Rural Fintech on the Rise
Are You Prepared for the Competitive Landscape
Bringing you insights and actions for your Bank Correspondent business.
Key Trends in CBC Business from a Fintech Perspective
India’s rural population accounted for 63.64% in 2023 (World Bank). Until recently, institutional banking was nearly inaccessible to these communities, which relied heavily on non-institutional credit due to lack of savings, limited awareness, irregular incomes, restricted access to financial services, and low levels of financial and digital literacy.
In response to government initiatives, CBC fintechs have rapidly embraced digitalization to meet growing user demands. According to the BC Registry, there are 932 bank correspondents (BCs), and over 200 million rural Indians now access formal banking services through these networks (World Bank Global Findex Database).
With the rise of SME businesses emerging from rural India, the need for digital banking services and microfinancing is increasing.
What does a CBC provide?
CBCs educate and guide people in using digital banking services—such as mobile and internet banking—to bridge the digital divide and empower rural communities to participate in the digital economy.
This transition not only reduces reliance on informal channels like moneylenders but also shifts rural India toward formal banking systems, eliminating exploitative practices and ensuring transparency in financial transactions.
CBC Service Offerings
- Bank Account Services:
- New account opening
- Deposits and withdrawals
- Domestic fund transfers (including AEPS, UPI, IMPS)
- Loan Services:
- Loan application and disbursement
- Loan repayment management
- Recharge and Bill Payments:
- Mobile recharges
- Utility bill payments via BBPS
- Insurance Services:
- Insurance policy applications
- Premium payments
- Credit Card Services:=
- Credit card applications and management
In 2021, BCs helped women entrepreneurs receive 68% of the loans under the Pradhan Mantri Mudra Yojana scheme.
What are the basic requirements to make sure you provide quality banking services?
1. Meeting Regulatory Standards
- Compliance with Regulations:
Ensure adherence to local and international banking, financial, and data protection regulations (such as KYC, AML, and privacy laws). - Proper Licensing:
Obtain necessary licenses from regulatory bodies (e.g., Reserve Bank of India for NBFCs) and maintain transparent audit trails.
- Compliance with Regulations:
2. Leveraging Robust Technology
- System Reliability & Uptime:
Build a platform with high availability, load balancing, and disaster recovery mechanisms to guarantee uninterrupted service. - Seamless Integration:
Use standardized APIs and secure interfaces to integrate with core banking systems, payment gateways, and third-party financial services. - Scalability:
Design the system to manage increased transaction volumes and adapt to growing customer needs.
- System Reliability & Uptime:
We build custom fintech apps and software with secure API connections and built-in security.
Connect with us to build your dream fintech as a CBC.
3. Prioritizing Security and Data Privacy
- Data Encryption and Secure Transmission:
Utilize end-to-end encryption and secure protocols (SSL/TLS) to safeguard sensitive information. - Multi-Factor Authentication (MFA):
Implement robust authentication measures for both users and agents. - Regular Security Audits:
Conduct periodic vulnerability assessments and penetration testing to ensure compliance with industry security standards.
- Data Encryption and Secure Transmission:
4. Emphasizing User-Centric Design
- Intuitive Interface:
- Develop a user-friendly, mobile-first design that simplifies onboarding and everyday transactions.
- Accessibility and Multilingual Support:
Cater to a diverse user base by offering language options and accessibility features.
5. Comprehensive Training and Documentation:
Provide detailed guides, FAQs, and training programs to ensure that agents and users fully leverage the platform.
Many white-labeled third-party apps and agent management software fall short. As a business owner, you understand your end customers’ needs, behaviors, and preferences. Building your own platform allows you to stand out, offer more value, and strengthen your brand.
Competitive Benchmarking
Research your competitors to understand where you stand and identify opportunities for improvement. Consider reading these articles to learn about successful strategies:
- Aye Finance:
A leading NBFC for underserved micro-scale enterprises in India has partnered with Credgenics, an AI-powered platform for debt collections and resolutions. - Spice Money:
With a network of over 1.4 million Adhikaris covering 95% of India’s pincodes, Spice Money has developed a tech-led model tailored to the emerging market’s needs.
Read More - EzeePay:
This B2B2C fintech company is focused on financial inclusion, empowering underserved populations across India with services like Aadhaar Pay and Micro ATMs.
Read More - Jana Small Finance Bank:
A longstanding bank focused on financial inclusion that has achieved success through digitalization and technological upgrades.
Read More - Arohan Financial Services:
Recently raised Rs 730 crore in a share sale to private equity investors.
Read More
A common factor among these successful businesses is their customized digital infrastructure that provides superior value to both customers and agents.
Effective Marketing Strategies for Agents and End Customers
Consider the following approaches to maximize results:
- Agent Onboarding and Experience:
- Easy onboarding process
- Quick KYC with auto-scan
- AI-driven educational material tailored to agents’ locality, profession, and banking knowledge
- Personalized dashboards
- AI recommendations based on current performance
- B2C End-User Experience:
- Intuitive app design with minimal input forms
- Multiple backend APIs for cross verification
- Video KYC functionality
- Multilingual language support
- AI Voice Agent for answering basic queries
- Personalized recommendation system for credit score improvement, payment schedules, and other banking options
Transform Your Rural Fintech Journey
Empower your business with our tailor-made fintech solutions designed to drive growth and foster financial inclusion. Our cutting-edge technology and deep industry expertise help you build a robust digital infrastructure that not only meets regulatory standards but also enhances user engagement and trust.
Partner with us to:
- Accelerate the digital transformation of rural banking.
- Provide seamless, secure, and personalized financial services to your customers.
- Leverage AI-driven insights to continually optimize performance.
Let’s collaborate to redefine rural financial inclusion.
Contact us today and take the first step toward transforming your fintech strategy and creating a lasting impact on rural communities.
Let’s discuss fintech and transform rural banking together!