Digital financial tools are growing in importance across economies as technology becomes universal, accessible, and connected. These digital financial tools rest on Digital Public Infrastructures or DPIs, best described as a stack of shared digital systems that are secure, interoperable, and built on open standards.
DPIs offer a promising approach to fostering inclusive economies and empowering vulnerable individuals through essential public and private services for the common good. The India Stack exemplifies this approach, combining digital ID (Aadhaar), interoperable payments (Unified Payments Interface), a digital credentials ledger, and account aggregation.
In just six years, India has achieved a remarkable 80% financial inclusion rate—a feat that would have taken nearly five decades without a DPI approach.
Are women truly reaping the benefits of DPI?
Globally, over 1.4 billion adults – mostly women – are still excluded from the financial ecosystem. In India, women are 8 per cent less likely than men to own a mobile phone, and 20 per cent less likely to use the internet on a mobile device. Patriarchal societal norms and information literacy gaps are particularly acute for low-income women.
This leaves women fewer avenues to learn digital financial skills and restricts spaces where they can make independent financial decisions. Women’s engagement with DPI and financial services will only be enhanced when they develop confidence along with digital and financial capabilities (DFC).
Unless the design and usage of platforms and tools that make up the DPI are gender-intentional and systematically include women, the true benefits will not match the massive scale and urgency of addressing the exclusion of women.
Below are a few ways in which this digital and economic exclusion of women can be reduced and countries can truly make their digital public infrastructures for financial services work for women:
Design appropriate and affordable financial products and services for women: Women have different financial and non-financial needs depending on where they are in their life cycles. The design and implementation of digital financial services and systems must account for women’s time poverty and unpaid labour. FSPs can address financial inequalities by designing women-centred products and services.
FSPs that also invest in building the DFC of women users through a ‘tech and touch approach’ including onboarding women, offering learn-by-doing opportunities, sending reminders or built-in incentives to drive usage, can tap into a large and ‘stickier’ customer base.
Encouraging women to use national Integrated Payment System (IPS): Targeted outreach to unbanked and underbanked women by facilitating low-value digital payments and remittances can leapfrog women’s engagement with formal financial services. Some examples include the Unified Payments Interface in India, PIX in Brazil, and wallet technology service providers in other countries such as Bangladesh that provide instant payment services. Since it is challenging to obtain gender-disaggregated data from an IPS, countries must look at a gender-responsive approach to drive usage among unbanked and underbanked women.
Digitize all G2P payments and social benefits: All safety net payments and social protection measures can reach the most vulnerable populations when delivered digitally. The Pradhan Mantri Jan Dhan Yojana (PMJDY) which brought many Indians to formal banking, worked especially effectively during the pandemic. Through Women’s World Banking’s savings mobilization, Jan Dhan Plus Solutions, we learnt that many women opened their Jan Dhan accounts to receive their direct benefit transfers or other relief payments during the lockdowns.
Gender-Responsive Public Procurement Practices: Gender-responsive public procurement practices are vital, given the socio-cultural challenges faced by women in areas such as formal identification, digital financial capability, smartphone access, and mobile networks, hindering their economic empowerment.
Various stakeholders, including the government, regulators, Financial Service Providers (FSPs), and civil society, need to prioritize Gender-Responsive Procurement Initiatives and technological innovations to level the playing field. To prioritize gender equity in procurement practices and set measurable targets, India can establish a Gender-Responsive Sourcing Advisory Facility to provide training for women MSMEs in selling through e-commerce platforms and fulfilling online contracts.
India’s Government marketplace (GEM) has already made strides in promoting women entrepreneurs through its “Womaniya” initiative. Over 140,000 women entrepreneurs have registered on the platform since 2019, fulfilling orders worth $2.6 billion. The Open Network for Digital Commerce (ONDC) allows seamless interaction among buyers, sellers, and vendors across e-commerce platforms, eliminating the need for parties to be on the same platform for transactions.
Hire women as banking agents: Through the Jan Dhan Plus solution with three Public Sector Banks we learnt that the Business Correspondents (BC) channel is the most effective one to render formal banking services to the last mile and when the BC agent engages effectively with women customers, she or he can encourage regular savings, adopt insurance and pension.
The World Bank has noted that women are more likely to use financial services when they are assisted by female banking staff employees and mobile money agents. However, as per the latest reports by India’s Department of Financial Services, only 18 per cent of the agent network consists of women. There is a commitment among public sector banks to increase that to at least 30per cent by 2025.
This is also the reason that public sector banks are collaborating with state rural livelihoods missions (SRLM) across India to identify eligible women from self-help groups to be trained to become BC Sakhis or agents. For instance, UMED-Maharashtra SRLM has committed to recruiting over 16000 BC Sakhis to ensure the financial inclusion of women, particularly at the last mile. NABARD also aims to strengthen the capacities of the BC agent network connected with its Regional Rural Banks (RRBs) to better serve low-income women customers.
Create and enforce strong consumer protection and dispute mechanisms: To earn the trust of risk-conscious and discerning women in financial matters, financial service providers (FSPs) must prioritize consumer financial awareness, transparent communication on pricing and product details, and robust data security.
The Reserve Bank of India has articulated five key principles for FSPs to adhere to: fair treatment, transparent dealings, suitability, privacy, and effective grievance resolution. Embracing these principles enables banks and FSPs to build trust among women consumers by boosting financial awareness, clarifying pricing and terms, and fortifying data security.
Furthermore, establishing efficient dispute resolution mechanisms is crucial in empowering women to confidently embrace digital financial services.
DPIs can truly work for women when all financial services are integrated; they are seamlessly connected via digital processes; and are frictionless and efficient. These result in productivity gains in the form of increased efficiencies for the government as well as for FSPs.
DPIs facilitate access to large pools of customisable data that can aid design of innovative products and distribution channels. During India’s Presidency, the G20 Digital Economy Working Group highlighted India’s DPI as pivotal in broadening markets and addressing gaps in financial inclusion, significantly impacting social, economic, digital, and sustainable development goals.
Notably, there’s a focused drive to make these platforms gender intentional. For instance National Payments Corporation of India (NPCI) and Women’s World Banking have partnered to onboard the next 200 million low-income women in rural and semi-urban India who have both bank accounts and mobile phones. We hope that India’s DPI will be a prime example of women’s financial inclusion and economic empowerment.
(The two authors are part of Women’s World Banking; Views are personal)
