Status of mwallets post demonetisation

The day the breaking news on demonetisation flashed across the media, Indians were left flying high and dry in a frenzy. We Indians, hitherto use paper money to meet our daily chores or for daily mundane activities.

Post demonetisation, scarcity of cash did lead consumers to a hard time queuing up in front of ATM’s or bank counters for withdrawal of cash. This inadvertently forced many Indians to fall in line with government’s initiative for a push towards more electronic transactions. The net result being that consumers have been quick in adopting mobile wallets as an easy and alternate solution for making payments through the digital route.

The demonetization drive is expanding the reach of the mobile wallet companies with active participation both in urban and rural India.  Also the fact that Telecom Regulatory Authority of India (TRAI) has allowed mobile wallet companies the permission to use (USSD) unstructured supplementary service data has helped to ease out making online payments for smartphone users.

Making most of this digital wave, mobile wallet companies are expanding their reach to both urban and rural parts of the country. Most mobile wallet service providers have been making quick inroads and making hay while the sun is shining by facilitating electronic transaction smoothly so that people get familiarized quickly especially with the scarcity of cash around.

Paytm claimed to have made transactions worth Rs 120 crores as on 22nd November – a mere 14 days post government’s announcement on demonetisation. Other ewallet service providers also have hugely benefitted and are busy pushing boundaries to the limit.

MobiKwik is claiming 20 times higher growth in terms of transactions carried out on its platform. Further, the company has entered into a contract with NHAI enabling commuters to go cashless towards payment of toll fees using its ewallet services at 391 toll plazas across pan India. Another company that is targeting the rural areas is Oxigen which allows consumers to cash in and cash out. The company, in particular, has been a huge success in Bihar.

The scarcity of physical cash has led people to opt for transactions using the digital medium. The process of switching over from cash to digital platform has been smooth unexpectedly. People have a lot of reservations earlier as they think it to be cumbersome for usage purpose but having adopted the system once, they found it not only simple but feel empowered too.

It is heartening to note that small traders in Delhi which include tea sellers, vegetable vendors have started accepting payments via digital mode which includes mwallet too.

According to Assocham, mwallets are likely to command half of the market share in the mobile payment segment in the next five years. Taking a leaf  from the above market trends, Senrysa Technologies is on a verge of coming up with an in-house designed and developed mwallet app called Payskp which will redefine the contours of mobile wallet application.

The app is built using a robust technology offering transactions both online and offline on its platform. The app is not only unique but one of its kind among the competition. The prime objective of Senrysa behind this innovation is to make customer’s life easier while making electronic payments safe and secure.

 

How Enterprise Mobility is Transforming Finance and Banking Industry across the globe

Global economy has gone through paradigm shifts over the last few years. Banking and Finance known as the two most significant factors of economy, have also inevitably gone down the hammer of change and transitions. Traditional methods like customer visits to the offices have updated with the inclusion of mobile device operations. In the US, banks have reported to have 53% of mobile usage in customers. While in most Asian and European nations, customers have shown strong preference in using apps, online payment and transaction tools. According to a demographic survey, people in the age group of 25 to 35-year-old have been found to be the heaviest mobile device users across the globe (for banking and finance related actions).

Workplace environments have also transformed drastically with quicker engagement brought about by enterprise mobility. Some of the advancements that have taken place (due to enterprise mobility) in banking and finance domains over the years have been discussed here:

Significant transformations in banking brought about by Enterprise Mobility

Advanced mobile banking facilities have resulted in the successful journey of enterprise mobility. Some of the most significant changes brought about by enterprise mobility in in finance and banking sectors are:

• Technology-friendly customers using Mbanking services remain updated on the bank’s latest offerings, financial services and various together important details.
• Bank employees have upgraded themselves by using smartphone and tablets instead of desktops and laptops.
• Banks tie up with IT and mobile app development organizations to bring out apps that empower customers to carry out faster and more efficient account management across all locations.
• Numerous security checks make it easier for customers to continue performing secure banking and finance related transactions around the world.
• Customers use their mobile devices to execute important financial processes and actions through mobile apps and websites run by financial agencies and banks.

A yearly survey carried out by Bain & Company quite rightly brings out the actual facts and figures of mobile banking and its penetration around the world.

