Porus Mistry Updates : Mobile Payments & Banking

11 In today’s world, treasuries and other finance functions and institutions are working towards reducing direct interaction with their customers to gain automated efficiency benefits, while still maintaining easy customer accessibility to accounts and supply chains via technology and outsourcing services. To work this model requires collaboration, however, and it is the same in the mobile channel.

In order to support the evolution of mobile solutions and widespread adoption via collaborative approaches, banking technology vendors continuously generate innovative ideas and solutions. We’ve already witnessed the evolution of cheques and of clearing systems, the development of Point-of-Sale (PoS) devices, Interactive Voice Response (IVR) systems, automated billing and presentation techniques, and numerous other technological aids to help financial institutions.

As mobile technology evolves, banks have started to embed mobiles in their front-end solutions offering ease-of-use, flexibility and accessibility to their retail bank consumer customers and to corporate banking clients. Through mobile m-banking services users can review their balance, transfer money between accounts, and perform some sort of utility payments, along with many other services that enable interaction between the account owner, bank back office systems, and other participants in the financial supply chain.

Mobile technology vendors have started to offer services for mobile users and introduced the mobile m-payments revolution, which is gaining increasing acceptance. The contributors towards this new era include mobile network operators (MNOs) and payment gateway providers. Both financial ecosystem and mobile ecosystems play a major and significant role in the development and dissemination of these new services. M-payment solutions offer different services to subscribers such as utility payments, mobile top-ups, airtime transfer, billing, authorization, and many other services.

For its basic functionality, m-payments normally depend on using the established card scheme infrastructure; surrounding credit, debit, loyalty, merchant, acquiring and business and other card ‘rails’. M-payments can also use the mobile m-wallet option, which is not necessarily tied into the usual ecosystem but will piggyback on existing infrastructures in some instances. Whereas with m-banking the transactions and reporting typically depends on a banking customer’s accounts details and the infrastructure surrounding this, making it a more bank-centric offering.

Despite the fact that banks are not in the forefront of providing mobile financial services, especially in the context of m-payments where mobile network operators and others are forging ahead, banks do still have the opportunity to conquer this market if they want, taking advantage of their legacy systems and customer base on the banking infrastructure / accounts side. Treasuries could gain considerable efficiency benefits in the payments and supply chain if an integrated offering was developed.

The question that might rise here, is there an on-going dispute and debate between banks and other service providers to win the market? The answer, in my opinion, is absolutely no because collaboration is required to gain widespread adoption – regardless of any fears about disintermediation.

Nowadays business models encourage partnership and collaboration rather than competition between companies that may offer joined services. In this approach, you could see partnership among different ecosystems, at the same time, providing a unique and unified new ecosystem that consists of the financial ecosystem (banks / treasuries), mobile ecosystem (MNOs) and utility service providers.

Money Transfer Future: Domestic and Cross-Borders

One major function that has a wide impact in the global financial system and where increased mobility could help treasuries is in money transfers, which vary in amount and flows from and to different directions.

Transfers are performed at different levels in terms of technology sophistication and user education. Partnerships between financial institutions or departments, represented by the banks and treasuries, and m-payments providers, such as MNOs, will expand the capabilities of the ecosystem for everyone. In the remittance consumer area, or the small corporate payments arena, such cooperation could add huge amounts of money to the cash flows that travels from one continent to another.

Moreover, software and technology vendors are offering and promoting the concept of the cardless automated teller machine (ATM) where bank accounts or m-wallets are linked to a mobile number, which is managed by MNOs, enabling a wider range of money transfer beneficiaries to receive money. The idea has been proven to work in Kenya where the M-Pesa service has gained widespread acceptance among consumers and businesses that do not possess ATM cards or traditional bank accounts. This is a significant feature and an added value to all stakeholders in the money transfer cycle.

The Technology Question

The collaborative approach will enable different technologies in the marketplace to provide services for both classic and newly begun end uses, such as mobile money transfer services. The new ecosystem will benefit from old and new technologies, where old ‘banking rails’ are deployed. The technologies that can be harnessed include:

• SMS text services.
• Unstructured Supplementary Services Delivery (USSD).
• Mobile applications.
• Mobile web.
• Near Field Communication (NFC) technology.

