bfsi

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Designing Fintech Apps for Low-Connectivity and Low-Literacy Users 

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We’ve all been there: a slow Wi-Fi signal, a complex app with tiny text, or a frustrating password reset process. For billions of people around the world, these aren’t just minor inconveniences—they’re everyday barriers to accessing essential financial services. 

As we design the next generation of fintech, we have a profound opportunity to make a real difference. It’s about more than just building a flashy app; it’s about creating tools that empower people who have been left behind by the digital revolution. This means stepping into their shoes and understanding what true accessibility looks like. 

Here’s how we can build fintech that works for everyone: 

1. Acknowledge the Reality of Connectivity 

  • Offline First Mode: Apps can store key information locally on the user’s phone. For example, a user can start a money transfer to a saved contact even without a signal. The app would show a “Pending” status and then automatically complete the transaction the moment a connection is re-established. 
  • Data-Saving Features: The app can have a “lite mode” that turns off high-resolution images and videos. You can also compress data transfers so that every megabyte counts. This makes the app faster and cheaper to use for people on expensive data plans. 
  • Minimalist UI: The user interface should be simple and not require lots of information to be loaded. This means fewer images, simpler layouts, and text-based lists that load quickly. 

2. Listen, Don’t Just Look 

  • Voice-Guided Navigation: The app can use audio cues to guide the user. For instance, when the user opens the app, a voice could say, “Welcome back. Your balance is…” and then offer options like, “Say ‘Send Money’ or ‘Pay Bill’ to continue.” This makes the app usable without needing to read anything at all. 
  • Audio Confirmation: After a user makes a selection, a voice can confirm it. “You have selected ‘Send Money.’ Now please enter the amount.” This reduces errors and makes the user feel more confident in their actions. 
  • Simple Icons with Audio Descriptions: When a user taps an icon, a small audio description can play. Tapping a picture of a wallet could trigger the sound, “This is your account balance.” This links the visual to an audio cue, which is great for people learning to use the app. 

3. Simplicity is Our Superpower 

  • One-Tap Actions: Simplify common tasks to a single tap. If a user always sends money to their family on the 1st of the month, the app could have a “Repeat Transfer” button on the home screen that takes care of it with one press. 
  • Limited Screens and Clear Flow: Avoid buried menus and complex paths. The most important actions should be on the main screen. The flow for any task, like sending money, should be a simple, straight line with few steps. 
  • Large, Clear Buttons: Use large buttons with high contrast to make them easy to see and tap. The text on the buttons should be simple and direct, such as “Pay” or “Receive.” 

4. Make Security Personal 

  • Biometric Login: Instead of a password, a user can log in with their fingerprint or a face scan. This is more secure and far easier for a user who may struggle to remember a complex password. 
  • Voice-Based Authentication: For voice-enabled apps, a user’s unique voiceprint can be used to confirm their identity. A simple phrase like, “My voice is my password,” can be used to log in. 
  • Photo or Avatar-Based Security: For people with very low literacy, a picture can be used to identify a saved recipient for a payment. Instead of reading a name, they can tap on a photo of their friend or family member to send them money. 

Designing for these users isn’t just a good thing to do—it’s the smart thing to do. By creating technology that is truly inclusive, we can unlock potential, build trust, and help a new generation of people take control of their financial lives. This is the future of fintech, and it’s a human one. 

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The Financial Risks of Sticking with Outdated Banking Technology 

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In an era where technology continually reshapes how we live and work, the banking industry is no exception. Yet, many banks still rely on outdated systems, hoping to avoid the complexity and cost of change. While it might feel easier to stick with what’s familiar, the financial risks of holding onto old banking technology are growing—and they’re hard to ignore. 

  
One critical example of innovative technology reshaping the sector is the Enterprise Collateral and Limit Management System (ECLMS)—a modern solution designed to streamline and secure collateral management and credit limits across institutions. 
 

Why Outdated Technology Costs More Than You Think 

At first glance, using legacy systems might seem like a cost-saving move because it avoids the upfront expense of an upgrade. But the reality is different. According to Deloitte, banks can end up spending as much as 70% of their IT budgets just to maintain their older systems. That means less money is left for improving services or adopting new technology that customers expect today.  
 
The hidden cost? Inefficiencies, slower processes, and mistakes that can hurt both the bank and its customers. 

Security Risks: A Growing Threat to Banks 

Security isn’t just a buzzword; it’s a lifeline. Old software and aging infrastructure often have gaps in protection that hackers love to exploit. IBM Security’s 2023 report showed that banks using outdated technology are facing data breaches costing roughly $6.5 million per incident—almost double the cost for those with modern security setups. And it’s not just money at stake. A data breach can absolutely wreck a bank’s reputation and shake customer confidence, making recovery tough and expensive. 

Trouble Meeting Regulations 

The financial world is heavily regulated for good reasons. Banks have to follow strict rules about how they handle data, prevent fraud, and report suspicious activity. But older systems aren’t always designed to keep up with changing laws, like the European Union’s GDPR. Banks that can’t update their systems quickly risk big fines and legal headaches. The EU has already handed out fines totaling over €1 billion related in part to outdated compliance systems. 

