• insurance.

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User I Occupation
Informal Sector
Unauthorized jobs like Vegetable seller,
Hawker

• Seasonal nature of job.
• High risk of loss like-
• I purchase a pineapple for Rs 23 and sell
• it for Rs 25, I just earn Rs 2 as profit and
  if
• the pineapple gets spoiled, I lose all the
• money
• Municipal authorities and police charges
• fine.

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User
Occupation
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User I Literacy

• Five levels of functional literacy
•  
• Level 1 indicates persons with very poor
  literacy skills they have some alphabetic
  knowledge,
• but they cannot use this knowledge in a
  functional manner.
•  
• Level 2 persons can deal only with text
  material that is simple, short and clearly laid
  out.
• Therefore reading and writing tasks for this
  group should not be too complex.
•  
• Proficiency on level 3 is considered to be a
  suitable minimum for coping with the demands of
• everyday life and work in a complex literate
  society. This level requires the ability to
  integrate
• several sources of information and solve more
  complex textual problems.
• Levels 4 and 5 describe persons who demonstrate
  command of higher-order information
• processing skills.

International Adult Literacy Survey, (IALS)
(Murray, Kirsch, Jenkins, 1998), Cognitive
Abilities of Functionally Illiterate Persons
Relevant to ICT Use
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How? I Research
Contextual Inquiry
User Profiling
Financial Needs
Financial Institutions
Problems
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Financial Institutions
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Financial Institutions
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Financial Institutions I Bank
Services
Primary activities include borrowing and lending
money.
Banking Theory and Practice- Prem Kumar Srivastava
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Financial Institutions I Bank
Services
Primary activities include borrowing and lending
money.

• Fixed Deposits
• Saving Bank Deposits
• Current Deposits
• Recurring Deposit Account

Banking Theory and Practice- Prem Kumar Srivastava
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Financial Institutions I Bank
Services
Primary activities include borrowing and lending
money.

• Cash Credit
• Over Draft
• Loans

Banking Theory and Practice- Prem Kumar Srivastava
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Financial Institutions I Bank
Services
Primary activities include borrowing and lending
money.
Banking Theory and Practice- Prem Kumar Srivastava
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Financial Institutions I Bank
Services
Primary activities include borrowing and lending
money.

• Collection and Payments
• Execution of Standing Orders
• Collection of Dividend and Interest
• Purchase and Sale of Securities
• Transfer of Funds from one Bank or Branch to
  Another
• Acting as a Trustee or Executor
• Acting as Agent, Correspondent or Representative

Banking Theory and Practice- Prem Kumar Srivastava
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Financial Institutions I Bank
Services
Primary activities include borrowing and lending
money.

• Letters of Credit
• Foreign Exchange
• Safe Custody of Valuables and Securities
• Acting as a Referee
• Information and Statistics
• Underwriting

Banking Theory and Practice- Prem Kumar Srivastava
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Financial Institutions I Bank
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Financial Institutions I Bank
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(No Transcript)
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Financial Institutions I Bank
Bank User Group

• Person who can not sign is an illiterate.
• Rules to be properly explained to them by
  officer.
• LTI should be attested in the account opening
  form by introducer.
• Identification proof as per KYC norms.
• No cheque book to be issued.
• All transactions should be witnessed by some
  other customer in bank.
• Transactions more than Rs 5000 should be through
  manager with oral confirmation.
• Account marked as high risk.
• Passbook is verified by photo, not the LTI.
• Opening of Joint account with a literate should
  not be a matter of routine.

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Financial Institutions I Bank
Why Not ?
User Group - Bank

• Financial constraints restricts them from
  opening bank account.
• Not aware of banking benefits.
• Someone in family has a bank account.
• Dependency on others for literacy work.
• Not familiar to banking formalities and
  processes.
• Bank does not open their account due to lack of
  ID proofs.
• Banking services and channels dont solve the
  real needs.

