The entire Indian financial services industry, including Zerodha, has been a massive beneficiary of the ease of digital onboarding via Aadhaar e-Sign, eKYC, etc. It has been a big reason for the increase in financial inclusion among Tier 2 and 3 cities and rural parts of the country; people who had not previously interacted with the formal financial system.

While many of us take the benefits of these digital systems for granted, being in a city like Bengaluru (and a position of privilege), I was surprised by the extent of challenges with OTP verification and the physical/biometric side of these systems until I read articles like these in The Times of India and elsewhere. While digitisation has helped reduce fraud, leakages, and wastage, no single implementation of technology can be perfect. SEBI, for instance, has strict regulations that mandate brokers to offer services via multiple modes, not just a single interface like an app.

Biometric devices, in particular, even under ideal conditions, sometimes do not work as intended. The other challenge is with OTPs. People in remote parts of India still struggle with mobile connectivity, leading to delays in verification and the disbursal of benefits. These technological systems tend to affect the poor and vulnerable the most.

No technology is perfect, and there are always trade-offs. The trick is to balance out the benefits and potential harms, especially in rural parts of India where most Indians who are economically vulnerable reside. Even minor disruptions to daily lives can have unintended negative side effects, especially when multiple national efforts for financial inclusion and economic upliftment are underway.

At Zerodha, we have long been proponents of building technologies to be user-centric with a first-principle, “graceful degradation” approach. It becomes exponentially more critical in the case of public technology built for citizen services. It is important that we understand the limitations of various technologies and design carefully planned alternatives that minimize disruptions and preserve the hard-won benefits that these digital systems have accrued to all Indians.

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