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Financial

InclusionStandardization

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Financial Exclusion

There are several definitions for FinancialExclusion(perhaps we need a standard even for

that) Financial Exclusion may be defined as

inability to access mainstream financialservices

Bank accounts

Low cost loans

lack of reliable financial advice

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Financial Needs

access to safe, easy andaffordable credit and other

financial services

for

economic growth, reducingincome disparities and reducing

poverty

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Supportive FinancialServices

Source : RBI

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Progress in FinancialInclusion

Accounts with Institutions (2007)(SCBs, RRBs, Primary Agri. Co-op Societies, Urban Co-opBanks, Self-help Groups)

Savings Accounts 610.20 million (82/100

adults)

Credit accounts 187.10 million (25/100adults)

No-Frills accounts (Mar 2008) 15.83millions

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Challenges!

Enrollment of large numbers

Wide geographic spread

High maintenance costs for accounts

Small ticket size of transaction Illiteracy and use of vernacular

Product & service pricing

Trust and acceptance

Lack of electricity

Poor telecommunications

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Salient Features of our RFP

Proven Technology

Scalable and interoperable system

Contact or Contactless smartcards Fingerprint image acquisition as per

RBI norms

End-to-end Solution (technology andbanking services)

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Technical Specifications -RFP

Smartcard

ISO 14443 / ISO 7816

Standard dimension PVC / PolycarbonateCard

DES/3DES (key length 1024/2048)

EMV Compliant

32 K EEPROM memory

Hold User Certificates, Smartcard OS,Applications, etc

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Technical Specification - RFP

Handheld devices

Integrated system or 2/3 components

ISO 14443 / ISO 7816 and ISO 18092 for read

and write operations Built-in PKI support

EMV Compliant

Multilingual support

Online & Offline capability

Secured storage and communication

Long hours of battery support

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Technical Specifications -RFP

Fingerprint Scanner

Image acquisition at setting level 31 of ISO/IEC 19794-4

Contact area 1 x 1 sq.inch

Min. capture-size 13mm wide x 17 mm high

Pixel density 500 ppi with + 5 ppi

Pixel depth 8 bits

200 grey levels (dynamic range of scanned image)

Sense live-scan plain finger impression

Strong anti-spoofing features

Protection from ambient light, residual images Standard for Data-Interchange - ANSI-378

Encrypt fingerprint minutiae with 3 DES

Scanner surface to be resistant to dust, humidity, shocks,electronic discharge, ambient light, extreme temperatures, etc

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Responses to RFP

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Pros and Cons of someTechnologies

- Source RBI

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Pros and Cons of someTechnologies

- Source RBI

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Smart

Card

Smart

Card

Reader

POSTermina

l

Printer

Biometr

icscanner

Financial

Switch

Backend

Banking

Server

ISO 7816-4 /

ISO14443-4

ISO19794

ISO8583

GSM/GPRS/PSTN/LEASED LINE/

INTERNET

FRONTEND SYSTEMS CONNECTIVITY BACKEND SYSTEMS

Architecture suggested byGovt. of AP

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By introducingstandardization in

financial inclusion weaim to Establish,maintain and pursueadoption of standards soas to enable an open andinteroperable

infrastructure for smartcards, devices andsystems that simplifiesdevelopment,deployment andmanagement ofapplications across

industries

Objective

Standardization

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Interoperability flexibility and freedom of choice

Ability of one application to communicateseamlessly with another

Ability to mix and match various

components from one vendor with those ofanother

Ability to interact between oneorganisation and another

Ability to transact between different usersthat do not use same technology

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Standardization in Applications

Developing Generic Interface for Enrollment for use of Business Agent

Customer

Bank Officer

End-to-end Transaction handling Application on handheld smart device

Application on Switching/Intermediate server Backend Banking software (business logic).

Card Management Software

Interfaces/integration with existing Core-Banking software.

Card Management Software Generic to any Smartcard Type

Generic Card Personalization

Lifecycle management of different card types


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Standardization in Transaction

ISO 8583 Standard for transaction request and response between HHTand Intermediate server

Cardholder-originated transactions include withdrawal, deposit, refund,reversal, balance inquiry, payments and inter-account transfers.Reconciliation of transactions of BC account and customer account

Standards for checking the validity of the card in HHT and routing oftransaction from Intermediate server to other bank server


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Standardization in Security

Enrollment station

Security of data stored on the system Secured mode of data transmission to server

Hand Held Terminal

Authentication of business correspondent & Customer

Standards for Fingerprint scanning / threshold of match forauthentication of customer

Secure transfer of Data between HHT and smartcard

Secure interaction between HHT and Intermediate Server

Intermediate server

Security of data


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Technology Standardization aspects ofTechnology Standardization aspects of

