Diffusion of Electronic Banking Solutions for Financial Inclusion

A major pain point of the banking industry is the challenge of how to penetrate the Bottom of the Pyramid (BoP), a concept which was popularized by Prahlad [3]. This indeed is a sizeable market, consisting of 2.5 billion people who live on less than US$2.50 per day. Technology is being heralded as a major enabler for the diffusion of banking solutions in this segment, and the same is being brought about by different types of electronic payment systems.

It is interesting to note how in emerging economies, diffusion of these technologies are creating benefits for this segment [4]. No wonder technology vendors and service providers are rallying to get a big pie of this cake and research in this topic has increased significantly [1,2]. However, the risks of fraud and perceived usefulness of these technology are slowing down the diffusion of the same in these economies. Another major barrier is internet penetration, which is significantly low, in developing economies, especially in the rural segments.

However, the development of banking solutions which can be used through Mobile based technologies, can significantly eradicate these problems. The adoption and penetration of mobile phones is significantly larger than internet based technologies. Hence technology giants like IBM and Microsoft are investigating significantly on research, so that mobile payment solutions can be made available to this segment. Some of the major technological advancements which are attempting to address this gap are speech technologies like the spoken web. It would indeed be interesting to see how such technologies can bring about inclusive development in the banking and financial services industry. Indeed the adoption of these technologies can bring about financial inclusion for the general masses by enabling banking solutions for this segment.


  1. Kar, A. (2009). eBusiness Enablement: Implications for Business Strategy. Available at SSRN 1432433.
  2. Kar, A. (2009). The Past, Present and Future of Information Systems Research. Available at SSRN 1366962
  3. Prahalad, C. K., & Hart, S. L. (2002). The Fortune at the Bottom of the Pyramid. Strategy and Business, 54-54.
  4. Simpson, J. (2002). The impact of the Internet in banking: observations and evidence from developed and emerging markets. Telematics and Informatics, 19(4), 315-330.

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Dr. Kar is an Assistant Professor of the Information Systems & Management area in one of the top 5 universities of Asia (IIT). He has extensive experience in teaching, training, consultancy and research. He has over 50 high impact research papers with hundreds of citations. He has earlier been an Assistant Professor in an IIM. Prior to joining academia, he has rich experience in Cognizant Business Consulting and IBM Research Laboratory. He is the Editor of Business Fundas.