Source: www.bain.com

• Bain’s findings suggest a steep rise in mobile banking customers in the US from 21% in 2011 to 32% in 2012.
• Growing number of young entrepreneurs have given rise to greater shifts in mobile banking in the US.
• Asia has reportedly witnessed a high percentage of mobile banking’s penetration in the phase between 2011 – 2012.

There are more than 7000 US financial institutions offering specialized mobile banking services to their customer base. Industry insiders have suggested the percentage of smartphone and tablet banking for financial management to increase with each passing year.

In another report (a collaborative effort) published by Cognizant and Monitise, customer benefits, banking services, customer expectations and customer preferences are likely to undergo proper categorization to be carried out by financial establishments.

To sum it up enterprise mobility has spread its reach far and wide in banking and finance sectors. With continuous surveys being carried out the message seems to be clearer and louder – Banks and financial institutes need to keep upgrading themselves in order to get a stronger grip on mobile-friendly customer bases. Mobile banking and enterprise mobility processes are inter-connected and their collaborative efforts will reflect on global economy.

Senrysa Technologies has numerous enterprise mobility efforts and operations to its name. It has collaborated with private and public banks. Its own workplace environment is also in line with enterprise mobility quests.

Agency Banking and its immense financial possibilities in the emerging markets

With massive growth, reach and extent of the financial services taking place in the emerging markets, traditional banks are posed with serious challenges. With numerous semi-urban and rural regions facing a perennial problem of no banking set-up or infrastructure, there has been a rise in third parties such as agencies to encroach these markets to promote and spread the wings of financial services and products. Banks tend to depend on agents in order to define financial inclusions and opportunities. In the last decade we have witnessed the massive growth of agency banking. Developing nations in Asia and Africa have greatly benefited from the agency banking model. With the new dawn of cashless transactions and e-wallets setting in, banking agents are fast becoming initiators in increasing electronic banking habits and enabling people to increase their habit of using electronic money.

What do we understand by Agency Banking?

An agent is an individual, an organization or a group of individuals having easy access to the local community. These volunteers take advantage of their local knowledge, reach and expertise to gain praiseworthy client bases for banks.

Agents become important financial advisers to their clients. They take forward banking services and heighten the business reach in numerous regions.
Advantages of Agency Banking

In the current line of action, banking agents take care of signing up new clients, extending sales and support services on behalf of the banks. This quickens banks’ reach.

However, as technological advancements take place, the current role of agencies will go through dynamic changes and variations. Banks would be able to offer numerous services such as deposits, loans and mortgages to its wide client bases without having to invest on bank branch set-ups.

Huge infrastructure and set up costs would be curtailed with technological inclusions in agency banking. Investing on agents will be a huge leap of faith. Emerging markets will give rise to more entrepreneurs as agents will receive better training, education and support. Clients will enjoy a more personal communication with certified financial services providers. Individuals will be able up-sell products and services in the local markets. Communities will benefit greatly from highly skilled agents providing new-age financial products.

This will improve the overall economy of a region thus ushering complete growth and improvement of a nation in the long run.

With increased extent of agencies in the financial market, banks will have increased market share that will form a brighter local economy. As we all are aware of the fact that without self-sustained local economies bigger economies do not work efficiently. With advanced economic growth we will have an open market for emerging trends.

Problems Faced

There have been several impediments in agency banking’s path. One of the most common problem is its non-integrated status as a banking platform. This creates a massive problem for banks who have to invest on multiple local representatives to engage in providing services to their customers. Interoperability is a growing need for smooth running and improvement of economies.

Banks must provide all necessary support and training to its agents in order to have substantial growth. Investment from banks’ end must not be taken lightly, nor should the power of agency banking. Proper assistance provided to agents will ultimately help bring in business for banks.

The process of money distribution must be improved as it will help agents work more efficiently. There are mobile apps being developed by banks to improve distribution procedures. Currently agents have to rely on core banking. Without technological innovations banks are falling short of introducing new products and catering to the growing market needs.