Losing Customers to More Agile Competitors 

Today’s bank customers are more digitally savvy than ever. They want fast, easy access to their money and personalized services on their phones. According to McKinsey, more than half (56%) of banking customers globally prefer digital-only banks—which tend to have the newest technology. Banks stuck on old platforms run the risk of watching their customers go elsewhere for a better experience. 

But It’s Not Always Easy to Change 

Of course, shifting away from legacy technology isn’t simple. Smaller banks may not have the resources or expertise to make big tech investments quickly. Migration projects can be complex and sometimes disruptive. Still, many technology experts agree that the long-term cost of doing nothing usually outweighs the short-term challenges of upgrading. 

The Bottom Line 

The truth is, outdated banking technology isn’t just an inconvenience; it’s a financial liability. Between high maintenance costs, growing cybersecurity threats, regulatory risks, and the expectations of today’s customers, clinging to old systems could put a bank’s survival at risk. For banks looking to stay competitive and secure, embracing modern technology like ECLMS isn’t just smart—it’s essential. ECLMS offers a comprehensive, agile platform for managing collateral and credit limits efficiently, ensuring compliance, reducing risk, and enhancing customer trust in a digital-first world. 

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How Mobile Apps Are Helping Rural India with Banking 

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Mobile apps in Banking

In India, more than 65% of people live in rural areas where banking is hard to access. There are few banks, low knowledge about money matters, and long distances to travel. But mobile apps are changing this. They’re bringing banking to rural India in an easy way. As a fintech app development company, we’re excited to share how mobile apps are making a big difference. 

Why Banking Is Tough in Rural India 

Rural areas face many problems with banking: 

  • Few Banks: Many villages don’t have bank branches or ATMs. 
  • Low Money Knowledge: People often don’t know how banking works. 
  • Far Locations: Traveling to a bank takes time and money. 
  • Paperwork Issues: Many lack ID papers needed to open accounts. 

These issues keep people away from banking. Mobile apps are solving this problem. 

How Mobile Apps Are Helping 

Mobile apps make banking simple for rural people. With cheap smartphones and internet (over 900 million users in India by 2024), apps are reaching everyone.

Here’s how they help: 

1. Banking on Your Phone 

Apps let people bank from home. No need to visit a bank. You can open accounts, send money, or get loans using apps like Google Pay, PhonePe, or new banking apps. 

2. Easy Account Opening 

Apps use Aadhaar and digital KYC to make account opening simple. People can use their fingerprint or a quick video call to start banking, even without many documents. 

3. Apps in Local Languages 

Apps are made for rural users. They use local languages and voice instructions. This helps people who can’t read or write well. Apps like Paytm and BHIM work in many Indian languages. 

4. Small Loans for Everyone 

Apps help rural people get small loans. They check data like phone usage or small payments to decide if someone can borrow money. This helps farmers, shopkeepers, and women start businesses. 

5. Learning About Money 

Apps teach users about saving, investing, and avoiding scams. They have simple guides and chatbots to explain things. For example, apps like Zerodha’s Coin teach about mutual funds. 

6. Cashless Payments with UPI 

UPI apps like BHIM and Paytm let people pay or receive money instantly. Rural shops and farmers now use digital payments, which helps them join the modern economy. 

Apps Making a Difference 

Some popular apps are changing rural banking: 

  • BHIM: A government app for fast UPI payments. 
  • Paytm Payments Bank: Offers accounts with no minimum balance. 
  • Fino Payments Bank: Works with local agents to bring banking to villages. 
  • YONO by SBI: Combines banking, loans, and insurance in one app. 

These apps have helped millions of rural people start banking. 

How Our Fintech Company Helps 

At SmitApps technologies, we build software’s to make banking easy for rural India. 
 
Our software’s are: 

  • Safe: Strong security to protect your money. 
  • Big Reach: Made for millions of users. 
  • Easy to Use: Designed for people with little education. 
  • Smart: Use AI and biometrics for better service. 

We work with banks and finance companies to create apps that help rural users. 

What’s Next? 

The future of rural banking is bright with mobile apps. As 5G and smartphones grow, more people will use these apps. New tech like AI chatbots and blockchain will make banking even better. 

At SmitApps Technologies, we’re ready to help. We build apps that make banking simple, safe, and open to all. 

Conclusion 

Mobile apps are changing lives in rural India. They make banking easy, help people save, and grow their businesses. As a fintech app development company, we’re proud to build apps that bring banking to everyone. 

Want to create an app that changes lives?  
 
Contact SmitApps Technologies today! 