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Financial Institutions I Bank
Frauds
User Group - Bank

• Corruption.
• People submit duplicate documents.
• In village agent made few people open the
  account, and 3 months later he ran away with all
  the money
• and he never opened any account in any bank for
  them.
• Fraud agents make people fool under the cover of
  formalities and papers, but these people can't
  read
• so they dont understand much, just listen to
  them, get convinced and pay money.
• Afraid of ebank accounts as he read fraud cases
  in newspaper or through friends.
• Staff cheats in manual branches.

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Financial Institutions I Bank
Why banking?
User Group - Bank

• Employer opened the bank account as he pays by
  cheque.
• Safety and Savings- Bank mai rakha rahega to
  samjho punji hai.
• Had collected some money, so opened a bank
  account.
• Government benefit schemes deposit money to bank
  accounts.
• Village pradhan suggested to open a joint bank
  account.

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Financial Institutions I Bank
Rules and Regulations
User Group - Bank

• Not aware, has never been told.
• Not aware of bank branch numbers.
• Different banks have different fees.
• Policies are not transparent.
• Confused- Debit card is credit card.
• Will ask someone who has a bank account.
• Dont get update notifications of changes in
  rule.

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Financial Institutions I Bank
Formalities
User Group - Bank

• Too many formalities are confusing.
• Learn basic processes like filling up the slip
  to deposit and withdraw money.
• Directly goes to the known staff, gives him
  cheque, and takes cash from his counter.
• Bank asks for 100 different questions and
  paperwork to give loan.
• Wrong information means big error.
• It takes around 30 minutes in a bank.
• Bank timings and staff behavior is not
  cooperative.
• Fill so many forms and slips.
• Updates passbook regularly, but difficult to
  trace transactions.

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Financial Institutions I Bank
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Financial Institutions I Bank
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Financial Institutions I Bank
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Financial Institutions I Bank
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Financial Institutions I Bank
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Financial Institutions I Bank
POS (Point of Sales) Banking Facilitators
Financial Inclusion
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Financial Institutions I Bank
SBI Biometric Accounts
Financial Inclusion
"Thumb impression of the customer will be
captured on the electronic chip in the card and
the account will be operational once he swipes
it, so even the under privileged can withdraw
money,"
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Financial Institutions
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Financial Institutions I Credit Societies
Easy loan of 10,000
Miscellaneous Services
Miscellaneous Services

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Financial Institutions I Credit Societies
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Financial Institutions I Credit Societies
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Financial Institutions I Credit Societies
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Financial Institutions I Credit Societies
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Financial Institutions I Credit Societies
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Financial Institutions I Credit Societies
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Financial Institutions I Credit Societies
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Financial Institutions I Credit Societies
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Financial Institutions
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Financial Institutions I Post Office
Fill the slip before
Miscellaneous Services
Miscellaneous Services

Dr. K C Chakrabarty, Indian Bank, Chennai
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Financial Institutions I Post Office
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Financial Institutions I Post Office
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How? I Research
Contextual Inquiry
User Profiling
Financial Needs
Financial Institutions
Problems
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Problems I Savings
Bank Business Facilitator ATM Mobile
Open a savings account Write in 388 fields (6 Pages form) One page form with essential info   Agent keys info in mobile
One error means, refill the form Fills the form for client  
Go to bank branch to submit the form Can do it on behalf of customer  
Don't understand banking terms and declaration  
Address Proof is of home state, not accepted in other states Relaxed KYC- Election Card  
Bring two witness and one introducer to open an account  
One week to open an account after address verification Can get the a/c open in few hours  
Minimum balance of Rs 500 Zero Balance Account  


Account Information Go to bank with passbook- takes time Gives Receipt (fades in one week) Difficult to understand transactions in mini statement
Difficult to understand abbreviations in English No account statement  
 
