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Who is responsible? Closing the accountability gap in financial fraud prevention

Posted on by Nashrah Shareef

Financial fraud is a systemic problem being addressed by individual solutions. Across most markets, the response to a scam victim is to report it to the bank, file a police complaint, submit evidence to a regulator, and hope. Meanwhile, the fraud operation that targeted that victim is already processing the next call, the next transfer, and the next cash-out.  

Fraud ecosystems have been deliberately engineered to move faster than the institutions designed to stop them. Banks and regulators need to move beyond better awareness campaigns or faster forms of grievance management to close this gap. It requires a fundamental redesign of accountability and understanding of who is responsible for what and when in the transaction chain.  

The blind spots across the ecosystem  

The accountability gap is not located in a single institution. Rather, it runs across the entire ecosystem, where each actor’s blind spot enables the next fraud.  

Banks are positioned closest to the transaction, which should make them the most effective line of defense. Yet most fraud detection systems are calibrated to identify unauthorized transactions, such as credential theft, account takeover, and card skimming. Authorized push payment (APP) fraud is another type of fraud in a completely different category, where the victim is manipulated into initiating a payment themselves. APP bypasses most conventional controls.  MSC’s Mind the Gap report found that more than 60% of fraud victims across India, Bangladesh, and Kenya did not know what grievance mechanisms existed. 48% of victims who attempted to report were dismissed for their inability to furnish evidence. 

Existing grievance resolution systems are largely designed around what the institution needs and not what the victim can provide. MSC’s consumer protection research in India has consistently documented this gap across the financial services lifecycle. We have traced the cycle from transparency of product terms at onboarding, to the accessibility of recourse channels post-harm. Our customer protection in the Indian digital financial services series mapped specific failure points related to recourse and transparency that leave customers without an effective remedy when things go wrong.  

In India specifically, the Prevention of Money Laundering Act (PMLA) creates a structural paralysis, as banks cannot freeze suspected mule accounts without authorization from the court or law enforcement. This creates a legally mandated delay that fraudsters systematically exploit. The IBA Working Group has proposed that banks be granted enhanced authority to place temporary holds on suspected mule accounts before formal orders arrive, which is a necessary regulatory design reform that remains pending.  

Fraud is also rampant in the telecom sector. Caller ID spoofing, SIM swaps, and the leasing of backend numbers to route fraudulent calls are all examples of vulnerabilities at the telecom layer. The UK’s Ofcom interventions show that these are solvable. Regulators can impose mandatory blocking of international calls that fake domestic numbers, block invalid caller IDs, and ban leasing backend numbers used to hijack calls. Although these are technical controls with measurable impact, most jurisdictions have not implemented them.  

Digital platforms, such as social media, messaging apps, and digital marketplaces, are another source of most scams. Yet, platform accountability for fraud from their infrastructure remains largely voluntary. Recorded Future’s 2024 Payment Fraud Report identified nearly 1,200 scam domains linked to fraudulent merchant accounts and nearly 11,000 e-commerce domains infected by Magecart skimmers. This is a threefold increase from 2023. Takedown times for fraudulent pages are measured in days, while scam operations are measured in hours.  

MSC’s Building trust through design report adds another perspective. Deceptive interface design, which comprises manipulative consent flows, hidden fees, and guilt-tripping prompts, erodes user agency and creates conditions for external fraud to thrive. Regulatory accountability must extend to the design layer, not only to obviously illegal content.  

Even where consumers know how to report, the system often fails them. MSC’s TRUST framework identifies the precise dimensions in which most grievance systems fail. Transparency suffers when consumers do not understand the terms they agreed to. Consumers lose recourse when complaint channels close, require multiple steps, or operate in a language they do not speak. They face information asymmetry at every point, which undermines their ability to understand what happened. Security investments fall behind. And once fraud occurs, timeliness matters most, yet procedural compliance systematically sacrifices it. 

What effective accountability looks like  

Three jurisdictions have moved furthest towards a systemic accountability model. Their approaches converge on the common principle that fraud prevention is a shared responsibility across the transaction chain, not a consumer obligation.  

Since October 2024, payment service providers in the UK must reimburse APP fraud victims more than USD 100,000, with costs split between sending and receiving banks. The one-year assessment showed that reimbursement alone is insufficient, as it simply compensates victims but fails to break the criminal business model. The more impactful interventions have been at the telecom layer, such as caller ID blocks, filters for invalid numbers, and requirements for operators to verify business customers. 

In Australia, the Scams Prevention Framework was passed in early 2025. It requires banks, telcos, and digital platforms to implement defined controls or bear liability for losses, with penalties of more than USD 35 million or 30% of turnover during the breach period. It includes digital platforms as designated entities and becomes the first framework to formally extend accountability to the channels where scams originate.  

Singapore’s Shared Responsibility Framework, effective December 2024, allocates liability in a defined sequence. In it, liability falls first on the financial institution, then on the telecom operator, and finally on the consumer. This can occur only if both institutions have fulfilled their obligations. This waterfall model establishes clear, predictable accountability for each actor and upholds the principle that consumers should not bear losses when institutions have failed in their duties.  

What behaviorally informed prevention actually requires  

Accountability frameworks set the incentive structure. But institutions and regulators must make different design decisions to build the actual prevention architecture. 

