According to State, the Digital India program has a vision to transform India into a digitally-empowered society and economy. That is, to establish India as a “Faceless, Paperless, Cashless” society. The government has therefore, magnificently joined hands with organizations and technology nerds, through subsidies and forums with the sheer objective to expedite and embrace these transformations even better. The historic change that India saw recently through Demonetization, has paved the way more strongly than ever for these players in instituting India as a cashless society.
With technology as the backbone, the country is definitely heading towards establishing itself as a developed economy. Correspondingly, the existing ecosystem is favorable. It is more than willing to fuel the change and revolutionize the way the economic and banking sector operates. By 2020, millennials will comprise half the global workforce with banking is at the highest risk of disruption by them. Also, about 1.8 billion mobile banking users will emerge by 2019 globally.
The future is extremely prospective and ready to grow. The radical forces, as discussed above, are going to get strengthened further by the following:
- About 74% consumers get frustrated when contents have nothing to do with them.
- There will be 1.8 billion mobile banking users by 2019 global wise
- The global sharing economy will be worth 335B by 2025
- 64% of small businesses will be fully Integrated and be on Cloud across the US, Canada, Australia, and the UK
Thus, all this radical forces in combination has and are further going to redefine the entire banking landscape.
India Stack, that utilizes digital infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery, has taken the financial services and commerce to the next level. The banks are a chief participant in this enterprise. It exercises a symbiotic relationship, where it is fostering the vision of the India stack and as well as availing the benefit of quicker authentication, lower transaction costs, faster transactions and personalized delivery of services. All these has fostered the growth and facilitated an environment that lends to innovation in the overall pursuit of economic wellbeing.
Thus, what we need to understand and build is a better ecosystem not a bigger bank. A digital bank today needs to grow by embracing the pillars of digitalization and as well as work towards remaining relevant in the competitive global financial system. The banks need to re-model itself and bring in capabilities from multiple stakeholders, utilities, market participants and even collaborate with competitors to influence and integrate into the lives of its customers. Newer business and operating models need to evolve to ramp up revenues and contain costs.
Therefore, the transition has been disruptive and has without a doubt has facilitated the country to become digitized and cashless to a remarkable extent. The ecosystem is promising and as well as favorable, but there are major concerns and questions that needs to be carefully deliberated and discussed.
Are the payment wallets and apps secure enough to support our economy and most importantly the people who are going to be its primary users? We have to understand that we can’t merely push digitization without working on digital literacy, its ubiquitous reception and most importantly the digital security of Indians.
Qualcomm report states that most of these wallets and banking apps in India lack a hardware security. These apps primarily run on Android and are highly susceptible to password leak. The password used can be easily stolen. Even the fingerprints, used as security codes can be hacked to sneak into your account.
Security is thus, one of the biggest challenges for constituting India as a cashless society. If this is not rectified and amended, then having India as a cashless society is a distant dream.
We need to however, understand that digital security is cosmic and not a onetime launch. It needs continuous feeding and improvisation to facilitate a secure and confident India. It is crucial to make the citizens, especially from the areas and regions that have sporadic penetration and less information about digitization, digitally-literate. The government should ensure such trainings to the citizens on priority.
The RBI has not yet prescribed any security standards for e-wallets in India. The wallets should have a robust infrastructure for data security and the RBI should advocate the minimum standards for security for firms to be registered much before people put their faith into it. However, the great news is that there are IT firms like 3i Infotech that has a remarkable credential and experience in banking and finance, especially in digital transaction and security.
So now we can say that India is definitely in the path of becoming a cashless society but not exclusively equipped. It is on its way, trying to catch up and will only wholly achieve its desired goals once it solves all the security issues. Transactions and payments models need to get more secured and free of glitches like phishing or hacking. Then only we can establish India as a cashless society, one that is secure enough for our economy.