Mahindra's 'mobiquity' aims at solutions for small banks
17 October 2015
Mahindra Comviva said on Friday it will offer technology solutions and infrastructure to payments banks in the country as it aims to tap the opportunity created by the Reserve Bank of India's decision to issue licenses to 11 Payments Banks.
''Mobility will be the key lever in the fast evolving Indian banking landscape. Acknowledging this change, Mahindra Comviva has enhanced its leading mobile financial solution 'mobiquity' to meet the needs of the payments and small finance banks in India,'' Srinivas Nidugondi, senior vice-president and head of mobile financial solutions at Mahindra Comviva, a subsidiary of Tech Mahindra, said.
There are several reasons why payments banks and mobile banking are so important for India, Nidugondi said. First, he cited the high cost of cash. A Mastercard study, he said, found that the cost of maintaining, managing and transporting cash cost the banking sector Rs21,000 crore in 2014. Mobile banking and other forms of electronic transactions stand to greatly reduce this cost, he said.
The second reason for the success of payments banks is to do with Indians' perceptions of their bank accounts. At the moment, he said, about 20 crore bank accounts are dormant. ''These are the accounts we need to focus on,'' Nidugondi said.
People need to see these payments banks not as savings instruments, he said. ''The focus (with payments banks and mobile money) should not be on financial inclusion, the focus should be on electronic payments. In addition, these accounts should be seen more as transactional instruments rather than savings instruments,'' Nidugondi said.
He added that his company's focus would be on two core groups: the unbanked, and the millennials (aged 15-35 years). ''Our experience internationally has shown us that people who are unbanked take to mobile phone banking really well. They conduct all their transactions through them. The other group we are looking at are evolved customers, especially millennials. This group is heavily into the use of smartphones,'' the executive said.