  • Contextual friction, not generic warnings: Transaction-level interventions, such as cooling-off periods for high-risk payments, purpose prompts, and real-time behavioral flags, are demonstrably more effective than warning messages delivered at onboarding. India’s NPCI removed P2P UPI collect requests, a concrete example of friction designed into the system.  
  • Cross-institutional intelligence sharing: Mule account registries, cross-bank fraud signals, and real-time data sharing between banks, telcos, and platforms turn individual detection into network-level prevention. India’s MuleHunter.AI at the RBI Innovation Hub is an early example of this direction.  
  • SupTech and RegTech investment: MSC’s SupTech data maturity framework finds that one-third of regulators still rely on manual submissions, and fewer than 10% of smaller jurisdictions have full data standardization. The limiting factor is data quality. Many authorities validate data manually. Regulators cannot supervise what they cannot measure. Fraud cannot be detected if reporting systems lag transactions by weeks.  
  • Capability-building as a regulatory obligation: Financial literacy must shift from a CSR activity to a mandatory, measurable output. To address this, MSC’s PTE Framework offers a practical model for how phygital capability delivery driven by teachable moments can be designed, contextualized, and evaluated across diverse user segments. 
  • Victim-centered grievance design: Regulators can use the MSC TRUST framework to redesign grievance resolution systems to build solutions from the victim’s perspective. These should be accessible in local languages, multi-channel, credible, and be able to initiate protective holds without a court order.  

The way forward 

Fraud today is institutionally tolerated due to design fragmentation: Banks are responsible for transactions, telcos are responsible for calls, platforms are responsible for content, and regulators are responsible for their own sectors. In the space between those silos, fraud operations run freely.  

The evidence from the UK, Australia, and Singapore, and from MSC’s field research across Asia, Africa, and the Pacific, proves that institutions must design protection into the transaction rather than just bolt it on. It also requires a grievance management system built for the person who has just been deceived, not for the institution that manages its liability. 

The fraud supply chain is end-to-end, and the protection system that counters it must reflect this reality. 

This is Blog 3 of a three-part MSC series on fraud supply chains. Blog 1 examined why ordinary people fall for fraud. Blog 2 examined how fraud operations are industrialized and monetized.  

The operational machine: How financial fraud is industrialized, scripted, and monetized before protection systems can respond

Posted on by Nashrah Shareef

Somewhere in a compound in Myanmar or Cambodia, a team of workers, many of them trafficked, sits at a screen following a script. They know exactly what to say, when to escalate, how to handle a hesitant victim, and when to hand the call to a “supervisor” for added authority. They are not criminals in any conventional sense. They are employees of a fraud enterprise, one that has refined its operations through feedback loops, performance metrics, and iterative script improvement in the same way a legitimate call center would.  

 In 2025, the reality of financial fraud is a supply chain that we have to understand before we can disrupt it. The supply chain moves through distinct levels. Fraudsters target victims, exploit their vulnerabilities, execute the fraud, and cash out through formal transaction channels. 

 The organizational structure of fraud as an industry 

In 2024, Americans lost at least USD 10 billion to fraud operations run from call center farms, as per US State Department estimates. These farms are human compounds where operators force workers to perpetrate fraud under the threat of violence. The UN estimates more than 200,000 people are held in such scam compounds across Southeast Asia.  

 These fraudsters are well organized and operate with a clear division of labor. They have:  

  • Lead generators who source and segment victim databases from data leaks, scraped job portals, and purchased call lists from the black market; 
  • Callers and script operators who execute the opening approach, build rapport, and identify the most responsive targets;  
  • Escalation specialists and fake supervisors who add authority at the critical decision moment, which breaks the remaining resistance;  
  • Technical enablers who manage spoofed caller IDs, remote access tools, fake KYC portals, and cloned banking interfaces; 
  • Mule handlers and cash-out specialists who receive and rapidly move funds out of the banking system before detection is possible.  

  Fraud networks continuously use performance data to refine scripts. These are based on which phrases work, where victims hesitate, and when they drop off. AU10TIX’s fraud evolution analysis notes that networks copy and scale high-performing scripts, which is why remarkably similar scam variants appear simultaneously across geographically distant markets. This is not a coincidence, but a result of franchising.  

 How is the agent layer exploited?  

In emerging markets, the last-mile agent network is both a financial inclusion asset and a vulnerability prone to fraud. MSC’s long-running research on DFS agent fraud across Uganda, Kenya, Bangladesh, and India has documented that fraudsters exploit agents at two levels. They are often unwitting entry points for fraudsters who manipulate them into assisting transactions, and as active participants in fraud rings that exploit their privileged system access.  

 In India, the AePS (Aadhaar-enabled Payment System) layer is particularly exposed. Our dedicated AePS fraud analysis found that AePS-related fraud accounts for 11% of 1.13 million reported cases, which equals INR 823.74 crore or USD 98 million approximately. Surprisingly, some providers reported up to 20 times more fraud than others as a percentage of their total transaction volume. This variance is not random. It reflects systematic exploitation of weaker-controlled agent channels, where biometric spoofing, cloned fingerprints, and social engineering of agents combine to drain accounts at scale.  

 The agent layer is where the first line of consumer interaction occurs for the most vulnerable users. Oral, semi-literate, and rural populations rely on agent mediation rather than self-initiated digital transactions. MSC’s research on customer vulnerability and trust in Indian digital financial services (DFS) found that agents in some villages set the same PIN, such as 1234 or 5555, for every user they onboarded. This vulnerability is systemic. It stems from a convenience-over-security trade-off that defines last-mile delivery, and fraud networks are quick to exploit it. 

 What are the tools that enable manipulation? 

