Inclusion is one of the core pieces of Prime Minister Narendra Modi’s vision of Digital India. In order to boost financial inclusion, the focus has been on Jan Dhan Account and Aadhar cards programs. However, despite this progress, the dream of financial inclusion is far from real.
Our failure on the front of financial inclusion points to the limitations in the bank-led model of financial inclusion both in terms of access and its ability to serve the common man, who feel intimidated by the banks and struggle to understand the jargons of the financial industry. Speak to any bank officers or mutual fund distributors, and you will get unsettled by the frequency of usage of jargons such as NAV, exit load, and close-ended. While the investment is not a rocket science, it’s certainly is a ‘riddle wrapped in a mystery inside an enigma” in the words of Winston Churchill.
More importantly, only about 10% of Indians are comfortable with English, which is a major language of communication at banks. According to a KPMG report, titled ‘Indian Languages – Defining India’s Internet,’ only 57% of India’s digital payment user-base are active English users.
Therefore, even fintech startups, which are doing a great job in making the process painless and jargon-free, could only cater to the 43% of internet user base, as most of them just cater to users who are comfortable in using English. Therefore, in the true sense, we are still quite far from financial inclusion and democratization of financial services. In the context of cutting through the financial jargon and bridging the communication barrier, the fintech startups have one thing that banks don’t – an ability to personalize the service and cater to each customer uniquely. While banks will struggle to serve customers in multiple languages, a fintech startup can serve customers in different languages without any huge investments. Fintech startups such as Paytm, Sqrrl, and PhonePe have done an incredible job of serving customers in the language of their choice.
Vernacular fintech apps have the power to provide an access to financial services to these users in an underserved market, in a language that the users choose. Besides, expanding the scope of financial services to migrant and underserved segment in Metro and Tier-1 cities, the biggest impact of these apps will be in tier-2 and tier-3 cities, where language is one of the biggest barriers to financial independence.
However, it needs to be pointed out that this is just a start. Only the availability of app in different languages will not solve the problems. The kind of communication required for a person staying in Patna to feel comfortable in dealing with finance will be way different from a person staying in Ludhiana. The apps need dejargonize the communication in the financial world and customize the experience according to local culture. However, in India’s quest to bring about true financial inclusion, we believe increasing popularity of vernacular app is a step in a right direction.
About the Author
Samant Sikka is the brainchild behind Sqrrl, an intuitive DIY digital platform for investments that aims at making the youth of the nation inclined towards saving. He is a proficient investor with two decades of experience in the Investment and Asset Management industry.