 
Account Authorization Thumb impression in presence of one witness Swipe Biometric Smart Cards Forget PIN no., account gets blocked Takes a long time to get user name and password
people can fake signature Machine asks agent to put finger right hand ring finger, left hand index finger on scanner Takes one month to get ATM card and PIN no. separately Additional password for transactions

Deposit/ Withdraw Cash Always fill a slip, without errors Minimum Withdraw of Banknote of Rs 100
Go to bank and stand in line Doorstep accept/gives cash Minimum Deposit of Banknotes Rs 100, 500, 1000
Micro-value transactions not allowed like Rs 10, 20 Allows micro-value transactions Deposit Each note one by one
Frequency of visiting bank is less Comes daily at mutually decided location Go to ATM for transactions
  Daily transaction limit of Rs 5000  
Update in A/C in one hour Delay in A/C update Problem with MDM- accepts cash without updating account
Operates in fixed time of 9am to 5pm, lunch timings coincide with customer lunch timings Customer can come to agent in case of emergency withdrawal or deposit, but depends on Agents availability ATM machine- out of order or NO 100 rs banknotes available in machine
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Problems I Remittances
Remitter Bank Business Facilitator ATM Mobile Post Office
Register beneficiary Party Beneficiary A/C no. and Bank Name must be known Verbally tell agent the beneficiary a/c details Select pre registered user Self Key In Beneficiary Details with a/c no and bank details Fill a MO form, with remitters residential address
IFSC code of the receiving branch

Deposit Cash Go to that particular bank No need to fill slip, agent accepts cash Same as above No Cash Transaction
Fill the slip and stand in queue

Transfer from a/c RTGS Authorization from remitter bank Agent does it through remitter account Self Service, Interface is confusing Self Service, Interface is confusing
Must to have an account for both Must to have an account for both in same bank Must to have an account for both Must to have an account for both

Transfer Takes approx 1 hour for clearing and transfer in same bank Takes 24-48 hours for clearing and transfer Immediate transfer Immediate transfer
Takes 48-72 Hours for clearing and transfer
Extra charges for third party transfer 20 Rupees extra for intra bank transfer
  third party transfer not available

Notification Debit shows in Passbook entry without details Debited amount in receipt
Problem in tracing the status of clearing No account statement

Beneficiary Bank Business Facilitator ATM Mobile Post Office
Notification No personal update No personal update No personal update Possibility of personal update
Go to bank, and ask the officer Account balance in receipt Account balance in receipt
passbook update Confusion in understanding- actual balance and withdraw balance

Withdraw/ Accept Cash Go to Bank a/c to withdraw Ask agent to withdraw money from your a/c Go to atm to withdraw cash Doorstep delivery of cash by postman
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Problems I Credit
Bank Business Facilitator ATM Mobile
Apply for loan Problem in filling a detailed form Agent fills the form at doorstep Possibility of applying for loan
Bring a guarantor known to bank
Explain the reason for taking loan Explain the reason for taking loan
As per strict KYC norms, many ID proofs are required, which they dont have like salary slips etc Relaxed KYC norms, Election card works as ID proof one address proof pre submitted biometric identity
Verification of address proof Agent knows personal address
eligible if you are a Salaried individual of good quality corporate, self employed engineer, doctor, architect, chartered accountant, MBA with minimum 2 years standing.  Real-time processing of loan applications within 24 hours

Amount Minimum loan of Rs 24000 in Urban Areas UBI launched Shobagya and Bhagya Loan schemes
Minimum loan of 10000 in rural/ semi-urban Small loans starting from Rs 3000 to 10000 available

Payback maximum 48 Installments Easy Repayment in micro-amounts weekly Transfer from a/c to loan a/c Transfer from a/c to loan a/c
Penalty on late payment penalty on late payment after grace period


Security Mortgage Minimum deposit of Rs 5000 for the first time in Bank a/c
Guarantor

Withdraw/ Accept cash Bank usually gives a cheque Agent delivers cash from loan a/c
Bank opens a new loan account
Difficult to keep a track of new account

