India is the second-most populous country in the world. In a recent study, it is also found that out of the seven countries which account for fifty percent of the world’s unbanked people, India stands in second place. Out of the fifty percent, eleven percent comes from India. Thus financial institutions like banks and digital lending platforms can gain more customers if they can attract these unbanked people with their services. The use of innovative solutions like video KYC can be helpful in this endeavor.
Why are people still lacking a bank account?
Although there has been an increase in digitization of services and even implementation of helpful technology like video KYC, many people living in poor and remote areas still lack access to banking and financial services. This is because of the following reasons:
● They make the bare minimum and live completely on their income. This is true for many migrant workers and daily-income laborers. Their income is tiny and the cash they receive is completely spent on their living. As they cannot save up any money, they do open a bank account.
● Many people in India are still illiterate. Thus they lack the proper knowledge of the services provided by the banks and other financial institutions. The fear of being at a disadvantage, having to pay for extra charges, or somehow getting scammed stops them from availing banking services.
● The lack of bank infrastructure in their area. The banking sector has still not covered the entire length of India. Thus the lack of banking facilities makes it harder to do customer verification.
These issues can be solved if banks and local governments try to raise awareness among the public about their benefits. The introduction of video KYC for banks has also allowed banks to verify the identities of people living in remote areas and open their accounts.
How can banking institutions bring benefits to the unbanked?
We can see that a part of the Indian population still lacks access to banking services. Thus if banks and other financial institutions can reach out to them through video KYC or other solutions, they can avail themselves a lot of benefits.
● The increase in the number of customers will allow banks to receive more funds in the form of the money deposited by the unbanked people. This large group can bring in a lot of revenue.
● Banks can understand the needs of the poor and unbanked people more clearly. This data will help them to introduce various schemes that can be benefiting for both parties.
● When unbanked people open bank accounts, they too become a part of the economy of the nation. Thus the government and banking institutions can work together to protect their rights and interests.
This is why technological solutions like video KYC for banks make customer verification more swift and accurate.
Steps that can help banks and other financial institutions to reach out to the unbanked
Reaching out to the unbanked can be an easy task if it is done correctly. Here are a few ideas that can help banks with this task.
● Introduction of digital solutions: Banks can reach out to remote areas if they make use of digital solutions like video KYC India, etc. Through this, unbanked people do not need to travel anywhere and can complete their identity verification remotely.
● Spread awareness of the benefits of banks: Banks can collaborate with local governments and spread awareness regarding financial services. Spreading correct information and solving doubts will attract many unbanked people.
Thus with the help of video KYC India, banks and other financial institutions can try to attract more unbanked people and help avail themselves financial services for their needs.