Each of these technologies has its own advantages and disadvantages, although this is not the appropriate forum to address this issue. However, it is worth mentioning that the majority of stakeholders prefer investing in mobile applications and NFC due to its ability to provide accessibility and usability for customers.


Security: Newly launched services will lack the trust and confidence in the market until there is a success story and some real proof of credibility. This is especially important because card holders and corporates are apprehensive to provide card information without a guarantee that their information is secure. But who said that we shouldn’t trust mobile transactions to perform money transfer or utility payments using our own mobile devices? I would say it is more secure as most of these mobile applications are secured with digital certificates and use different mechanisms of data encryption. In addition, most m-payment solutions should comply with PCI standard to secure the transactions.

Fraudulent Transactions: Banks and service providers should address all issues that might fall under the fraud category. Central banks and regulators are publishing rules and regulations to govern and manage fraud transactions. It is not difficult for service providers to adhere to such rules, follow regulations, and accordingly protect their consumers and their revenues from fraud. Also, it will be a good idea to use shared services in which huge databases are in place, monitoring tools are implemented and the rules followed by these shared services are enhanced and maintained frequently.

Know Your Customer (KYC): With Anti Money Laundering (AML) regulations and laws imposed worldwide, the identity of people involved in the money transfer process becomes a major issue that service providers have to address and provide solutions for in order to eliminate this potential risk.

Collaboration between MNOs, payment gateways, banks (issuing and acquiring) and businesses’ provides a larger scale of databases and information about the people involved, aiding efficiency and adoption.

In order to provide quality services and eliminate the risk, partnership and collaboration are the keys to success; the future of mobile financial services will tell its own success stories.

Porus Mistry

Labels : porus mistry, mistry porus, porus mistry idbi bank, porus mistry icici bank, porus mistry fino, porus mistry fundtech, porus mobile


Porus Mistry Updates : Payment Automation worth Investing in the Opportunity


Recent research jointly conducted by Capgemini Consulting with the Massachusetts-based MIT Center for Digital Business suggested that the vast majority of business executives (over 94% of those surveyed) see digital transformation as an opportunity. This observation also applies to electronic payments. A similar percentage believes that electronic payments are either critical or very important to the efficiency and success of an account payable department. That is why corporations and financial institutions continue to make significant investments to upgrade or overhaul their payments software solutions.

The benefits of payments automation are wide-ranging and include the following, to name only a few:

Reducing overall payment costs: Electronic payments methods have reduced staff time and effort to execute payments while enabling end-to-end automation and reconciliation, leading to greater straight-through-processing (STP) and lower processing costs.

Removing paper from the accounts payable (A/P) department: Companies which implemented payment automation claim that formerly typical problems, such as late payments and operational risks now belong to the past. Staff members are less stressed and suppliers are paid on time, thanks to minimal paperwork.

Reducing the risk of payment fraud: The improvement of risk prevention – both internal and external – and detection is a very important benefit of payment automation.

Better cash management: Payment automation allows the enterprise to gain a rapid overview on A/Ps and receivables. The enterprise treasurer /management can be more aware of what the future holds and take better business decisions for transactions investments and others.

Access to benefits of new technologies: One last – but not the least – reason why enterprises implement payment automation is the access to benefits of new technologies and digital transformation. The setting up of the payment software is sometimes a first step on the journey to fully digitise back offices or to fully integrate the front and back offices. This is an opportunity to mobilise the organisation around a project that affects almost all departments and draw valuable lessons for the future.

Without a doubt, operations, technology and people can reap many advantages from payment automation. Despite the benefits outlined above, many companies are still reluctant to embrace it. Why? There are also several obstacles, which include some or all of the following:

Supplier resistance: Liquidity mismatch – triggered by limited synchronisation / timing of inflows and outflows – and concerns over sharing private financial information over an electronic channel are leading causes of resistance. Added to that, if an important supplier does not adopt e-payments the cost of parallel infrastructure maintenance can rise drastically.

