May 2015

The Indian government launched the Digital India initiative on 1st July aimed at three key areas: a) Digital infrastructure as a utility to every citizen, b) Governance and services on demand and c) Digital empowerment of citizens. Connecting each and every citizen of the country to the digital network is an imperative for India and while it is long overdue, there are significant challenges to overcome. Key industrialists have given strong backing to this ambitious project, committing INR 4.5 trillion in investment. Financial inclusion through digital banking is a key component of this initiative as citizens across the country will be connected to the transactions and services network. However, as noted in a recently released CGAP report, Doing Digital Finance Right, "many users are not only new to both formal finance and technology, they also live precarious financial lives that allow little room for error." The systems set in place now must address the main concerns that customers may potentially have. Here, the onus does not lie solely on the government, but on all stakeholders in the financial services and telecom sectors. The CGAP report authored by Katharine McKee, Michelle Kaffenberger and Jamie Zimmerman analysed research findings from sixteen countries to conclude that there are seven key consumer risk areas:

Inability to transact due to network/service downtime

Insufficient agent liquidity or float, which also affects ability to transact

User interfaces that many find complex and confusing

Poor customer recourse for grievances and queries

Fraud that targets customers

Inadequate data privacy and protection

Policy makers, regulators, financial and telecom service providers must all coordinate their efforts to ensure that trust is built in these emerging digital transaction modes.