Digital Transformation Analysing the Impact of Digitalization on Financial Inclusion

Abstract

Digitalization involves the coding of information. It is very easy to process coded newlineinformation with help of computer and transmit in form of signals. According to BMWi newline(2015) Digitalisation stands for the complete networking of all sectors of the economy newlineand society, as well as the ability to collect relevant information and to analyze and newlinetranslate that information into actions. The changes bring advantages and newlineopportunities, but they create completely new challenges . Digitalization increases the newlineproductivity of firms. Digital innovations have reduced the price of processing and newlinetransmission of information very much. newline newlineMobile phones particularly smartphones play a very important role in accessing and newlineusage of financial services instead of landline telephone connection. The cost and newlineavailability of Smartphones are key factors which government should take care of to newlineimprove the level of financial inclusion. Internet connection particularly broadband is newlinea crucial part of digital infrastructure. The cost of internet access should be within newlinereach of the common man. Government can try to replicate the success of the mobile newlinemoney model in the MSME sector with specifically designed products. Keeping this newlinein view government should frame integrated and investor-friendly policies for newlineimproving the level of digitalization in the country. Brick and Mortar branches are an newlineexpensive option for the bank to expand its network. Business Correspondents (BC) newlineor CSP is an economically feasible solution to this problem. BSBDA (No-frill newlineaccount) is essential requirement to provide basic financial services to low-income newlinepeople. But banks are not fully interested in operating these accounts as these newlineaccounts do not provide any financial gains. Government should consider providing newlinesome financial remuneration for the operation of No-frill accounts. Digitalization can newlinebe very helpful to provide financial services to the agricultural sector.