Financial Inclusion Using Television Banking – A Paradigm Shift

(Potential of TVB for Capitalizing Television’s Existing Household Outreach as a Viable Banking Service Delivery Channel and Financial Inclusion)

 Backdrop: Countries like India and Bangladesh have more people glued to the Television daily rather than being online over the internet or a PC for that matter. There are more dish antennas in a village than the internet cable or WiFi in towns and needless to state that there is always an ease of operation for a TV set rather than a PC or Laptop with an internet. While financial inclusion has been most talked about means of cash transfers and prudent money management, including micro-wealth management, it has always been looked from a supply perspective. Challenges of money management are never static, nor are the solutions and hence new and innovative ways will have to be explored to provide access to finance and banking services for the rural and urban poor.

The government of MP in India has created a phenomenally inclusive model of Samrudhhi (Prosperity) that captured a complete database of its citizens and offers real time cash transfers as part of social protection to the poor in their banking accounts. It has displayed a remarkable synchronization and harmony between the Government Departments, Bankers including Central Bank, Field Level Staff and the Civil Societies. An Entitlement based benefits have started reaching to the bank accounts within a 5 kms distance from each village using the ultra-small branches or customer service points of the sub service area bank branches. However, in the next advancing phase the government is also considering a pilot for cashless banking and cashless villages as part of financial deepening that could offer regulated financial products.

Television Banking: The Television Banking (TVB) is yet to penetrate in the length and breadth of the Indian subcontinent and yet, it offers huge potential and tremendous opportunities for financial inclusion leading to cashless villages. The TVB enables customers to conduct banking business with television and TV set-top box as the terminal and remote control for the operational tool based on the cable TV broadband network. TVB exploits television’s two-way communication property, associated with digitalisation and existing reach to provide banking services such as balance enquiry, teleshopping, account transfers, remittances, buying insurance, pensions and mutual funds etc. TVB has the potential to cater to a large subscriber base, educate people about the banking services / products and offer branchless banking services thereby promoting sustainable financial inclusion and deepening.

While the concept is more than a decade older, in Indian context it has the potential of becoming another self-service channel following online banking, telephone banking, mobile banking and ATM. Globally, as of now, it has a limited number of customers, however, it will have plenty of room for development with the help and promotion of digital television technology.

There are certain pre-requisites for TVB and T Commerce such as:

Set-Top Box [STB] infrastructure to offer TV media in any of the three prevalent modes:

·         Conditional Access System [CAS]

·         Direct-to-Home or Satellite TV [DTH]

·         IP-TV services [IPTV]

Secure Message Broker infrastructure between STB and banking infrastructure.

Advantages: Compared with online banking, television banking is closer to the life of everyone. Customers of television banking do not need to purchase a computer or bear the internet "jam"; compared with telephone banking, television banking has a more direct trading interface and all-inclusive information display. Television banking enables customers to complete banking transactions through the television, have access to financial products and industry information, and experience a more fashionable and convenient micro wealth management approaches including financial literacy, the conspicuously missing element in inclusion.

While the language varies in every state, the dialect changes every 100 miles in India. The advantage of TVB towards the use of the local language would enable a more interactive environment for banking, and would help in increasing trust in the system in sharp contrast to BCs who are perceived as temporary salespersons because of the high attrition rate. Financial literacy modules including the so called ‘teachable moments’ could be offered using the TV media itself facilitating masses to learn baking activities and financial management through their favourites like Amitabh Bachhans and Shahrukh Khans. Similarly, voice input would not only make transactions easier, but also provide greater security and authentication thereby reducing frauds. The Saas - Bahu and Sensex fame can be customized for the rural poor.

As in any other state or developing nation, the Samrudhhi model in MP has been facing internet connectivity issues and hence such problems with the mobiles handsets, micro ATMs, POS etc that BCs carries could be done away with it. For, families ensure, even if through the use of inverters, that electricity supply for television is available. Finally, doing TVB in the comfort of the home will increase the overall confidence and higher level of adoption of banking habits, making financial inclusion viable and allow people to buy various regulated financial products and services.

Given the fact that most part of the developing world is yet to rollout online interconnectivity across their geographical parameters, coupled with limited basic computer know-how in remote corners, online banking channel feats can only be complemented by using ubiquitous presence of television infrastructure as a viable channel.

Harnessing Ecosystem: TV is available to the complete family, including elderly parents and the young children, while mobile phone is generally available with the earning member of the family. Moreover, the ease of operating and interactive interface may make TVB a very promising solution. Nations like Bangladesh and India have great prospects of financial inclusion using the TVB route. In India alone, the TV subscriber base has crossed 150 million households reaching on an average around 750 million individuals.  

The Governments along with their Central Banks and regulators will have to display the same level of commitment and synchronization as was showcased in MP that now follows the G – 20 Global Best Practices on Financial Inclusion. The technology for TVB and the capacity development of the stakeholders need to be firmed up. The Bankers and the governments must allocate substantial resources to develop appropriate, uniform and easy to use frontend technology and undertake pilots to test the same with different operators and geographical locations. Once an appropriate, frugal and scalable technology is achieved, TVB could have the potential to serve the masses at very low cost and little human intervention and mobilise resources for the formal financial sector. It can also offer regulated financial products at the doorsteps, nay, living room steps.

A recent report by the Asian Development Bank Institute recently made an observation about the scale of growth in China where Chongqing-based three Gorges Bank worked with its area cable operator to deliver banking services via television. While this was a new service launched in early 2013, it would provide greater accessibility and more intuitive interfaces than personal computer banking, particularly for older urban clients. If Chinese are here, Can Indians and Bangladeshis be far Behind?