Incomplete and inadequate e-payment solutions: Despite the many solutions available in the market, many companies struggle to find solutions suited to their goals and expectations. Some companies are forced to consider multiple solutions to cover their needs completely. As a result, the integration and maintenance costs rise. Payment services providers (PSPs) remain focused on specific areas in the enterprise, which can be problematic particularly for global companies. A good example which illustrate that PSPs are not always able to provide their solution globally, is an on-going project at International Co. They decide to implement several different PSP solutions in order to cover their diverse needs. Connecting to a new PSP for a large company is always a challenge, because all PSPs have their own interface, reporting and servicing methods. All of these should align with the standard processes of a company and should also be integrated with – primarily – their legacy systems. A handful of challenges in total.

Lack of integration between e-payments and other back office systems: Misalignment between corporate accounting and electronic payments systems is another obstacle for the adoption of payment automation. The existing accounting systems function in ways that do not allow or require costly integration efforts. Consequently, residual processing is performed manually. As a result many companies then decide, typically, to either postpone their investments or even not to implement a solution at all.

Inadequate IT resources: The combination of legacy back office systems and insufficient operational and technical skills is a major hurdle to the adoption of payment automation. To give an example: A manufacturing company wanted to manage a payment automation project relying on internal skills. Within a couple of months, the project fell behind schedule and drifted significantly from the desired goals. Fortunately, its team understood quickly that the skills were inadequate and looked for external help before it was too late.

No management buy-in: The lack of executive sponsorship leads to poorly managed projects without any clear vision on the outcomes and benefits for the organisation. In fact projects fail because critical decisions were not supported by top management.

What Payment Services Providers have done to Address the Issues

PSPs are aware of the challenges faced by their potential clients to implement payment automation systems and have undertaken some actions to better meet the needs of companies and organisations.

A holistic approach is necessary to address all the needs of the organisation: As discussed, PSP offerings do not support the needs of their clients in total. PSPs are working on solutions which will enable them to firstly cover the needs of almost all departments in the organisation (procurement, finance, payroll, etc; secondly to use flexible technologies such as service-oriented architecture (SOA) to extend the functionalities of their solutions to meet requirements of specific users in a company; and thirdly to focus on value-added services such as reporting, payment security and control and compliance. Such functionalities enable platform rationalisation, which supports the business case. While there might still be a long way to go, PSPs that have taken this path to differentiate.

Complete payment solutions suited for particular sectors: PSPs that focus on a particular sector with the aim of providing complete solutions can better cover their clients’ needs, build successful relationships and outperform their peers. Consider, for example, a firm that specialises in solutions for the health care sector. ‘The company is transforming the industry with a 360 degree approach to revenue cycle management, enabling providers to get paid more, faster. This is enabled through automation of the four components of the revenue cycle: patient access; insurance and third party claims; insurance and third party remittance and payment; and patient billing and payment.’ Today, the company has connections to more payers, providers and vendors than any other competitor in the marketplace.

Facilitating integration of e-payment solutions with existing A/P systems: Along with SOA-based integration, customisation of solutions for liquidity management and reconciliation have been key to driving value for clients. For example, in the case of reconciliation, the criteria that matter for payment reconciliations vary depending on the sector and companies. PSPs have enabled their solutions to offer the flexibility required.

PSPs have undertaken many initiatives to improve and customise the solutions to drive client adoption. As integrator of some PSPs solutions, the authors are convinced that additional aspects can be adopted to be more successful in helping organisations adopt e-payment automation projects.

The further aspects to help successful implementation of e-payment automation include:

Payment process standardisation across the whole company is a must to get the most out of a payment automation project, which concerns almost all departments in a company – not only the A/P department as some assume. A best practice is to review all payments-related processes across the organisation. Standardisation helps people rapidly understand processes and communicate and over the long term, training costs can be significantly reduced. Process owners should be appointed for the standardisation. It is recommended to choose experienced, highly skilled people with a very good knowledge of the company.

