What is DiFi for All?
DiFi (Digital Finance) for All aims to deeply understand and document digital financial onboarding experience of unbanked and underbanked individuals — with a special focus on women, marginalised and vulnerable communities.
DiFi for All is a study conducted by Quicksand Design Studio, supported by the Bill & Melinda Gates Foundation to understand Digital Financial Inclusion in India and people’s onboarding experiences onto Digital Financial Service (DFS) platforms.
This research is a part of a four country research — Bangladesh, India, Indonesia and Uganda — that will be conducted over a period of two years. We plan to collect insights through interviews using participatory and design thinking activities and rich media documentation such as pictures, videos, recordings and others across 200 unique users. Our research partners across these countries are BIGD, Somia CX and Three Stones International respectively.
Why is this study important?
Digital Financial Services (DFS) are critical for bringing unbanked and underbanked customers into the formal financial sector. The Indian financial system has expanded its reach exponentially due to policy changes and tech disruption. However, key segments of the Indian population remain underbanked. Digital finance presents an opportunity to bring key segments onboard, yet exclusions persist at multiple levels.
According to the Global Findex 2017 published by the World Bank, India is home to 190 million unbanked people. However, ongoing policy developments and public and private sector innovations have aimed to bridge the divide between the banked and unbanked by solving supply side barriers. A significant milestone in this has been the creation of a vibrant digital finance ecosystem, which can largely be attributed to the conceptualisation of the India Stack and other open source policy developments that have enabled both public and private sector players to innovate and create products for large segments of the Indian population.
It has been recognised that digital financial services play a critical role in bridging the financial inclusion gap in such that it can provide cost effective and quality services at the last mile, especially areas that have remained underserved from mainstream financial markets. However, amidst these developments, key segments of the Indian population continue to remain financially underserved.
What is DFS?
Digital Financial Services may be defined as individuals and businesses having access to reliable and affordable financial products and services that address their needs in a responsible and sustainable manner.
Digital Financial Onboarding may be understood as the process of introducing customers onto a digital financial ecosystem and giving them access to relevant products, services, and facilities online.
Digital Financial Services (DFS) include a broad range of financial services accessed and delivered through digital channels, including payments and transfers, savings, credit, insurance, and investments. The first wave of DFS has resulted in a vibrant ecosystem for digital accounts, wallets, and payments solutions but uptake and sustained use for these services remains minimal or limited among target user groups of this research. Amongst one of the most prevalent DFS which is payments, common modes of using DFS in India include:
- Internet Banking (IMPS, NEFT, RTGS)
- Automated / Direct Debits (NACH,ECS)
- Mobile Payments (UPI/ USSD)
- Credit and debit cards
- Cash-in & out services (PoS, AePS)
- Payment Wallets and Pre-paid Instruments
There are three main steps to access DFS (Digital Financial Services).
1. Discovery
Customers identify or are introduced to the need for a digital financial service
2. Onboarding*
Involves opening an account, KYC verification, introduction to the digital platform, initial use, potential drop-offs etc.
3. Ongoing use
Involves an understanding of post-onboarding product functionality and optimal use of the platform
*Preliminary analysis suggests that vulnerable segments drop-off during onboarding. This study aims to understand why such drop-offs persist.
Objective of the study
This study aims to understand the reasons behind low digital financial uptake within certain segments of the population and whether the reasons can be attributed to onboarding. It seeks to identify key challenges and opportunities in the onboarding process and produce actionable and localized insights that can directly benefit digital financial inclusion activities for service providers.
We ask three main questions through our work:
What does complete digital financial inclusion truly mean?
How might we bridge the gap for segments that face technology access barriers?
How might we bring underbanked segments these segments onboard for inclusion?