The industrialization of fraud is inseparable from its technical infrastructure. The toolkit has become both more accessible and more sophisticated simultaneously.  

Fraud-as-a-Service platforms now operate like SaaS companies, and include subscription pricing, modular attack kits, customer support, and feature roadmaps. A small-time fraudster can subscribe for as little as USD 50 per month to access enterprise-grade phishing templates, synthetic identity generators, deepfake toolkits, and on-demand botnets. The barrier to entry has collapsed.  

 The core technical instruments in play are:  

  • Caller ID spoofing and SIM swaps, which make calls appear to originate from legitimate bank or government numbers. 
  • Remote access trojans (RATs), which give fraudsters live control of a victim’s device. Credit unions in the US reported a 55% increase in RAT-enabled fraud in 2025, now 15% of all credit union fraud.  
  • Fake KYC portals and cloned banking interfaces, which are designed to harvest credentials in real time while appearing to resolve a legitimate problem. 
  • Dark patterns and deceptive UI exploit the same cognitive vulnerabilities as scam calls. MSC’s Building Trust Through Design report identifies five manipulative interface tactics. These include guilt-tripping, hidden fees, and forced bundling fraudsters use to manipulate users through apparently legitimate platforms. When deceptive design is embedded within those platforms, the boundary between platform fraud and external scam dissolves. 

 In India, the technical layer is specifically tuned to the United Payments Interface (UPI) infrastructure. Research by CUTS International exposes malicious apps that train mules to use bank-specific UPI apps, register UPI IDs with different mobile numbers to intercept OTPs, and use merchant payment addresses to make transactions appear legitimate. The system even provides scripts for mules to follow when questioned by bank officials and acts as a supply chain within a supply chain.  

 The money supply chain: From transfer to disappearance  

The moment a victim authorizes a payment, a second one begins, designed to make that money irretrievable within minutes.  

 The flow is precise: funds arrive in a mule account, are immediately redistributed across multiple secondary accounts, converted to stablecoins, cryptocurrency, or prepaid instruments through weak-KYC exchanges, and withdrawn through agents. BioCatch’s 2025 Digital Banking Fraud report documents that by mid-2025, stablecoins accounted for 63% of all illicit on-chain transactions, with an estimated USD 649 billion in fraudulent flows. Unlike volatile cryptocurrencies, stablecoins offer criminals dollar-pegged stability combined with instant, irreversible transfers that bypass traditional SWIFT monitoring and AML controls.  

 The mule network is expanding at an alarming speed. US financial institutions reported a 168% surge in confirmed money laundering cases in the first half of 2025. In India, mule recruitment operates as a Telegram-based pyramid scheme. Agents recruit participants who want easy money to move funds through their accounts and often do not understand the legal exposure they carry. When accounts are frozen, the fraud network provides recovery scripts. When accounts are closed, new ones are opened with fake GST registrations and business certificates.  

 The legal architecture compounds the problem — The Prevention of Money Laundering Act prevents banks from freezing suspected mule accounts without a court order. Fraudsters are acutely aware of this delay and systematically exploit it by moving funds in the window between detection and authorization.  

 The design implication  

Design is one of the most neglected and highest-impact tools available, but it works best as one lever in a larger system. Regulators, platforms, and banks must intervene and disrupt the fraud supply chain at multiple nodes simultaneously, not just educate consumers at the end of the chain. The operational machine is built on the assumption that detection will be slow, mule accounts will remain open long enough to be cleared, legal channels will create delays, and victims will be too ashamed or confused to report quickly.  

 The question is not whether we can outpace the fraud supply chain. It is whether we can redesign the protection system with the same rigor that the fraud supply chain has been built.  

This is Blog 2 of a three-part MSC series on fraud supply chains. Blog 1 examined why ordinary people fall for fraud. Blog 3 highlights the accountability gap in financial fraud prevention.

Scammed by design: Why ordinary people fall for fraud and why awareness campaigns will not fix it

Posted on by harshita

The phone rings, and the call seems routine. It could either be a bank representative who confirms your account details or a courier company that verifies your address for a pending delivery. This call could also be from a government official who warns that your Aadhaar number has been flagged for suspicious activity and you must act within the hour.  

None of these calls feels like fraud, and that is precisely the point.  

Financial fraud is no longer opportunistic, as it is a precision-engineered behavioral system. These fraudsters study how trust is built, urgency clouds judgment, and shame keeps victims silent. Solutions will fail until we treat fraud as a psychological problem rather than an information problem. 

Fraudsters succeed when they act unremarkably rather than suspiciously. The scammers study the language, cadence, and escalation patterns of real institutions and replicate them accurately. These institutions include banks, telecom operators, government agencies, and couriers. By the time a victim senses something is wrong, they have already been lured into a pre-planned conversation. 

Our 2024 report on consumer protection in digital financial services (DFS) across India, Bangladesh, and Kenya highlighted key patterns of exposure to fraud. This report found that 55% of low- and moderate-income respondents had received fake calls or SMS messages that mimicked legitimate institutions. The most common types were impersonation scams and attempts to compromise personal identification numbers (PINs), which require no technical sophistication on the fraudster’s part. They only need a script that convinces and the right moment. 

The research across the three countries also shows that more than 60% of respondents did not know what to do after fraud occurs. Crucially, the research revealed that complaints about financial fraud often fall under multiple jurisdictions, which include financial service providers (FSPs), financial regulators, and law enforcement agencies. Victims or customers often do not know about these jurisdictional boundaries, which leads them to file complaints with the wrong authority and results in unresolved grievances and complaint rejections. 