Obtain management buy-in: Every corporation should consider the amount of cultural change that will accompany transformational initiatives if payment automation is to be successful. Automation solutions need management’s backing at all levels because they bring about radical changes in A/P operations. Obtaining management buy-in is not always an easy task, particularly when the advantages that such a project can bring are not perceptible for the top management. A good approach is to create a business case where it can be clearly demonstrated that short and long term benefits are linked to the project. As an example, a telecommunication company was looking to implement payment automation software. Management was convinced it was the right thing to do, but wanted to postpone the project to later because they believed other projects had higher priority and a better return on investment (ROI). The business case revealed that the project had a much better return than initially expected and that it could be done in a shorter time. The project was launched with a member from management as project sponsor.

Find the right IT skills to implement payment automation: To improve the chance of success, companies should conduct an internal assessment of process, technological and human capabilities before launching a payment automation project. A lack of internal assessment leads to a lack of understanding of the many technological capabilities and enablers available to the enterprise for payment process efficiency. So the internal assessment should help management understand if the company is ready to accept all the changes required by the project and if the right IT skills and capabilities are available to carry out and deliver the project. The assessment should be done in an objective and factual way. The pitfall in this exercise is to minimise weaknesses or exaggerate forces. Find a solution to address each weakness if there is any. Hire people with the required skills or subcontract the project where necessary.

‘Lite Solutions’: With advancements in technology, leading solution providers are providing lite e-payment solutions that require a low implementation footprint, typically in a software as a service (SaaS) mode. Services are provided in a ‘pay as you go’ commercial model that improves chances of business case approval. An evaluation of such solutions is highly recommended.

In conclusion, Payment automation yields increased productivity, efficiency, and greater visibility. Providers have done much to improve their solutions and adapt them to the new market demands. But PSPs and companies should carefully consider how they want to approach payment automation implementation projects for a faster and successful implementation. It is one thing to know what to do, but another to do it in the right way. A good practice for success is to standardise payment process across the company, absolutely obtain management buy-in, find the right skills to implement the projects and take advantage of SaaS like solutions.

Labels : porus mistry, mistry porus, porus mistry idbi bank, porus mistry fino, porus mistry icici bank, porus mistry nucleus software export, porus mistry fundtech, payments, liquidity management, mobile payments, payment banks, technology, automation, psp, payment service providers, SOA, SAAS, opportunity

Mushkil e Assan Behram Yazad ni Panah


Accolades – Service Excellence Award – Corporate Category



Accolades – Corporate Service Excellence Award



Porus Mistry Updates : Mobile Payments


Mobile payments are on everyone’s mind these days, but what will drive widespread adoption and become the ‘killer app’ is still something of an enigma. Retailers are currently scrambling to find the best way to adopt convenient mobile solutions that appeal to their customers. Meanwhile, corporates are largely trying to figure out just how this new innovative payment method applies to them and the impact it will have on their treasury, supply chains and operations.

Following a recent discussion I had on emerging payments with one of my acquaintances in the US, it appears clear that breaking mobile payments into large corporate payments will likely take much longer than it will on the consumer side. The corporate and treasury uptake of the technology is bound to lag behind the more ‘go ahead’ consumer space.

Although there has been some penetration of mobile devices in corporate payment methods like wire transfers, it may be quite a long time before mobile devices and systems make their way into more practical options like large automated clearing house (ACH) payments – even the UK’s planned common mobile payments platform, which all the banks say they will be signed up to by 2014, is initially aimed at processing peer-to-peer or smaller business payments.

There’s so much more than just moving the money for a corporate. Corporates have to have the remittance information of course, but the invoices are so complex as well. How many times does a corporate say, ‘I am not paying the fifth, the seventh and the 18th item on this bill?’ That changes the dollar amount and causes all types of additional processes.

Mobility Effects on Merchant/Bank Relationships

The so-called mobile m-payments revolution is showing signs of being just that; a transformative event that could allow at least some retail corporations to dramatically reduce their relationship with financial institutions. The supply chain consequences for other corporates and their treasuries could also be profound.