Notification No reminder of dew date from bank Agent personally reminds No reminder of dew date Possibility of reminding
Agent maintains log of transactions

Credit Scoring Bank does a detailed credit scoring of a customer on social, physical, salary characteristics etc Agent does a detailed credit scoring based on set parameters
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How? I Research
Contextual Inquiry
User Profiling
Financial Needs
Financial Institutions
Problems
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Financial Needs
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Financial Needs I Savings

• Wants a secure future for his children.
• Jo kamaya pariwar mai lagaya.
• Joint family elders are there to take care of
  emergency needs.
• Shares his PIN no. with wife and nephew.
• limits his spending so as to save money to send
  home.
• Gives all money to wife.
• Wife has instructed bank to not give cheques,
  extra money to husband.

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Financial Needs I Savings

• Monthly savings are minimal as nothing is left
• FD kya karne ka..itna parivare hai khana kha se
  khayege
• Low income, so do small savings as cash at
  home.

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Financial Needs I Savings

• People in formal service sector have some
  financial backup, and get pension after they
  retire.
• Parental property- agricultural land at home.
• Prefers to invest money in small property in
  village.
• Does not have any backup if require large cash
  in times of emergency.
• Investment in Gold is not preferred.

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Financial Needs I Savings

• Parents have made some savings in his name, but
  he is not aware of them.
• Dad has some parental property in village, he
  died so I am not aware.
• Wife secretly saves some money every month.

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Financial Needs
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Financial Needs I Remittances

• Migrant Workers.
• Sends Rupees 2000 to 2500 per month.
• Sends Every month or once in two months.
• Sends money as soon as they get salary.

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Financial Needs I Remittances

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Financial Needs
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Financial Needs I Credit

• Take small loans like Rs 100, Rs 700, Rs 2000
  for daily needs.
• Big Loans- Rs 5000, Rs 10000, Rs 50000 etc. for
  emergency needs.
• Take loan of Rs 50000 to purchase land in
  village.

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Financial Needs I Credit

• Take small loans from employer.
• Take loans from local moneylender.
• Relatives and Friends.
• Financial Institutions- Bank, Credit Society
  etc.

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Financial Needs I Credit

• Employer deducts small amount every month from
  salary.
• Easy to pay back to relatives.
• Escapes Interest on loan.
• If you dont pay back, relationships get
  spoiled.
• Mutual trust is must.
• Auto Debit from savings account.

