By Shikhar Aggarwal, Chairman, BLS E-Services Ltd.
Financial inclusion in India has always hit the same two walls, which are reaching people beyond cities and getting them to trust the system once they are there. Millions have bank accounts now, but stable access to financial services is still a problem, especially in rural and tier 2,3,4 areas. Business Correspondents (BCs) bridge that lag as they are local agents who handle banking and government services. What has made them effective is technology such as artificial intelligence, data analytics, and proper governance frameworks.
From Field Agents to Partners in the System
BCs used to do simple cash deposits and withdrawals. This role is evolving now; they manage digital payments, loan disbursals, account management, etc. These BCs are embedded in the financial infrastructure.
Technology is facilitating this. AI platforms check transactions, spot problems. Data analytics show transaction patterns, what customers need. These tools make them better at the job. Things get more accurate, faster. Users notice, and that builds trust.
Policy Built the Foundation
Government programs provide a framework for last-mile trust. Pradhan Mantri Jan Dhan Yojana (PMJDY) opened over 550 million accounts by FY 2024-25. Direct Benefit Transfer (DBT) programs deliver money straight to households, giving BCs a constant flow of transactions to handle. The numbers are massive.
Scale like that needs oversight. With millions of accounts, thousands of touchpoints, you need monitoring, compliance checks. Without structure, it falls apart. Technology and governance provide that structure, set standards, cut risk across the network.
AI and Data Enhance Operations at Ground Level
Technology is fundamental to boosting the efficiency and security of BC agent networks. Tools like real-time dashboards are vital for agents to monitor transactions, immediately identify irregularities, and resolve operational issues. The integration of Artificial Intelligence (AI) is key, as it helps verify identities, enforce transaction limits, guide complex procedures, and proactively flag potential risks by analysing data. This robust technological backing ensures reliable and functional services for citizens, ultimately building trust in both the individual agent and the broader financial system.
To support the massive scale and reach of the agent network across the country, a substantial amount of specialised electronic equipment is essential for secure and seamless service delivery. The required technology spans a wide range, including Computers, Cash Counting Machines, and CCTV Systems, alongside dedicated Secure Identity & Biometric Systems (Face, Iris, and Fingerprint authentication). The network’s integrity relies on Geo-Fencing Systems (GPS), Micro ATMs, Passbook Printers, and secure Handheld Devices for field operations. Moreover, robust Broadband connectors, Firewall systems, and Cyber Security (Edge computing) are crucial for network integrity. Ancillary systems like Vernacular Voice Prompts (Soundbox), Counterfeit Currency Note Detectors, and Audio-Visual devices (SmartTV) for digital literacy further enhance the capabilities of the agent and the user experience.
Governance mechanisms maintain accountability
Audit ratings, performance reviews, and compliance checks maintain standards, while incentives push participation. Women BCs get higher commissions. Rating systems for BC points keep service delivery consistent across locations.
Technology, data, and governance work together without diminishing human judgment. Technology handles precision and speed. Data informs choices. Governance enforces accountability. Human judgment stays central. This balance makes trust work at scale.
Digital Payments Demonstrate the Model
UPI transactions reached 131 billion in FY 2023-24. Projections show 439 billion by FY 2028-29, 91 percent of retail digital transactions. Total digital payments should jump from 159 billion to 481 billion in that window.
BCs provide the last-mile access. AI watches for transaction problems. Data shows what’s happening. Governance keeps everyone honest. Citizens find it reliable, which strengthens confidence in the technology and the agents. Each supports the other.
Beyond Banking Services
BCs now handle government services, healthcare programs, etc. Putting multiple services in one place cuts friction dramatically. Citizens don’t bounce between offices or navigate different bureaucracies. Phygital hubs, physical presence plus digital tools, let BCs manage diverse services without breaking down.
This integration multiplies trust. Financial and civic services come through one channel. Simpler, more predictable. When things work consistently, people start using them. People who avoided formal systems begin relying on them. That’s actual inclusion, not just paperwork.
Elements That Sustain Last-Mile Trust
Building last-mile trust requires consistency, transparency, and reliability, delivered through the integration of AI, data, and governance alongside human agents. Technology ensures accuracy, data guides decisions, and governance enforces accountability, all of which instill confidence and support national goals like rural employment and Digital India. Scaling this requires collaboration between banks, fintechs, and the government, ensuring field agents are well-equipped and performance is constantly monitored. As demonstrated by India’s BC network, technology and people are complementary, amplifying human capabilities to deliver dependable services even in remote areas. The core challenge is maintaining this balance—increasing services and agents without sacrificing the fundamental consistency that builds trust. When successful, financial inclusion becomes meaningful participation in a reliable system, where policy meets people and trust is ultimately built person-to-person through every reliable transaction.