Before new players like PayPal and Square entered the picture, merchants traditionally had to use whatever services banks or card schemes had to offer. But in the past year, PayPal has forged direct partnerships with Home Depot and Discover on new payments technology in the US, while Starbucks and Square joined forces in their own high-tech venture with added customer loyalty and tracking/marketing benefits. There’s even a Merchant Customer Exchange (MCX), a coalition of major retailers in the US currently working on a top-secret new mobile payments service. In Europe, there is the iZettle offering battling with Square.

Retailers say they are partnering with new payments providers to offer customers more convenience. But there are also some benefits for retailers themselves. One of my acquaintance of Optimized Payments Consulting, pointed out that nearly half of PayPal payments are funded by ACH and PayPal balances, with the rest funded by Visa, MasterCard, Discover and American Express. That allows PayPal to charge lower interchange fees.

Don’t be Square

Square faces a problem in that its only funding sources are credit/debit cards, with no ACH option and no Square currency or balances. It is conceivable and likely that Square will add an ACH option and perhaps, have its own balances that could be used as funding sources. Banks should be concerned as they need to be thinking about innovative ways for cards to be on top of consumers ‘virtual’ wallets.

If Square has enough merchants in its pocket, then it might move to conducting payments through another method like ACH. Square’s simple 2.75% rate and no interchange rates could prove enticing to many retailers, sole traders or others who don’t want to pay the traditional card scheme fees.

Square might be losing money right now because it is going after segments that have not been mined before, particularly very small merchants. In my opinion, I don’t think that there’s enough business to become the dominant player. But I think there’s a bigger game in there. What makes sense to me is, if they can build enough of these consumers on one side, and billers on the other… they can get out of using credit or debit – an expensive way of operating – and use a very inexpensive ACH instead. And I don’t think they have to lower their rates that much more. So then they’re making really good money.

Winning the Market

For a mobile solution to succeed in the retail industry, it will require three crucial things:

1. The right mobile technology and supporting infrastructure.
2. A broad appeal to customers.
3. Merchant acceptance.

If you look at the third party wallets like Isis, the Google Wallet, Square, PayPal and others—these are all branded wallets. They’ve built technology or are in the process of building technology options. They’re very much interested in how much the consumer likes it. But the thing they don’t have today in meaningful numbers is merchant acceptance.

MCX is building its solution in the opposite direction. They’re starting with merchant acceptance, and they’re going to build towards the technology solution and customer satisfaction.

But MCX still has to make sure its mobile solution has all three components to be successful,

In a nutshell, in my opinion nobody has all three today. But the first entity that has all three components is probably winning the market.

Porus Mistry

Labels : porus mistry, porus mistry fino, porus mistry idbi, porus mistry bank, porus mistry mobile, porus mistry icici, porus mistry fundtech, porus mistry nucleus, porus mobile, mobile payment, alternate channel, mobile payment

Porus Mistry Updates : Need to build a Stronger Supply Chain

As liquidity dries up in the face of Quantitative Easing (QE) changes and companies seek to access their own cash faster, banks need to devise new solutions to meet the needs of corporate.

While there was still sufficient liquidity for a time after the 2008-09 global financial crash any excess liquidity is now expected to steadily drain away and smaller distributors are becoming concerned about whether they will continue to have enough financial support.

To address this need for liquidity, companies want to Elongate Days Payable outstanding (DPO) by shifting from payment requirements of 30 days to 45 days or longer, for example, without a major impact on their suppliers. Furthermore, corporates want to move deeper into the supply chain and enable funding for their Tier 2 suppliers – aka the supplier of suppliers, such a company that provides rubber for a shoe manufacturer.