Smart cardSmart cardParameter Contact Contact-less

Interface Physical Electrical Contact RF (13.56MHz)

Standard ISO 7816 ISO 14443 A

Deployment (approx) 3 Bn (mature, single digit growth) 1.5 Bn growing at 25-30% CAGR

Applications GSM SIM, EMV Dual Interface cards Ticketing, Id cards, e-passports, loyalty & e-purse, VISAWave, Master card Pay pass cards

Security Can support DES / 3 DES / AES / PKI Can support Dual Authentication / 3 pass authentication /DES / 3 DES / AES / PKI

External Authentication Can support Biometrics Can Support Biometrics

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Standardization of Integrated Hand HeldStandardization of Integrated Hand HeldTerminalTerminal

LCD display

Keypad

Optical Biometric Finger print sensor

ISO/IEC 19794-4

Contactless Smart Card reader with Mifare, DESFire,

JACOP, SCOSTA

Thermal printer

Speaker

Connectivity (GPRS/CDMA)

Support Offline/Online transactions

Improved operational efficiency, reliability and better logistics.

Eliminates challenges in identification of defects in multiple

devices.

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Deployment channel -1Card Many Applications

The smart cards can be used for various purpose like Financial inclusion,Merchant Establishments, Government initiatives like Pension, NREGS

disbursement, ATMs, Shopping Malls etc.

ATMs Financial Inclusion

Merchant Establishments

Pension Disbursement

Shopping MallsNREGP Disbursement

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http://images.google.co.in/imgres?imgurl=http://india.gov.in/uploads/spotlight/3.jpg&imgrefurl=http://india.gov.in/spotlight/archive_index.php&h=54&w=54&sz=3&hl=en&start=7&um=1&tbnid=EVRpvoVhOo7EBM:&tbnh=54&tbnw=54&prev=/images?q=rural+employment+guarantee&svnum=30&um=1&hl=en&cr=countryINhttp://images.google.co.in/imgres?imgurl=http://www.b2csolutions.in/smartcard.jpg&imgrefurl=http://www.b2csolutions.in/products.htm&h=80&w=80&sz=4&hl=en&start=11&um=1&tbnid=FeF96M1P2VB_FM:&tbnh=74&tbnw=74&prev=/images?q=smartcard&svnum=30&um=1&hl=en&cr=countryINhttp://images.google.co.in/imgres?imgurl=http://www.financialservicesins.com/images/images/atm.jpg&imgrefurl=http://www.financialservicesins.com/products/prod18.htm&h=451&w=451&sz=53&hl=en&start=8&um=1&tbnid=QMWdodYiQbVJ8M:&tbnh=127&tbnw=127&prev=/images?q=merchants+using+credit+card&svnum=10&um=1&hl=enhttp://images.google.co.in/imgres?imgurl=http://www.protx.com/images/right_small.jpg&imgrefurl=http://www.protx.com/smallbusiness/02_merchant.asp&h=170&w=113&sz=12&hl=en&start=108&um=1&tbnid=Ursgu3V9UM1UsM:&tbnh=99&tbnw=66&prev=/images?q=bank+merchant+terminal&start=90&ndsp=18&svnum=10&um=1&hl=en&sa=Nhttp://images.google.co.in/imgres?imgurl=http://www.merchantservicestotal.com/Verifone_omni_3200.jpg&imgrefurl=http://www.merchantservicestotal.com/verifonecreditcardmachineterminal.html&h=355&w=400&sz=25&hl=en&start=10&um=1&tbnid=0RVGwSKnRrHwwM:&tbnh=110&tbnw=124&prev=/images?q=bank+merchant+terminal&svnum=10&um=1&hl=enhttp://images.google.co.in/imgres?imgurl=http://www.mticom.com/images/large_plexis_pos.jpg&imgrefurl=http://www.mticom.com/pos_pizza.htm&h=512&w=610&sz=47&hl=en&start=14&um=1&tbnid=TdGLEGE6bnfKjM:&tbnh=114&tbnw=136&prev=/images?q=pos+at+shops&svnum=10&um=1&hl=en


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Achieving Synergies - Integration

Technology Providers

Service Providers

Chip Manufacturers

Card Manufacturers

Device Manufacturers Software companies

Application Developers

Systems Integrators

Banking Channels

Smart Phone

ATM

Point of Sale Termnial Personal Computer

Telephone

Mobile phone

Set-top Boxes Kiosks

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Contact details:

N. BHARATH BHUSHAN REDDYDEPUTY GENERAL MANAGER

DEPT. OF INFORMATION TECHNOLOGY

ANDHRA BANK, HEAD OFFICE,

HYDERABAD

[email protected]

[email protected]

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