Agents suffer from low-liquidity. Banks must be able to improve liquidity issues in order to serve customers during national holidays and religious celebrations. Banks must support cash inputs to help agents have a balanced operation even during ‘cash-out’ scenarios.
Probable Solutions

An inter-operability model must exist for agents. This will be able to sophisticate the entire process of agent performance, calculation of agent collections, overall monitoring of functionality, agent commissions and distribution of financial services and products. Inter-operability among agents will also make way for an easy solution market wave.

With ever-changing trends (and shifts) taking place in the financial markets, traditional banks need to come up with faster and better technological innovations to introduce and expand new products with the help of agents.

Technology can give rise to better client support

Localities having zero access to main roads and communications need to have technological support. This will help agencies to grow their networks. Banks (will have numerous e-branches for better distribution and configuration of its services and products) will benefit greatly along with the benefits of agencies.

With proper technological support and integrations, agency banking will be more than a mere cash deposit, withdrawal and client listing system. Accuracy in technological support systems will usher a new era for agency banking as agents will have better growth with the help of specialized e-commerce oriented products and services.

Benefits of agency banking will ultimately benefit banks as the latter will win significant market shares.

Immense possibilities of Agency Banking in the Future

Emerging markets are untapped territories of immense financial possibilities. Agency banking has potential bright future as various communities will be empowered with a wide variety of financial services.

According to recent industry reports, there are ten times more registered agents spread across numerous areas than bank branches in some of the world’s topmost mobile money markets. This gives us a clear picture as to what the complete potential of the advantages of agency banking can lead us to. Banks need to invest on technological innovations in order attain greater heights in the fast-changing market needs.

Agencies will become ‘proxy banks’ in the near future. Technological innovations are already in place and with time there will be a time when agents will be the direct selling point for specialized businesses and products. Local development is important for overall stimulated economic growth.

People living in geographically challenged regions will have no need to travel distances in order to get to bank or perform any kind of crucial banking.

Banks will definitely have heightened importance and a scaled business presence with the help of properly structured agency banking. People will enjoy banking in the comforts of their homes, without having to go to a bank. Agency banking will also heighten the use of electronic money.

Top trends in BFSI sector

BFSI future in India is heading for some exciting times despite going through a transformative stage post demonetisation. Amidst all the difficulty that continue to hamper the current operational environment in the short run, engagement with technology remains a top priority for banks and FI’s as they continue to develop and expand to increase their reach to the masses.

As India’s economy grows, rupee continues to gain prominence and gets internationalized and therefore the engagement of our banking and financial institutions with the global financial corporations remains an all-time high. This translates into technology and analytics playing pivotal role for improving risk management in the country.

According to ASSOCHAM Eco Pulse (AEP) study, India ranks at sixth position in terms of efficiency, productivity and soundness, when compared to its counterparts – 11 banking institutions of emerging economies. The fact that it has remained largely insulated from the fallout of ongoing global financial crisis does indicate the robustness of our banking sector.
The net worth of Indian Banking industry stands around Rs 81 trillion and with a push on digitization displays the seriousness and positive intent of the government in ensuring utilization of the internet platform to the hilt when it comes to serving its customer base.
According to KPMG – CII – report by 2020, India is poised to become the fifth largest banking industry and perhaps the largest by 2025. The steps taken towards expanding the banking sector along with the digitization drive is noteworthy and shall certainly augment the banking industry to go and achieve the target it has set out for itself. RBI too has been given more powers to formulate new guidelines for issuance of the new banking license and also devise new strategies to keep roguish borrowers in check from exploiting the system.
If we were to take a synopsis, eighty percent of the market in the Indian banking sector is controlled by Public sector banks the rest 20 percent market is catered by others. As on date 26 Public sector banks, 56, RRB’s, 25 private banks, 43 foreign banks ,1589 urban cooperative banks and 93,550 rural cooperative banks make up the total Indian banking sector.
Challenges in BFSI
The IBA–BCG survey of banks revealed that the level of confidence in finding profitable solutions for financial inclusion is not very high. The level of financial exclusion in India is alarming and remains the biggest challenge facing the Indian Banking and financial sector. The need of the hour is to fix it urgently and the industry must come up with possible solutions to fix this menace at the earliest. Till date, the sole responsibility of financial inclusion lay with the public banks but now the government has given more autonomy to RBI in framing new guidelines. This move has helped RBI to unleash policies mandatory for issuance of licenses to those banks who agree to open 25 percent of its branches in rural areas and thereby achieves the target of inclusive growth.