One solution was pre-shipment financing for the Tier 2 suppliers. The challenge, however, was that those Tier 2 suppliers may not be sufficiently creditworthy. What banks were then doing is to go beyond just those Tier 2 suppliers’ financial strength to look also at supply chain linkages, the importance of the Tier 2 supplier to the larger company, their percentage of sales to the larger company and the unresolved rejection rate between the two firms. In an environment of sluggish growth, companies able to facilitate this pre-shipment financing for their Tier 2 suppliers both create a differentiator for their supply chain and also ensure their distributors are equipped to sell.

In an Asian context, two things are especially important for financing a Tier 2 distributor.

1. The distributor often needs to make payment before goods are actually sold. An automobile dealer who needs to pay the manufacturer within 15 days, for example, may not sell cars that fast and therefore needs financing. Providing that financing ensures that the Tier 2 company has the financial support it needs and also helps them sell more products.

2. More financing means the Tier 2 supplier has more goods available that it can promote and sell.

From a corporate perspective, the current situation requires a different way of thinking. Whereas companies financed their distributors with surplus cash – even though they were not getting good returns in the past – now that liquidity is expected to tighten they are looking at alternatives for stable funding for the supply chain.

While a corporate’s channel partners are good at their business and their products may be so strategic for the corporate that there will be significant difficulties if the Tier 2 company defaults, the Tier 2 company may not have a strong balance sheet. Pre-shipment financing offers an alternative and while it requires both banks and corporates to understand the entire supply chain better, from a long-term perspective the new model offers the advantages of stable financing to the corporate.

Additionally, although it still is often difficult for a corporate to determine whether a Tier 2 company requires financing, as the cash management and supply chain divisions were separate, many banks have also enhanced its technology to make access to that funding easier. With the enhanced systems that links the two divisions and suppliers together, suppliers can notify the corporate when they want financing and the corporate can pass that information to the bank for consideration of vendor pre-payment.

Making Cash More Visible

Along with financing a further key need for corporates is cash visibility and management so that they know where the cash is and how to move it. One key part of this visibility is reconciling payments.

When a company gets paid, it needs to determine what the payment was for and which invoice it matches. Most companies set a limit on the outstanding amount to a single distributor, so a delay in matching the payment to an invoice may reduce sales because the company won’t sell more to its distributor until a payment is confirmed. Since matching invoices typically takes at least three to four days, cash gets stuck in the supply chain.

To solve the problem, many banks have developed a two-pronged solution.

1st.. It offers a virtual account, whereby a company has one main account and then creates virtual sub-accounts for each invoice so that the distributor can reference the sub-account and enable the company to match the payment with the invoice more quickly.

2nd.. It has created an advanced reconciliation management system to match invoice details with payments and inform the company of the level of match it has identified.

The two solutions combined can help a corporate increase sales by freeing up part of the limit faster.

To explain it more in detail, wish to give an example :

The bank is working with a large manufacturer of farm equipment that sells equipment through nearly 500 distributors in small cities in rural areas. Upon analysing payment flows, the bank found that when distributors paid the company at a small local bank in a small town, the payment would travel through a series of smaller-town banks to the larger city where the company had its account. During this extended process, much of the invoice detail would be lost along the way. When payments arrived the manufacturer could, at best, know who was paying but often could not match the payment to a specific invoice. When a distributor wanted to order more, the manufacturer would then retort that the distributor had not paid.

To address the problem, linking the systems to both the manufacturer and the distributors, and then giving the distributors a unique account number for each purchase order. This enables the distributor to pay into a dynamic virtual account, which the manufacturer uses to know who paid and for which invoice.


While liquidity may be tightening, leveraging new solutions can enable corporates to keep their supply chain functioning smoothly and free up cash in their own system faster so that they can increase their sales.
Back to top


Porus Mistry

Label : porus_mistry, porus mistry idbi, porus mistry FINO, porus mistry icici bank, porus yazdi mistry, porus mistry, cash management, financial supply chain, cash flow, liquidity management

Porus Mistry Updates : Financial Inclusion – An opportunity to create positive impact


During course of my travel I discovered that more than 60 percent of adults living in Asia, Africa, Latin America, and the Middle East do not use formal banks or semi formal micro-finance institutions to save or borrow money. That’s nearly 2.2 billion unserved adults. Unserved, however, does not mean unservable. The micro-finance movement, for example, has long helped expand credit use among the world’s poor—reaching more than 300 million clients in 2008 itself.

