Following up on an announcement made in the 2022-23 Union Budget earlier this year, PM Narendra Modi recently dedicated 75 DBUs to India. These DBUs or Digital Banking Units are part of an ongoing effort by the RBI to accelerate the adoption of digital banking services and improve financial inclusivity in the country. In this article, Vice President & Head of India Region at Tata Communications, Arijit Bonnerjee, examines how DBUs will enable a new era of inclusivity and personalisation.
DBUs are meant to offer the same functionality of a brick-and-mortar establishment, but in a paperless, wholly digital format. As the RBI explains, the purpose of a DBU is to “optimally blend digital infrastructure with the human touch.” In essence, we’re talking about the possibility of services like 24/7 support, automated cash deposit/withdrawal, and even digital onboarding and the disbursal and processing of schematic loans being made available to anyone, anywhere with a stable internet connection and power.
As PM Modi put it, “maximum services through minimum digital infrastructure.” Banks are expected to incorporate DBUs into their existing digital banking strategy and are expected to meet certain minimum requirements for product and service offerings at these locations. While DBU centres will be treated as banking outlets, they will need to be housed distinctly from traditional branches.
“Additionally, and this is the exciting part, banks have been given the freedom to innovate on DBU services within the limits of RBI’s compliance guidelines. But first, we need to get the basics right.”
The potential here is huge, but so is the challenge. While DBUs will no doubt promote financial inclusivity, the challenges of digital literacy and building trust in the system, particularly in rural areas, are significant. One approach we’re taking to address this problem is by attempting to re-imagine the mechanism and language of this human-machine interaction. We aim to make these interactions more natural and intuitive, integrating digital experiences that break silos and smoothen friction points.
We’ve been working with several partners to experiment with and fine-tune various interfaces and platforms to enable such a system to work. This is powered by bespoke integrated omni-channel tools to impart and end-to-end frictionless experience to the consumer. These include video collaboration tools for video KYC and digital onboarding and a similar system for enabling sales.
We’re also looking to leverage our expertise in the development of AI-powered tools and cloud services to support personalisation and localisation with features like multi-lingual translation and contextual interaction.
“In a country as large and as diverse as India, such tools are necessary for scaling up and enabling inclusivity, especially when we’re looking at expanding services into rural areas.”
To enable 24/7 support — a requirement for DBUs — AI interfaces like digital humans or intuitive chatbot service are also necessary. All this will of course need to be built on robust, scalable network infrastructure that’s built from the ground up with security and zero-trust policies in place. Additionally, cable-less branches running on failsafe Wi-Fi services will be needed to minimise infrastructure requirements and speed up the setting up of DBUs.
Enabling a new era of financial inclusivity
One of the most exciting aspects of DBUs is the prospect of building hyper-local, hyper-personalised products and services.
“Thanks to investments in end-to-end digitalisation — accelerated by the pandemic — banks and financial institutions, in general, are now more resilient and agile than ever.”
This is thanks to robust back-end systems and more flexible front-ends that allow such institutions to re-package products and services on the fly.
DBUs give us the opportunity to put this agility and flexibility to good use. We not only get to enable a new era of financial inclusivity but also to address the needs of a whole new class of audience. This is an excellent opportunity to enable financial inclusivity at scale.
To learn more, read this blog on how technology has evolved and what’s next in 2023.