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How? I Design Scope
Project Sponsor FINO
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Case Study I FINO
81
Case Study I FINO
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Case Study I FINO
Go to FINO Branch Agent Fills the form Election
Card Photocopy
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Case Study I FINO
Re types the entry in mobile application
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Case Study I FINO
Instant photo capture
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Case Study I FINO
Mobile is connected to POT for updating Biometric
Finger print details
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Case Study I FINO
All the data is uploaded to FINO server. Server
responds back with A/C information
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Case Study I FINO
Biometric smart card is printed immediately
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Case Study I FINO
MDM Machine Only Deposits 100, 500, 1000 Rs Bank
notes If transaction fails, money doesnt come
out
Working Machine
Demo Machine
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Case Study I FINO
Agent visits regular customers daily Less
frequent users come to agents house Social
networking
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Case Study I FINO
No symbols to help user identify which finger to
put, so agent puts their finger on biometric
sensor
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Case Study I FINO
Printing on the slip fades away Customers
through away the slips No account statements To
trace back some past transaction, user has to
contact FINO
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How? I Design Scope
Design Scope
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How? I Design Scope
FINO Mitra (Mobile Based Information and
TRAnsactions)
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Channels
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Design I Scope
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How? I Design Scope
Suitable Product
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Design I Scope
Zero Balance Savings Account
Withdraw
Deposit
Account Info
Authorization
Transfer
Beneficiary Account
- Biometric - PIN- Password - Signature
- A/C No. - Statement - Receipts- Alerts - Agent
meeting
Withdraw
Deposit
Loan Account
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How? I Design Scope
99
How? I Design Scope
Open a new Account
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Design I Scope
Apply for Account
I want to open an account ??
Transfer Information
Fix meeting
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Design I Scope
Open Account
URN No.
Authentication Key
Biometric Details
Photocopy of ID Proof
Account Details
Account Info
Clicks Picture
Enrollment on agents mobile by typing all details
Sends to server
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(No Transcript)
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Design I Scope
Account Information
Alerts
Receipts
Statement
Meeting with agent
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Design I Scope
Deposit Cash
Meeting with agent
Confirmation
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How? I Design Scope
Deposit 10 Rupees
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(No Transcript)
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Design I Scope
Deposit Cash
Updates A/C info Statements Receipt
Receipt
URN No. Voice Biometric
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Design I Scope
Withdraw Cash
Updates A/C info Statements Receipt
Receipt
URN No. Voice Biometric Amount
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Design I Scope
Remittances
Register Beneficiary Account Select
Beneficiary Account Amount
Account Info Update Alert
Withdraw
Receipt Account Info Update
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Design I Scope
Loan
Amount
ID Proof
Purpose
Loan Scheme
Contact for Loan
Enrollment
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Design I Scope
Loan
Approved
Account Info Update Pay Back Details
Pay Back Dates
Collection
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How? I Design Scope
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How? I Design Consideration
Design for low cost basic mobile phone on which
external applications can not be installed.
Use of Audio based interface.
Users prefer Instructions.
Use of Voice Green Key Red Key Numeric
Keypad as input.
Design for Small Screen sizes like 128 x 128,
128 x 160
No text Input.
Output display in local language and numbers.
Use of Voice Biometric for authorization.
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What? I Design
IVRS Application
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What? I Design
116
What? I Design
IVRS (Low Fi Prototype)
117
What? I Design- IVRS Flash SMS

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Speak
Dial XXXX
FINO ??? ???? ?????? ??
1
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2
3
4
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vyaigt ?? ??? ????? ?????
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???? ??
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??????? 2009 ?? ?? ????? ?????? 0. Next Five
Speak on Phone
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Confirm
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Speak Amount
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Confirm
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FINO ???? ??????? ???? ?? ?? ?? ??? ??? ??? ??
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Prototype
FINO ???? ??????? ???? ?? ?? ?? ??? ??? ??? ??
??? ??? ???? ???
118
What? I Design- IVRS Flash SMS
IVRS Flash SMS
119
Low Fi Prototype
120
Low Fi Prototype
121
What? I Design- IVRS Flash SMS
122
What? I Design- IVRS Flash SMS
Prototype
123
What? I Design- IVRS Mobile Application
IVRS Mobile Application
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Low Fi Prototype
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What? I Design- IVRS Flash SMS
Prototype
126
What? I Scenarios
Transfer Rs 100 /- to Shyam
Loan Payback
Account Statement
127
Future Scope

• Addition of more personalized banking services.
• Scope for addition of more menus with changing
  needs.
• To analyze this application and scale it further
  to make it suitable for universal access.

128
Acknowledgements
My Sincere Thanks to Prof. Ravi Poovaiah Prof.
Anirudha Joshi Dr. Ajanta Sen Indrani Medhi
(MSR), Sanket Magarkar (SDD) , Dr Anil Gupta
(IIM-A) FINO- Mr. Sanjay Kuberkar, Mr. Kamal
Rastogi, Ms Nediba , Mr Yogesh, Mr Kamlesh
Singh Canara Bank- Mr M S Suresh Friends at IDC
(Arun, Dhyan Suman- IVRS, Hrushikesh, Sumeet,
all_at_idc.iitb.ac.in) Descafe Rocks Sachin and
Santosh Bhai