Digital Banking – A ‘Dynamics’ Chat with Niraj Verma

Niraj Verma is a senior consultant in the banking technology space. He is a banker, ideator, trainer, an artist and a writer. He introduced himself in a rather interesting manner, which I share here – “You are of course right when you say my profile is all over the place and difficult to slot. I have always been uncomfortable with conforming and reluctant to fit into a mold. I guess, that makes it difficult to find a regular smooth-sided hole for this oddly shaped peg”.


Hi, Niraj. Welcome to Dynamics.

The nation has been abuzz with demonetization and digital talk in the last few days. Fintech is the sector celebrating more than anyone else, as the future looks bright. At the same time, it is not without its challenges. What is your perspective on the overall emerging scenario?


Hi, Reena. Thanks for giving me an opportunity to share my views.

When we listen carefully to the chatter on digital money or FinTech with particular reference to Demonetization-2016, we find there are two distinct sets of people who are talking loudly.

  1. those who are active players in the FinTech space would like to take advantage of the emerging situation, to increase their market share, and
  2. those who are trying to downplay the chaos by extolling the supposed virtues of digital money. They callously ridicule the genuine problems of a large section of population.

The first set is engaged in genuine business development, which is absolutely fine. My problem is with the second set. These commentators come from relatively affluent sections of society, and are financial and tech-savvy. They are grossly ignorant, if not downright dismissive, of day-to-day problems faced by the less fortunate.

When the FI initiatives started during UPA rule, conservative estimates of unbanked population stood at roughly 45%. Current estimates put the figure at about 30%. In addition, there are urban poor and lower middle class who can at best be classified as under-banked. They would be about 15%-20% of the population. That should tell anyone that about 45%-50% of the population, even as on date, is simply not in a position to adapt to a cashless digital economy.

Demonetization-2016, its ill-planned rollout and the consequent transactional issues would indeed provide a push for higher adoption of digital money. However, the larger digital spend would come from those who are already using it in a limited manner, and accelerated onboarding of some potential  converts, who would have otherwise shifted in a year or two. Unbanked and under-banked sections of the society cannot make a magical or significant move to digital money, before cashless market places become the norm (rather than the exception).

Demonetization-2016, on its own, cannot play a significant role in creation of a cashless economy.

When we talk about fintech, payment technology providers like PayTM occupy a disproportionately high visual share in public perception. Actually, the fintech space includes a lot more. Yes, Demonetization-2016 would certainly accelerate the growth of payment technology companies, but, would not cause a major impact on the growth of fintech space in its entirety.

RS : How do you view the Indian challenges on using digital as a tool of financial inclusion, as compared to other countries, say Kenya? IMHO, the technological challenge lies in having simplified user-friendly interfaces in multilingual formats, and internet education. Existing networks like the Financial Literacy Centers (FLCs) and Internet Saathi (initiated by Google and Tata Trusts, using trained female instructors) can play a pivotal role. But, they need to be integrated in the overall financial system, without being captive to a bank or financial institution.


In 2006, I had developed a branchless banking solution for a financial services entity in Venezuela. The solution was based purely on the mobile platform. It was fairly successful. Similarly in Kenya, mobile banking technologies have been successfully harnessed for a financial inclusion initiative.

The linguistic diversity in these countries is much less than that in India. That brings us directly to your observation about user interfaces in regional languages. While customizing a US CBS (Core Banking system) for international clients in China, Thailand and Mexico, all user interfaces had to be converted to the local languages. If you look at CBS solutions implemented in countries like Germany, France, Russia or any East European country, you will find a non-English interface.

India is one of the few  markets where banking applications use an English interface, in sync with the comfort of the bankers, rather than the end-user.  In the pre-CBS era, I had designed a bilingual total/partial branch automation application. The solution was implemented with English UI in some District Central Co-operative Banks (DCCBs) in MP/UP, and with Hindi UI in some DCCBs in Chhattisgarh. The level of end-user comfort was higher with the Hindi application.

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