Full financial inclusion would mean providing every household with access to a suite of modern financial services, including savings, credit, insurance, and payments, as well as sufficient education and support to help customers
make good decisions for themselves. These products and services must be affordable, designed to meet the population’s needs, available within reasonable physical proximity, and regulated and overseen to protect consumers.

Poor households have many of the same financial needs as wealthier households, and they gain similar benefits from having access to quality, affordable financial services within a reasonable distance. For example, a recent review of impact assessments in micro-finance found evidence from several studies that both credit and savings products are good for micro enterprises, producing increases in investment and profits.

Not surprisingly, demand for financial services is high among the poor, who often turn to informal channels when access to formal ones is not available. Its an eye opener as per ball park analysis done by researchers 147 emerging markets and surveyed consumers in the Philippines to better understand the needs of this vast segment. Nearly 90 percent of the people we surveyed store money at home, with a friend, or in a village savings club. Some buy assets, such as cows or chickens, as a store of value. Nearly 60 percent of the people surveyed in the Philippines keep some form of savings. These savings are typically used for managing cash flow rather than for long-term asset accumulation. The annual turnover can be many times the average balance. In India, about 20 percent
of the unbanked population have access to credit, but 60 percent of the borrowing is done through moneylenders. In the Philippines, about 13 percent of the unbanked borrow: 55 percent from family or friends, 13 percent from moneylenders, and 17 percent from MFIs.

Credit is becoming increasingly available through formal channels. In the past decade, MFIs have had tremendous success reaching poor individuals in many markets, in particular Latin America and South and Southeast Asia. The
number of micro credit borrowers served by MFIs increased by a factor of ten from 1997 to 2006, totaling 130 million individuals. In 2005, The World Savings Banks Institute identified up to 1.4 billion client accounts of all types at “double bottom line” institutions—including MFIs, postal savings banks, and other public-purpose
institutions—in developing and transition economies. And third-generation micro credit players, often run for profit, break even faster and more predictably than ever before.

Well-managed commercial providers in Latin America and India are achieving sustainable returns in addition to social impact by serving this segment. And the gains made by individuals and private enterprises will accrue to society as a whole, enabling overall improvements to quality of life and potentially spurring economic growth.


Porus Mistry

Labels : porus mistry idbi bank, porus mistry icici bank, porus mistry fino paytech, porus mistry, porus yazdi mistry, porus mistry fundtech, porus mistry nucleus software, financial inclusion, micro credit, micro finance, inclusive banking, bank,

Porus Mistry Updates : Achieving full Financial Inclusion


The goal of financial inclusion appears to be within reach. But achieving it depends on scaling up innovation from across the private, public, and social sectors.

More than half the world’s working-age population does not have quality, affordable financial services. That’s about 2.5 billion adults—2.2 billion of whom live in Africa, Asia, Latin America, and the Middle East.

To better take advantage of life’s opportunities and shield themselves from economic shocks, these un-served people and their households must be able to save, borrow, insure against risk, and make payments knowledgeably, safely, and afford-ably. The goal of enabling everyone to participate fully in the formal financial system is known as “financial inclusion” and achieving it across the globe will likely benefit individuals, the commercial enterprises that serve them and society at large.

Financial inclusion will provide poor individuals with the opportunity to improve their standard of living. It can enable companies, especially financial-services providers, to do good while gaining access to many profitable new customers in dynamic and high-growth markets. For countries, it has the potential to stimulate economic activity and improve the overall quality of life of their citizens.The potential for positive,social and economic impact is tremendous.

In the past 30 years, micro-finance institutions (MFIs) have led the way, proving that the working poor can be served sustainably. But to achieve full financial inclusion, institutions in the private, public, and social sectors must develop innovative models that enable them to sustainably deliver affordable, high-quality services to the working poor at scale. This remains challenging. Lower-income individuals are difficult to serve in an economically sustainable way, available products often fail to meet their needs, the risks associated with serving them can be difficult to manage, and existing regulations often impede progress. Critics have rightly asked for evidence that financial services benefit this population, and voices from all corners have reminded the world that consumer protections are critical.

