Financial inclusion refers to the idea of making financial products and services available to all using innovative technology systems. It means that individuals can access the banking products and services more conveniently. Digital banking is a broader concept of an online banking system, where customers can avail of banking services online.

In developing countries, there has been a plethora of efforts on the part of the government to make banking services available to all segments of people in the society. Earlier, people had concerns and were prejudiced about the concept of digital banking. Now, in the current Covid-19 situation, people have started using all digital services that are available to them. This indeed is a positive sign of the spread of financial inclusion.

Critical as it is to increase the availability of digital bank accounts, availability itself does not always mean equal adoption. For achieving true success in financial inclusion, we need to establish an environment where, for example, it does not make sense for people to encash their digital wages as soon as they are received. We need merchants and services that accept digital payments. Digital money has to be a convenient and commonly supported way of buying goods, paying school fees, sending money to family members, and performing other transactions that are central to the lives of poor people.

In India, the Reserve Bank of India (the central bank) has come up with a strategy for financial inclusion which seeks to provide an ecosystem for various modes of digital financial services thereby moving towards a cashless
society. One of the objectives of the strategy includes increasing outreach of banking outlets to provide banking access to every village within a 5-km radius or a hamlet of 500 households in hilly areas by March 2020.
RBI has said that it aims to see every adult has access to a financial service provider through a mobile device by March 2024.

Research has concluded that digital banking indeed helps to increase financial inclusion. Earlier with the brick and mortar systems, the penetrability of banking products and services in rural areas had been minimal.
Now with the advent of technology, people in rural areas have also started to use digital banking products. This indeed is a motivating step towards financial inclusion.
It is for this reason that the government has introduced plans and policies to provide internet connectivity services to rural areas, so that they could also enjoy the benefits of the whole process.

But still, there are concerns connected with the same. Security and lack of awareness among the masses are factors that need to be addressed. We often come across adv
ertisements educating us about the do’s and don’ts in digital banking. This gives ideas to people on what needs to be done and what not and whom to contact in case of any concern.
The customer can, thereby, know about the various support systems available to them and these advertisements also encourage people to enjoy the digital banking services.

Security and lack of awareness among the masses are factors that need to be addressed.

Post Covid-19 surveys on the topic of Digital Banking will certainly show a rise in the usage of online banking services as, at this point, most people are left with no other choice.
In all probability, there will be a positive inclination towards these services and that in turn would be the major proof that digital banking indeed helps in promoting financial inclusion.

Geethu Mohan : Geethu Mohan is a Management professional with rich industry experience. She is a
voracious reader and has actively contributed to research and development over the years.
Her interest lies in reading, academic and creative writing.