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Collateral Management -An Approach to Automation – Part-1

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Friends, we are starting this multi-part series to cover collateral management from a lender’s perspective and scenarios important for automating Collateral Life Cycle Management. We trust that the contents of this series will ignite thought process in the community which is predominantly manual as on date

Collaterals are the first and most important credit risk mitigate available to a lender, however, collateral management is predominantly a manual process. Considering the proliferation of digitization and automation in the financial industry, collateral management automation is still not a priority area. Our objective of this series is to bring forth the critical aspects of the collateral management process and considerations for automation of life cycle management of collaterals from a lender’s perspective.

While sanctioning a secured loan, the lenders secure collaterals under their charge using different methodologies depending on the type of collateral being created out of the lender’s funds or offered by the customer. Accordingly, the collaterals may be broadly categorized into two categories: Primary Collaterals: The asset which is created out of the funds is considered as primary collateral. Say loans given to purchase vehicles, plant and machinery etc will create assets as vehicle/ plant & machinery that will be hypothecated to the bank but will remain under the procession of the borrower. In this case, the asset created out of funds of the lender will used for use by the borrower.

Secondary Collaterals: many times lenders resort to securing their funds by taking additional collaterals which are in most cases Immovable Property. Such additional collateral is termed Secondary collaterals. Secondary collaterals serve as additional collateral coverage to the exposure of the lender and primarily the title and/ or the asset will remain in possession of the lender.

However, such categorization may become blurred in many cases like loans against customer’s FDR, Shares, NSC, KVP, Gold etc. are often considered as primary collaterals in banking parlance whereas in actual sense these are secondary collateral, since the funds given by the lender are going to be utilized by the customer for either creation of other assets or purely for expanses.

For creating a charge on the collateral offered/created needs to undergo different perfection events depending on the type of collateral, once the collateral is perfected it is available for onboarding and tagging at various levels of the limit hierarchy of the customer. Based on the tagging of the collateral at the respective limit hierarchy level, the value of the collateral is distributed among various facilities of the customer.

Post onboarding of the collateral, two important aspects need to be performed, firstly, if there is any deviation in the pre-onboarding perfection process that should be complied with at the earliest and post onboarding activities like post disbursement inspection and registration of charge with competent authority also need to be performed. The charge on the collateral is registered with the respective authority depending on the type of collateral.

Subsequently, regular maintenance like insurance, re-valuation and re-inspection are the activities that need to be carried out by the lender for upkeeping of the collateral good and realizable till the existence of the tagged exposure so that delinquency risk is mitigated.

Finally, once the loan is repaid by the customer, the collateral needs to be released (release of title documents on which the charge was created) to the customer upon due acknowledgement.

In the Next Part – Various Types of Collaterals

Author: VC Sharma

Disclaimer: The views expressed in the blog are entirely personal to the author. There is no direct/ indirect responsibility of the publisher whatsoever.

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Open Banking and Risks. Were you aware of this? 

Posted on by Admin

BFSI players can leverage Open Banking and APIs to their advantage while safeguarding customer data, maintaining compliance, and driving innovation in the financial sector. While Open Banking and APIs offer great potential for innovation and convenience in the BFSI industry, they also come with inherent risks that need to be carefully managed. Here are some key ones: 

Data Security and Privacy: 

  • Increased attack surface: Open APIs create more entry points for hackers to access sensitive financial data. 
  • Data breaches: Third-party providers (TPPs) accessing data could be compromised, leading to leaks and unauthorized access. 
  • Accidental data exposure: Human errors or misconfigurations in API implementation can lead to accidental data exposure. 

Regulatory Compliance: 

  • Complex compliance landscape: Banks need to comply with various regulations regarding data sharing, user consent, and security, which can be challenging with Open Banking. 
  • KYC/AML risks: Verifying the identity and Anti-Money Laundering (AML) checks for TPPs add complexity and potential for fraud. 

Business Model Disruption: 

  • Commoditization of services: Open APIs can make core banking services accessible to new players, potentially eroding traditional banks’ competitive edge. 
  • Loss of customer relationships: If customers migrate to TPPs for specific services, banks may lose valuable customer data and engagement. 

Other Risks: 

  • Third-party risk management: Assessing and monitoring the security and reliability of TPPs requires robust due diligence processes. 
  • Operational complexity: Implementing and managing Open Banking infrastructure requires significant investment and ongoing maintenance. 
  • Lack of trust and transparency: Some customers may be hesitant to share their data due to privacy concerns and lack of transparency in data usage. 

However, the risks can be mitigated with these strategies: 

  • Robust security measures: Employ strong encryption, authentication protocols, and regular security audits. 
  • Strict data governance: Implement clear data access controls, consent management, and data usage policies. 
  • Thorough TPP vetting: Conduct rigorous due diligence and ongoing monitoring of TPPs’ security and compliance practices. 
  • Customer education and transparency: Clearly communicate data sharing practices, privacy policies, and customer control mechanisms. 
  • Investment in technology and compliance: Allocate resources to build secure and compliant Open Banking infrastructure. 

While the open banking landscape might seem like a thrilling tightrope walk, remember, you don’t have to navigate it alone. With the comprehensive risk management solutions, you can transform the thrill into a smooth, controlled ascent, reaching new heights of innovation and customer satisfaction.