Artificial intelligence (AI) now outpaces consumer awareness of fraud tactics. Feedzai’s 2025 research found that voice cloning represents the most common form of AI-powered fraud reported by financial professionals globally, cited by 60% of respondents. Deepfake-related fraud surged 1,740% between 2022 and 2023. In the most high-profile case of the decade, UK-based engineering firm Arup lost USD 25.5 million to a deepfake scam. A finance worker approved 15 wire transfers during what appeared to be a routine video call, where every other participant was an AI-generated deepfake.  

Most evidence on AI-enabled fraud focuses on global trends. However, early signals from markets, such as India, indicate growing exposure to AI-enabled fraud through impersonation scams, synthetic identities, and social engineering. This trend underscores the need for proactive safeguards within digital financial systems, even in contexts where large-scale incidents may not yet be fully documented. 

The crisis has moved beyond simple phishing and hurts trust in the most insidious way possible. We must examine how fraudsters manipulate the human mind to understand why people fall for fraud. It comes down to three reliably exploitable mechanisms: Authority, urgency, and fear.  

Humans are prone to comply with credible authority figures. A caller who quotes an account number, references a recent transaction, and uses the correct department name instantly bypasses our skepticism. Research shows that victims fall for fraud when the signal environment is constructed to resemble legitimacy rather than due to carelessness. In India, the impersonation of Central Bureau of Investigation (CBI) officers, Telecom Regulatory Authority of India (TRAI) officials, and bank fraud departments is now a scripted, scalable operation.  

Yet, fraudsters do not wield authority solely through phone calls. MSC’s 2025 report on dark patterns in DFS documents how deceptive interface design exploits the same authority dynamic within legitimate-looking platforms. This design includes guilt-tripping language, hidden fees, and misleading consent flows. The line between dark patterns and fraud is thinner than most regulators acknowledge.  

Deliberation is the enemy of fraud, as the instruction to act now is not accidental. The fraudster demands action within 30 minutes, before an account is frozen, or before a penalty applies. It is the single most effective mechanism to suppress verification behavior. ACFE notes that AI-enhanced social engineering has raised clickthrough rates on fraudulent communications by up to 45%, precisely because personalized urgency triggers automatic rather than reflective responses.  

In India, a 67-year-old woman in Hyderabad was kept in effective digital house arrest for 17 days by fraudsters who impersonated crime investigation officers. She lost INR 55 million (USD 600,000) before her family understood what had happened. This case was not an outlier but a documented pattern of coercion-based scams where the fear of legal consequences was weaponized to induce sustained compliance. Once a victim is under the fraudster’s logic, they no longer seek external validation. This fraudster becomes their only trusted guide by design.  

Gender compounds this dynamic. Officials in MSC’s fieldwork on DFS fraud found that fraudsters view women and elderly individuals as easier targets. Most female respondents in this study hesitated to approach authorities on their own and required a male family member to be present. Victims experienced the repeated questions and multiple visits from authorities as barriers rather than as systems of support. After a fraud incident, most female and elderly victims relied on their children or male family members to conduct all online financial transactions on their behalf. Such dependence compounds long-term financial exclusion.  

The most harmful phase of financial fraud is what happens after such incidents. Victims rarely report these frauds immediately due to shame. When they do report these incidents, recovery rates become extremely marginal. 

Academic research published in the Journal of Medical Case Reports in 2025 found that scam victims consistently experience depression, anxiety, shame, and post-traumatic stress disorder (PTSD). These symptoms are comparable to other forms of serious trauma. The victim-blaming that follows from family members, peers, and sometimes even institutions compounds the silence. The National Cybersecurity Alliance has documented that “fraud shame” often causes victims to withdraw from their family entirely, which increases the isolation that made them vulnerable in the first place.  

MSC’s fieldwork on DFS fraud also found that the recovery rate of money lost to fraud remains below 1%. A Local Circles survey found that 74% of fraud victims in India could not recover their losses within three years of the fraud incident. The primary reasons cited were limited awareness of grievance resolution mechanisms, victims’ reluctance to file complaints out of fear of humiliation, and slow, inefficient coordination between banks and cybercrime reporting cells.  

The victims’ silence reflects a structural failure. MSC’s 2024 report also found that more than 60% of fraud victims across India, Bangladesh, and Kenya did not know about the existence of grievance resolution mechanisms in the first place. The 48% of victims who tried to report such fraud had their complaints dismissed due to a lack of evidence.  

The system is not built for the victim’s reality.  

The Global Anti-Scam Alliance’s 2025 report found that 57% of respondents across 42 countries were scammed in the previous year, and 23% lost their money. The gap between what happens and what is recorded exists precisely because shame, confusion, and institutional distrust keep victims quiet.  

The dominant consumer protection paradigm, awareness campaigns, warning messages, and tip sheets, rests on a flawed assumption that people fall for fraud because they lack information. They do not. Instead, they fall for fraud as their cognitive and emotional systems are being expertly manipulated at precisely the moment when they are most vulnerable.  

