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Directions (151-160) : Read the following passage carefully and answer the questions given below it. Certain words have been printed inbold to help you locate them while answering some of the questions
Financial Inclusion (Fl) is an emerging priority for banks that have nowhere else to go to achieve business growth. The viability of FI business is under question, because while banks and their delivery partners continue to make investments, theyhaven’t seen commensurate returns. In markets like India, most programs are focused on customer on-boarding, an expensive process which people often find difficult to afford, involving issuance of smart cards to the customers. However, large scale customeracquisition hasn’t translated into large scale business, with many accounts lying dormant and therefore yielding no return on the bank’s investment. For the same reason, Business Correspondent Agents who constitute the primary channel for financialinclusion are unable to pursue their activity as a full-time job. One major reason for this state of events is that the customer on-boarding process is often delayed after the submission of documents (required to validate the details of the concernedapplicant) by the applicant and might take as long as two weeks. By this time the initial enthusiasm of applicants fades away. Moreover, the delivery partners don’t have the knowledge and skill to propose anything other than the most basic financial productsto the customer and hence do not serve their banks’ goal of expanding the offering in unbanked markets.
Contrary to popular perception, the inclusion segment is not a singular impoverished, undifferentiated mass and it is important to navigate itsdiversity to identify the right target customers for various programs. Rural markets do have their share of rich people who do not use banking services simply because they are inconvenient to access or have low perceived value. At the same time, urbanmarkets, despite a high branch density, havemultitude of low wage earners outside the financial net. Moreover, the branch timings of banks rarely coincide with the off-work hours of the labour class.
Creating affordability is crucial in tapping the unbanked market. No doubt pricingis a tool, but banks also need to be innovative in rightsizing their proposition to convince customers that they can derive big value even from small amounts. One way of doing this is to show the target audience that a bank account is actually a lifestyleenabler, a convenient and safe means to send money to family or make a variety of purchases. Once banks succeed in hooking customers with this value proposition they must sustain their interest by introducing a simple and intuitive user application, ubiquitousaccess over mobile and other touch points, and adopting a banking mechanism which is not only secure but also reassuring to the customer. Technology is the most important element of financial inclusion strategy and an enabler of all others. The choiceof technology is therefore a crucial decision, which could make or mar the agenda. Of the various selection criteria, cost is perhaps the most important. This certainly does not mean buying the cheapest package,but rather choosing that solutionwhich by scaling transactions tohuge volumes reduces per unit operatingcost. An optimal mix of thesestrategies would no doubt offer aninnovative means of expansion inthe unbanked market
ENGLISH LANGUAGE
Directions (151-160) : Read the following passage carefully and answer the questions given below it. Certain words have been printed inbold to help you locate them while answering some of the questions
Financial Inclusion (Fl) is an emerging priority for banks that have nowhere else to go to achieve business growth. The viability of FI business is under question, because while banks and their delivery partners continue to make investments, theyhaven’t seen commensurate returns. In markets like India, most programs are focused on customer on-boarding, an expensive process which people often find difficult to afford, involving issuance of smart cards to the customers. However, large scale customeracquisition hasn’t translated into large scale business, with many accounts lying dormant and therefore yielding no return on the bank’s investment. For the same reason, Business Correspondent Agents who constitute the primary channel for financialinclusion are unable to pursue their activity as a full-time job. One major reason for this state of events is that the customer on-boarding process is often delayed after the submission of documents (required to validate the details of the concernedapplicant) by the applicant and might take as long as two weeks. By this time the initial enthusiasm of applicants fades away. Moreover, the delivery partners don’t have the knowledge and skill to propose anything other than the most basic financial productsto the customer and hence do not serve their banks’ goal of expanding the offering in unbanked markets.
Contrary to popular perception, the inclusion segment is not a singular impoverished, undifferentiated mass and it is important to navigate itsdiversity to identify the right target customers for various programs. Rural markets do have their share of rich people who do not use banking services simply because they are inconvenient to access or have low perceived value. At the same time, urbanmarkets, despite a high branch density, havemultitude of low wage earners outside the financial net. Moreover, the branch timings of banks rarely coincide with the off-work hours of the labour class.
Creating affordability is crucial in tapping the unbanked market. No doubt pricingis a tool, but banks also need to be innovative in rightsizing their proposition to convince customers that they can derive big value even from small amounts. One way of doing this is to show the target audience that a bank account is actually a lifestyleenabler, a convenient and safe means to send money to family or make a variety of purchases. Once banks succeed in hooking customers with this value proposition they must sustain their interest by introducing a simple and intuitive user application, ubiquitousaccess over mobile and other touch points, and adopting a banking mechanism which is not only secure but also reassuring to the customer. Technology is the most important element of financial inclusion strategy and an enabler of all others. The choiceof technology is therefore a crucial decision, which could make or mar the agenda. Of the various selection criteria, cost is perhaps the most important. This certainly does not mean buying the cheapest package,but rather choosing that solutionwhich by scaling transactions tohuge volumes reduces per unit operatingcost. An optimal mix of thesestrategies would no doubt offer aninnovative means of expansion inthe unbanked market
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