Zerodha co-founder Nithin Kamath points out that fintech platforms have aided financial inclusion in India, especially in rural areas, yet challenges of digital onboarding continue. He advocates for user-centric technology designs that address limitations and support vulnerable communities without causing disruptions.
In a post on the social media platform X, Kamath said, “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.”
Issues faced by digital systems
Highlighting the challenges of digital platforms, Kamath noted, “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.”
According to Kamath, digitisation has minimised fraud and wastage, but no technology implementation is flawless.
“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,” he said.
He added, “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.”
Kamath further noted that technology has trade-offs, particularly in rural India, where economically vulnerable populations live. Balancing benefits and harms is crucial, as even minor disruptions can negatively impact daily life amid ongoing financial inclusion efforts.
What should be done?
He advocated for developing user-focused technologies using a first-principles, “graceful degradation” approach. This becomes increasingly important in the case of public technology designed for citizen services. It is essential to recognise the limitations of various technologies and carefully plan alternatives that reduce disruptions and preserve the hard-won benefits that these digital systems have provided to all Indians.
What do netizens say?
Several social media users have reacted to Kamath’s post, where most agree with his sentiment.
One of the users wrote, “We see the promise — and the ground reality. Digital onboarding widened access, but in rural parts, the reality is very different: flaky networks, failed biometrics, and opaque fallbacks push people back into queues. We must design for failure-first: offline paths, human handholds, and local trust.”
Another added, “Well said. Digital onboarding has been a game-changer for financial inclusion, but acknowledging the gaps and designing for rural users is what will make it truly impactful.”
A user noted, “Absolutely agree! The digital onboarding initiatives have really transformed financial accessibility in India, unlocking immense potential in Tier 2 and 3 cities. It’s exciting to witness such progress.”