MSC’s fieldwork on DFS fraud confirms this directly. Most fraud victims expressed lower confidence in DFS after their experiences, and many subsequently relied on family members to conduct transactions on their behalf. Generic awareness campaigns do not rebuild confidence or reach people at the moment of risk. The following four design shifts matter most:  

  • Deliver teachable moments rather than time-distant campaigns: MSC’s digital financial capability framework identifies the points in a user’s journey when they are most receptive. This framework delivers contextually suitable prompts through phygital channels matched to the user’s literacy, access, and trust profile. The phygital, teachable, and engagement (PTE) model offers a practical alternative to one-size-fits-all mass campaigns.  
  • Build simulation instead of information: Scenario-based training and role-play build the muscle memory of skepticism, not just the awareness of risk. MSC’s Helix Institute has designed and delivered such capability-building programs at scale across Asia and Africa.  
  • Embed friction at the point of payment. Nudges for cooling off, transaction purpose prompts, and contextual warnings at the exact moment a high-risk payment is initiated. MSC’s 2025 report on dark patterns in DFS argues that harmful design principles can be inverted to protect consumers when providers are held to an ethical design standard.  
  • Remove stigma from the victim experience: Grievance resolution systems must be designed for the emotional state of a fraud victim. These systems must be compassionate, accessible, and presumptively credible rather than evidence-demanding.  

The design gap between fraud tactics and consumer protection must close. FSPs, regulators, and capability-building practitioners must stop to ask “did we tell them?” rather than ask, “did the design protect them when it mattered?”  

The fraudster already knows the answer to that question. It is time for protection systems to catch up with the fraudsters.  

This is Blog 1 of a three-part MSC series on fraud supply chains.  Blog 2  examines how fraud operations are industrialized, scripted, and monetized.  Blog 3 highlights the accountability gap in financial fraud prevention.

Powering financial inclusion through data intelligence at local levels

Posted on by harshita

“Good data illuminates our world. It can make invisible markets visible.”  

— Charles Marwa, Head, Monitoring and Evaluation, Alliance for Financial Inclusion 

Ownership of a bank account is not the same as an active one. Access to digital payment infrastructure is not the same as consistent use of digital financial services. Yet ensuring that people engage regularly and meaningfully with these services is yet to be fully understood at the levels where it matters.

Over the past decade, India has expanded financial inclusion at scale. Account ownership increased from 35% in 2011 to nearly 89% by 2024. Large-scale initiatives, such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), supported this growth, under which more than 573 million accounts have been opened till December 2025.  

The rapid growth of digital financial infrastructure has complemented this expansion. The Unified Payments Interface (UPI) now accounts for around 49% of the volume of real-time payment system transactions worldwide.

As of 2025, enrolments under the Pradhan Mantri Suraksha Bima Yojana (PMSBY) reached 440.9 million, while the Atal Pension Yojana (APY) reached 65.64 million subscribers. At the national level, these trends signal considerable progress in extending the reach of the formal financial system.

With financial access now widespread, the policy focus has shifted from access to usage. While existing systems capture significant granularity, this rarely surfaces in forms that support local decision-making. Opening accounts or enrolling beneficiaries does not ensure meaningful use, underscoring the need for timely, granular data on usage patterns to inform planning at district and sub-district levels. 

India has a wide array of dashboards and reporting systems tracking financial inclusion across banking, payments, and social security programs, but their usefulness for planning depends on what they present and what remains unavailable at the levels where implementation decisions are made. Evidence-led local planning requires a clear understanding of the strengths and limitations of current financial inclusion (FI) data.

Where existing FI data systems fall short for local planning 

India’s financial inclusion architecture generates large volumes of data across banking, payments, and social security programs. Yet, structural challenges limit how effectively this data informs local planning. While data may be available in many cases, constraints often lie in how granular information is aggregated, presented, and used across different levels of governance.

A primary limitation is the continued reliance on highly aggregated FI data.  The Lead District  Manager(LDM),as the nodal point for financial inclusion at the district level as per the RBI’s Lead Bank Scheme, anchors district-level FI monitoring and planning.  

The LDM typically receives data aggregated at the district level for review and upward reporting. The system offers limited or inconsistent disaggregation by block, gram panchayat, or demographic characteristics, such as gender, age, or occupation. While more granular data may be captured within implementing systems, or in select geographies, systems do not routinely present it in formats that support sub-district analysis. As a result, planning often relies on averages, even in contexts where local conditions may differ sharply. 

Limited visibility of usage as a distinct dimension of financial inclusion. While the systems consistently track access and enrolment indicators, information on how financial services are actually used remains uneven. Usage data has begun to be tracked across parts of the system, but definitions, indicators, and reporting practices vary across programs and geographies. For instance, in states, such as Assam, State Level Banking Committees (SLBCs) have begun to track renewals under the PMJJBY and the PMSBY, while in Madhya Pradesh, the MP SLBC has started to report indicators related to digital transaction volumes.  

Yet, these efforts are not standardized. Even where transaction data is available, systems often present it in aggregate form. As a result, planners cannot identify variation in usage intensity, frequency, or purpose at the block or gram panchayat level, and thus cannot distinguish between nominal account ownership and active usage.  

Gaps between where systems hold FI data and who can use it for plans further compound these challenges. The large volumes of granular data that exist across financial service providers and government systems are not always accessible to district- or block-level planners, while public systems often share data primarily for reporting purposes, it has limited use for analysis. Our work across aspirational blocks also shows that local authorities sometimes aggregate FI data across different parameters, primarily for reporting purposes, which further limits its usefulness for planning. 

In addition, FI data exists across multiple platforms and departments, with limited interoperability. Different agencies maintain program-specific datasets through distinct formats and reporting structures. Platforms, such as Champions of Change, provide granular information on select indicators with a focus on aspirational districts and blocks, while portals, such as the PMJDY dashboard, focus primarily on scheme-specific uptake. While each system serves a specific purpose, greater integration across platforms could enhance their combined use for holistic planning. 