The good news is that many factors are now coming together to allow organizations to pursue full financial inclusion. Organizations are gaining an increasingly sophisticated understanding of lower-income customers’ needs
and of how best to organize themselves to meet those needs.Technological advances are improving data transmission, collection and analysis, enabling organizations to develop low-cost distribution models and scalable risk management practices. More governments are supporting financial inclusion through regulatory and public-policy reforms that protect consumers while enabling providers.

Past successes have laid the groundwork for progress at an accelerated pace, and every sector— private, public, and social—has a role to play. Indeed, new models are already being developed and deployed by organizations from a wide variety of sectors, including not only financial services firms but also telecommunication companies, retailers, utilities, government agencies, foundations, and non governmental organizations. And organizations that get involved early have the greatest opportunity to shape solutions and achieve impact.

In my next update shall try and provide an overview of the sector, including a review of some of the critical forces that are creating the conditions in which full financial inclusion can be achieved and the actions that organizations can take to accelerate progress.

Thanks & Regards.
Porus Mistry

Labels :- porus mistry, mistry porus, porus mistry fino, mistry porus fino, porus yazdi mistry, financial inclusive, inclusive banking, ebt, fi, porus mistry idbi bank, porus mistry icici bank, porus mistry fundtech, porus mistry nucleus, porus mistry software

Porus Mistry Updates :- Global Financial Inclusion – Foreword

FI In the past decade, the goal of financial inclusion was ensuring that every individual has access to quality, affordable financial services has become an increasing priority and possibility worldwide. The second decade of the century it has become all the more necessary conditions for meeting this goal & initiatives are seen coming together.

Financial inclusion aims at benefiting the world’s poor, the vast majority of whom do not use formal financial services of the sort provided by banks, insurers, or Micro-finance institutions (MFIs). As a result, they are unable to avail themselves of the fundamental tools of economic self-determination, including savings, credit, insurance, payments, money transfer, and financial education.

Over the past 30 years, MFIs have demonstrated not only that the working poor want and need formal financial services but also that they can afford them. Consequently, MFIs and other commercial organizations have been expanding these services at an accelerating pace, and recent developments suggest that full financial inclusion is within reach over time. Organizations operating in a variety of contexts are levering technology; innovations in distribution, risk management, and product development; and a deepening understanding of lower-income customers to develop sustainable business models that meet the unique needs of the poor. These efforts will increase benefits for individuals and private enterprises, as well as for society as a whole.

While each country will follow its own particular path to achieving full financial inclusion, most solutions require contributions from the private, public, and social sectors. Private businesses must continue to innovate and scale
business models that deliver quality and value to consumers without relying on penalty based revenues—from late fees or similar charges, for example—to generate sustainable returns. Governments must establish appropriate regulations and oversight to protect consumers while enabling a range of providers to deliver services at sustainable cost levels. And social-sector institutions should continue to contribute ideas, talent, and seed funding; use their convening power to create effective partnerships; and provide services to the hardest-to-reach consumers.

In India as well there are few Social Sector organizations who support private, public, and social institutions as they develop and scale up solutions in the face of complex societal challenges. These organizations have multi rich experienced officials having worked with organizations in a range of industries and disciplines including financial services, telecommunications, consumer marketing, logistics, philanthropy, public-private partnerships, and economic development—to help overcome the barriers that stand in the way of full financial inclusion.

As I move on with my readings, I would pen down a few articles & share some of the lessons I have learned in our
work in the sectors growth story, principal challenges, risk management regulation.

Porus Mistry

Label : porus mistry, mistry porus, porus mistry FINO, porus mistry Fundtech, porus mistry Nucleus software, financial inclusion, microfinance, porus mistry idbi bank, porus mistry icici bank, porus yazdi mistry