Financial Inclusion in India: An approach through FinTech as a solution

Kevin Thomas Chacko () and Pankaj Kumar Baag ()
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Kevin Thomas Chacko: Indian Institute of Management Kozhikode
Pankaj Kumar Baag: Indian Institute of Management Kozhikode

No 463, Working papers from Indian Institute of Management Kozhikode

Abstract: This paper presents an explorative and deductive perspective on the importance of FinTech and its possible impact on improving financial inclusion. Financial inclusion is a pressing issue with many policy implications. Governments and central banks worldwide have come up with different programs to achieve maximum financial inclusion. However, full financial inclusion is still a dream for many countries. Financial inclusion, it issues, and challenges can be supported with FinTech. However, FinTech has its own policy implication, potential benefits and pitfalls. Fintech should be complemented by supporting infrastructure and a robust legal environment to be effective with proper regulatory policies by government and regulatory financial institutions. Alternatively, we find that widespread and uneven access to digital infrastructure can also have its own direct and indirect risks which can be detrimental and will start another chain of financial exclusion. We also find that Idiosyncrasies related to machine learning and artificial intelligence coding errors can perpetuate the cycle of denying digital finance products and services to specificgroups of people, leading to another form of financial exclusion. Another challenge is to keep in mind is the procyclical behavior of Fintech players which may post-pandemic effect the trend and can have many negative effects including lack of trust in digital finance

Keywords: Financial Inclusion; Fintech; Blockchain; Pandemic; Financial exclusion. (search for similar items in EconPapers)
Pages: 21 pages
Date: 2021-05
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