Finally, the capacity to analyze and use available data is limited at the local level. Even where disaggregated data is available, officials may face constraints related to analytical skills, time, or access to user-friendly tools. Systems often present data in formats that officials cannot interpret easily for routine decision-making. This limits its integration into planning processes, such as district consultative committees (DCCs) or block-level reviews. These capacity constraints further reduce the practical value of existing FI data to strengthen usage on the ground. 

Turning data into actionable insights to support local planning  

India’s FI data systems have matured significantly. These now provide greater visibility into access and enrolment across schemes and geographies. As the focus shifts toward usage, continuity, and quality of services, the opportunity now is to strengthen how existing data supports decision-making at the district and block levels. These systems do not need to be built anew, but need a clearer focus on how these are organized and used. 

The following areas highlight where focused improvements in data use can enhance local planning and implementation meaningfully.  

  1. Create a planning-oriented view at the district level using block-level data: District administrations require consolidated view of FI indicators across access and usage, disaggregated to the block level, to support decision-making. Simple analytical tools, including AI-enabled dashboards, can combine indicators such as account activity, digital transactions, insurance renewals, and pension contributions into a single view. This will enable them to identify specific gaps and move away from uniform approaches to focus facilitation efforts. 
  2. Shift the focus from enrolment to sustained usage and continuity: With increased access, the need of the hour is to review usage and continuity indicators, such as account activity, scheme renewals, contribution regularity, and claims settlement. This review provides a clearer picture of financial inclusion outcomes and helps local administrations better understand whether gaps relate to access, service delivery, or user confidence. 
  3. Interpret local data using simple and relevant population benchmarks: Administrations could interpret enrolment and usage data against basic population benchmarks, such as adult population, SHG households, or farmer households. This approach enables a more accurate assessment of coverage levels at the block level. It also helps distinguish between areas nearing saturation and those with meaningful gaps to support better prioritization of local actions. 
  4. Strengthen local capacity to interpret and use financial inclusion data: As data becomes more granular and planning-oriented, district and block administrations require the ability to interpret trends, identify gaps, and decide suitable responses. This includes building familiarity with AI-supported analytics and other user-friendly tools to translate data into actionable insights within routine review processes. If officials strengthen this capacity, they can help ensure that improved data availability translates into better planning decisions. 

These recommendations highlight a clear direction. Financial inclusion efforts should move from tracking access to enabling informed intervention. As these systems continue to evolve, the real opportunity lies in bridging the gap between data availability and its use in planning. These steps are aimed to ensure that financial inclusion translates into meaningful and sustained outcomes on the ground.

Driving transformative financial inclusion across India’s aspirational blocks by unlocking the power of last-mile convergence

Posted on by Nashrah Shareef

Kiran Devi comes from a remote tribal village in Gumla district in Jharkhand. Recently, her village hosted a community outreach camp to help residents access key government services, such as ration cards and Ayushman Bharat health cards, and open bank accounts. Kiran Devi needed these services, yet she could not participate in the camp due to apprehensions.  

Her hesitation stemmed from fears about several challenges, which include procedural uncertainties, documentation gaps, and prior difficulties with know-your-customer (KYC) processes. This was not a case of a lack of demand, but a delivery failure caused by fragmented processes and weak follow-up. 

Many households in India’s aspirational blocks and particularly vulnerable tribal group (PVTG) areas share Kiran Devi’s experience. They face barriers to prerequisite processes, such as Aadhaar updates or bank account requirements, which affect access to multiple welfare programs. Government departments and financial service providers have made significant efforts to promote the use of formal financial services through enrollment drives and financial literacy campaigns. However, these also leave a proportion of the population underserved.  

Lessons from the ground show that when we integrate the delivery of services with regular follow-up and provide consistent guidance, people participate easily, and inclusion is more effective.​ ​These insights often lead to a shift from isolated service delivery to coordinated, people-centric approaches. To operationalize this shift, the ALIGN framework provides a simple pathway for local governing bodies to design and deliver convergence-led financial inclusion efforts.  

 The following examples clearly demonstrate this shift. 

Expansion of financial services access through integrated camps: A case study from Gumla district, Jharkhand 

The district administration in Gumla, Jharkhand, redesigned its approach and built customer centricity into its service delivery model, particularly for financial and social inclusion. It recognized that lasting impact comes from convergence, where banks, government departments, self-help groups (SHGs), and frontline workers coordinate over time. With MSC’s support, the administration organized and integrated one-stop camps that combined awareness, enrollment, and troubleshooting (A-E-T).  

Unlike regular camps that focus on single services or one-time enrollment, these camps address multiple needs together. They resolved documentation issues on the spot, provided step-by-step guidance, and ensured follow-up after the camp. This approach reflects a structured model of awareness, enrollment, and troubleshooting (A-E-T), ensuring residents complete processes rather than return repeatedly without resolution.  

Figure 3 links:

Aadhaar
Ayushmaan
PMJDY
Direct benefit Transfer 

The District Program Manager of SRLM Gumla reflected on the issue of convergence and noted that “without coordinated, doorstep delivery of services, many would remain excluded or less engaged with financial services. This integrated approach has helped build community trust and ensured that no one is left behind due to procedural barriers.” 