At present public sector banks account for maximum branches than any other bank group in the rural and semi-urban areas. The banking and insurance industry face challenges unique to its domain which stem from competitive pressures, changes in customer loyalty, stringent regulatory environment and entry of new players, which is making organizations think out of the box and adopt new business models, streamline operations and improve processes.
Some key developments in the IBS are as follows-;
A)SBI has entered into an agreement with World bank to generate Rs 4200 credit facility (USD 625 million) to solicit financing of grid-connected solar photovoltaic (GRPV) projects in India.
B) Capital Small Finance bank having launched 10 branch offices in Punjab has earned the distinction of being India’s first small finance bank and plans to roll out another 29 branches in the current FY 2016- 17.
C) Snap Deal, owner of wallet company FreeCharge has launched FreeCharge Go, a virtual card, in partnership with Yes bank and Master card that facilitates users for making a payment towards the purchase of goods and services at online shops and offline retailers.

D) JP Morgan Chase, who has a branch in Mumbai has plans to open three new branches in Chennai, Bangalore, and Delhi as part of its expansions plans.

E) In a bid to boost exports, Government of Andhra Pradesh has signed an MOU with Exim bank of India.

F) RBL Bank Ltd has successfully raised USD 49.6 million from CDC group Plc. (UK-based development finance company to strengthen for meeting future requirements.
G) Private Equity Investor Lok Capital has plans for investment up to USD 15 million over the next one year in two proposed small finance banks. Lok capital has the backing of US-based Rockefeller Foundation- a non-profit organization.
H) RBI has decided in principle to grant licenses to 10 applicants to open small finance banks with a view to expanding access to financial services in rural and semi-urban areas.

I)State Bank of India in order to exclusively serve Start-up companies has opened its first branch in Bengaluru.

J) RBI has given green signal to 11 applicants to establish as payment banks. The in-principle approval allows these applicants to accept deposits and remittances but is barred from extending any loans.

K) (BTMU) The Bank of Tokyo-Mitsubishi, a Japanese financial services group has planned over the next 3 years to double its branch count to 10 in India and is targeting a 10 per cent credit growth during FY16.
L) The RBI has granted access to third-party white label automated teller machines (ATM) to accept international cards and also widened the scope by including international prepaid cards. It also issued guidelines and permissions for tie up of white label ATMs with any commercial bank for cash supply.
M) RBI has granted permission for investing abroad to Indian alternative investment funds (AIFs) in order to increase the investment opportunities for these funds.

Insurance sector
India being the second most populous country currently, caters to less than 1.5 percent of the world’s total insurance premiums and nearly 2 percent of the world’s life insurance premiums. In terms of premium volume, it stands as the fifteenth largest insurance market and has all the required attributes for exponential growth in the coming years. As per figures available LII (life insurance industry) between April 2015 to March 2016 the industry recorded a new premium income of Rs 1.38 trillion which indicates a growth of 22. 5 percent whereas the general insurance industry recorded a 12% growth with gross direct premium underwritten at 105.25 billion.

Having already witnessed above growth figures, the insurance market in India is pegged to increase at a CAGR of about 12 – 15 percent and expected to quadruple in size over the next 10 years from USD 60 billion to around USD 160 billion. The general insurance business in India is currently valued at Rs 78,000 crore premium per annum industry and growing at a healthy rate of 17 percent.

Road Ahead

With the slew of initiatives taken by the government along with the speedy implementation of reforms, the BFSI sector is working hard to achieve the number one position in line with its vision policy of 2025. The decision to capitalize public sector banks in addition to the strategy of selective infusion of capital based on their efficiency will not only help to put an end to the muscle power public banks enjoy but bring in a paradigm shift in terms of customer experience. Technological innovations in terms of big data, cloud computing, and usage of smartphones to carry out simply day to day banking errands will help set new benchmarks in the industry which would help bring in a drastic change to the banking landscape in India .Banks such as HDFC, ICICI and AXIS are experimenting with the option to launch contactless credit and debit cards in the market shortly. These cards use NFC near field communication, a mechanism that will allow customers to transact without having to insert or swipe.