Kiran Devi’s story proved that meaningful inclusion takes time, coordination, and commitment in making service delivery more customer centric. MSC has supported district administrations across aspirational blocks and districts in several states to apply similar convergence-led approaches to financial inclusion. 

Lessons from dedicated efforts in Kaushambi district, Uttar Pradesh 

In Uttar Pradesh’s Kaushambi district, a collaborative approach​​ ​to design and implement financial literacy camps helped drive greater financial awareness and access, with the involvement of the district leadership, financial institutions, and local governance. ​This inter-departmental collaboration brought together key stakeholders to align priorities and drive collective action for the effective delivery of outreach activities. Participants included representatives from the district administration, Bank of Baroda (the lead bank), the National Bank for Agriculture and Rural Development (NABARD), the State Rural Livelihoods Mission (SRLM), and local governance institutions. 

The collaborative initiative led to critical actions that strengthened the delivery of outreach camps. For instance, the sensitization and training of Gram Panchayat Pradhans, the elected heads of a village council, to strengthen community participation. This initiative shows how targeted financial literacy initiatives can effectively reach unserved or underserved regions when backed by institutional coordination and local leadership. As part of the initiative, a month-long financial literacy campaign was conducted to activate bank accounts, link beneficiaries to programs, and enroll them in insurance products. The campaign covered the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY). The campaign involves participation of more than 5,000 citizens and emphasized on ways to translate access into usage. It moves beyond mere awareness and ensure that beneficiaries opened accounts and services and used them actively. The campaign focused on specific goals, which includes account enrollment, KYC completion, insurance coverage, and promotion of digital transactions.  

The camps brought together all the key local stakeholders under a single platform through departmental convergence. The convergence addressed local needs, promoted trust-building, and supported practical usage of financial services through collaboration with banks, insurers, financial literacy counselors, and Gram Panchayat Pradhans. 

 It demonstrated how well-coordinated, goal-oriented efforts, supported by multi-stakeholder partnerships, can bridge gaps in access and usage and move the financial literacy drive into pathways for sustained financial empowerment.  

Addressing service gaps in remote areas: Convergent approach in Narayanpur district, Chhattisgarh 

The Orchha block in Narayanpur district of Chhattisgarh has long faced unique challenges in terms of access to formal financial services due to its location, security concerns, and limited infrastructure. These factors often mean that services take longer to reach communities and require additional effort from residents. 

The convergence approach has led to measurable results across India’s underserved areas. From March 2024 to March 2025, the effort led to the addition of more than  40,000 new banking touchpoints (bank branches/ Business Correspondents (BC)/India Post Payments Bank (IPPB) centres) in the aspirational blocks. Over the same period, Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts increased by 7%, while Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) enrollments expanded by 38% and Pradhan Mantri Suraksha Bima Yojana (PMSBY) enrollments grew by 22%. These changes reflect growth in access to and uptake of these schemes, with all values expressed per 100,000 population. across some of the country’s most underserved regions. This effort highlights how sustained collaboration can transform financial access into meaningful usage that ensures that women, low-income families, and remote communities are included and empowered through active participation in the financial ecosystem.  

Convergence as a strategy for inclusion 

Financial inclusion is not a one-time intervention but a continuous process of building access, usage, and trust. Experience from India shows that progress is most effective when local governments, financial institutions, and communities work in coordination, rather than in isolation. These efforts demonstrate that convergence across stakeholders is essential to make financial systems accessible, responsive, and sustainable, particularly for underserved populations. 

In each case, the fundamental enabler was not a single program, but multiple parts of the system. The availability of Aadhaar, ration card, and bank services at the same location meant that one missing document no longer halted progress. Additionally, the presence of SHG members, local leaders, and frontline workers bolstered confidence, provided guidance, and encouraged participation. 

Convergence remains a highly effective strategy to bridge financial inclusion gaps and create lasting change. It works best when a single coordinated approach integrates government initiatives, financial institutions, and community participation to improve access, promote active usage, and build trust in financial services. Convergence is most effective when it appears seamless to the person who receives the service. Joint planning and delivery across departments ensure that beneficiaries receive multiple services in one visit. Simple, technology-enabled tools streamline the process, while trusted local actors promote trust and engagement. 

As a result, sustained coordination and local follow-up are essential to transform initial access into long-term financial inclusion. This coordination enables millions of people, such as Kiran Devi, who live in India’s more remote corners, to participate in the economy and live a life of dignity. 

A district-led model for advancing financial inclusion from the ground up

Posted on by harshita

Shanti Devi had been waiting for her usual pension payout for the past three months. Yet, the 64-year-old widow from Kaushambi district, Uttar Pradesh, was left waiting. Her pension, however, had not stopped. Instead, the withdrawal services in her Jan Dhan account had been deactivated due to incomplete know your customer (KYC) data. No one had explained this to her. 

The issue surfaced only when she raised it during a self-help group (SHG) meeting, which revealed a wider pattern across villages. Shanti recalled, “I did not know something was wrong. I thought perhaps my pension had stopped, so I just gave up.” Shanti’s case was one among many that emerged across nearby villages. Community functionaries flagged this pattern during routine block-level reviews and escalated it to the district administration. 

The District Magistrate (DM) of Kaushambi, Madhusudan Hulgi, reviewed these cases and found that the incomplete KYC had led to frozen bank accounts across multiple villages. He positioned financial inclusion as a district governance priority and the foundation for access to welfare, education, and livelihoods to fix this problem. 

The Viksit Kaushambi Abhiyan marked a shift from fragmented efforts to a unified, district-led approach. The DM appointed a nodal officer to drive cross-departmental action. The district received technical support from MSC (MicroSave Consulting) under the NITI Aayog’s Aspirational Blocks Programme. The nodal officer embedded FI across planning and delivery systems active in the region through this support.  

Based on this mandate, the district launched coordinated actions to strengthen local capacity and reach communities at the last mile. The district also drove coordinated action from the district to the village level and improved access to quality digital financial services to underserved households. 

Enabling frontline workers to strengthen last-mile financial service delivery 

Kaushambi district bridged the last-mile gap by placing its trust in resource persons already embedded in community life. The district administration used existing frontline workers under the Viksit Kaushambi Abhiyaan, rather than create new structures. Rehana, an anganwadi worker who supports maternal and child development services, was one such example. 

Rehana’s efforts show how frontline workers can strengthen service delivery when supported through capacity building and sensitization. The district administration could reach households that had quietly fallen out of the system through existing frontline networks. This included building their understanding of schemes and guiding people on using digital payments. 

Design and execute a structured village-level financial inclusion campaign 

The district administration launched a structured financial literacy and enrolment campaign across Manjhanpur and Kaushambi aspirational blocks in coordination with local banks and the Lead District Manager (LDM). At the core of the campaign was a dedicated camp planner to ensure complete gram panchayat coverage rather than sporadic outreach. The planner mapped villages, sequencing door-to-door mobilization with village-level camps over a two-month period, and clearly assigned roles to banks, frontline workers, and district teams to avoid overlaps and gaps.  

SHG accredited social health activists (ASHAs) and local champions, such as Rehana, who conducted outreach in familiar settings and supported beneficiaries through enrolment and follow-up. This structured approach ensured that awareness and enrolment were delivered systematically at the gram panchayat level, rather than as stand-alone activities. The LDM played a catalytic role by aligning banks to the camp calendar, which ensured staff availability and prioritized key products, such as savings, insurance, and digital transactions. This alignment transformed isolated banking efforts into a coordinated, district-wide campaign anchored in the district’s broader financial inclusion vision. 

As a result, the campaign directly engaged more than 15,000 residents through village camps, group meetings, and household visits, while district-wide Information, Education and Communication (IEC) efforts extended awareness to an estimated 400,000 people. Beyond awareness, the gram panchayat-saturated approach translated into measurable uptake.  

During the campaign period, the district recorded 44,000 new Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) enrolments, 129,000 Pradhan Mantri Suraksha Bima Yojana (PMSBY) enrolments, and 35,000 Atal Pension Yojana (APY) enrolments, largely driven through village-level camps and SHG-led facilitation. In addition, 856,762 bank accounts were Aadhaar-seeded, which strengthened beneficiaries’ ability to receive Direct Benefit Transfer (DBT) and access services seamlessly. Banks also reported higher first-time transaction activity during this period, indicating increased engagement with formal financial services. 

Increase village-level banking access through targeted touchpoint expansion 

The district administration shifted its focus to improve last-mile access as awareness and demand for financial services increased. In coordination with banks, business correspondent (BC) agents, and postal banking services, the district administration expanded and revitalized inactive outlets. Priority went to underserved gram panchayats with limited or non-functional banking touchpoints, where residents had to travel long distances for basic transactions. These efforts strengthened local access to essential banking services and made routine transactions more convenient and affordable.

As a result, the number of banking touchpoints increased by 62%, from 415 to 674, between March 2024 and September 2025. This substantially expanded access to nearby banking services for residents in remote and underserved areas. The DM’s office regularly monitored and reviewed progress through direct leadership oversight, enabling timely course correction while ensuring steady implementation within routine administrative processes. 

Frontline workers as a channel for gender-sensitive service delivery 

A key element of Kaushambi district’s financial inclusion strategy was to strengthen the communication and engagement skills of frontline workers who interact most closely with women and vulnerable households. The district administration trained more than 84 frontline workers and officials across rural development, health, women and child development, education, and Panchayati Raj departments, focusing on gender-sensitive communication, trust-building, and practical facilitation skills needed to support access to financial and welfare services. 

In parallel, the LDM sensitized and oriented more than 100 Gram Pradhans, or the elected heads of a village council, on the importance of financial inclusion. These village heads were encouraged to discuss banking and savings at village-level meetings to help resolve local banking issues and include financial inclusion targets in their village development plans. This buy-in from the local leadership ensured that the push for financial literacy and access was not seen as a standalone campaign from “outside,” but rather as an integrated part of each village’s own development journey.

Way forward  

Kaushambi’s experience suggests that financial inclusion outcomes improve when managed through routine district processes rather than driven by one-time, short-term campaigns. Accountable delivery systems with clear task allocation, regular reviews, and follow-up at block and gram panchayat levels helped address access gaps more consistently. Sustaining gains will also require continued focus on how people use services, especially women and households in remote areas. Assisted support through frontline workers and familiar community platforms can help ensure that expanded access gradually translates into regular and confident use of financial services. 

For other districts, the priority is to institutionalize regular tracking within existing systems. Existing block and district review forums can be used to regularly review banking access, basic usage indicators, such as active accounts or transaction activity, and recurring service gaps. Simple dashboards can use block- and gram panchayat -level data to help officials identify where access has expanded, but usage remains low, and prioritize follow-up with banks and frontline staff.

Through such measures, financial inclusion can reach the doorsteps of people like Shanti Devi, who need it most to build a better life for themselves across India’s far corners.